Surging Energy Costs Driving Increased Prices and Operational Assesments in Dow Emulsion Polymers Business

Horgen, Switzerland - May 30, 2008

Consistent with a May 28 corporate announcement, Dow Emulsion Polymers, a business unit of The Dow Chemical Company and its affiliates (“DEP”), is raising prices and also accelerating reviews of all global operating efficiencies and economics due primarily to the extraordinary rise in energy and related raw material costs, but also worldwide supply/demand dynamics.

Effective June 1, 2008, DEP will increase prices by up to 20 percent globally for all latex emulsion products sold into the paper, flooring and performance latex market/application segments.  This increase is in addition to previously announced price actions and will be implemented immediately or as contracts allow.

“We are conscious of the challenges our customers also face with current industry dynamics, as every link of the value chain is affected to some degree in the pinch between ‘big oil’ [companies] and consumers,” said Philippe Raynaud de Fitte, general manager, DEP.  “The reality is that the current environment is untenable and requires DEP to pass on the surging costs immediately.”

The increases will help accelerate the recovery of continued rising costs of freight, hydrocarbons and raw materials such as benzene, styrene and butadiene used to manufacture DEP products.

In addition to these price increases DEP is continuing an aggressive cost-control plan and is accelerating existing reviews for all of its manufacturing facilities in light of geographic variances in supply/demand and overall current feedstock and energy prices.  Phase one of this review resulted in the previously announced closure of Dow’s latex plant at Freeport, Texas scheduled in June.

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Jennifer Holzinger
The Dow Chemical Company
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