April 14, 2003

Meeting Summary/Action Register

Presentations:
Review of Minutes
The facilitator asked the panel to review the minutes of the March 17, 2003 meeting. There being no changes, the minutes were approved as written. It was mentioned that the Dow CAP is the second oldest CAP in the country, third oldest CAP is the East Iberville CAP.

Vision 2020 Update
Mr. Don Hutchinson, Secretary, Louisiana Dept. of Economic Development, gave an overview of the Vision 2020 program. Mr. Hutchinson stated that the members of the CAP are Ambassadors for the state of Louisiana. Louisiana economic development is not about the Department of Economic Development but is about everyone in the state. The people in the state need to promote the good and positive things in the state. There are various world-class companies located in the Louisiana. Vision 2020 is the master plan for economic development recommending cluster-based economic development model. The goals are for Louisiana to become a 1) learning enterprise; 2) a culture of innovation; and 3) a top 10 state.

Prior to the reorganization of the Louisiana Dept. of Economic Development, business service representatives within the department were responsible for a certain geographic region of the state and country and handled all prospects. Currently, the Office of Business Development has been revamped specializing in nine cluster areas supported by seven service offices with directors and staff. The nine industry clusters identified for the state are 1) Advanced Materials; 2) Agriculture, Forestry, Food Technology; 3) Durable Goods / Manufacturing; 4) Entertainment; 5) Information Technology; 6) Life Sciences / Biotechnology; 7) Logistics / Transportation; 8) Energy, Oil & Gas; and 9) Petrochemical, Environmental Technology.

A cluster is a network of compatible or competitive companies working together to strengthen their industry – industry driven partnership. The nine cluster directors will work with and recruit companies in their area of expertise. Areas of focus of economic development are human resources (workforce training), technology, access to capital, business climate and physical infrastructure.

Over the past 12 months, several economic development successes have occurred. General Motors did an expansion and located their facility in Shreveport, Louisiana. Due to their expansion, several other automotive downstream suppliers have located within the state forming an automotive cluster. Each spin off creates a regional impact for economic development. Procter & Gamble decided to retain and expand their location in Pineville which resulted in saving 260 jobs. Another success was with Libbey Glass that located in Shreveport creating 160 jobs. The Film and Video industry is projected to spend approximately $200 million in the state after the legislature passed incentives for that industry. Chef John Folse expanded in Donaldsonville Industrial Park and created 40 new jobs and expected to add 75 employees in three years. EADS Aeroframe, partnered with Northrop Grumman, creating 360 new jobs. Randa Corporation located in St. Charles Parish is creating 133 new jobs.

Some of Louisiana’s positives are: ranked 4th most productive in the United States in value added per production worker; ranked number 3 in the nation in percentage of income growth; climbed to 2nd in the nation in percentage increase in funding for post secondary education; ranked 19th in the country in terms of high-tech job growth; ranked number 5 in the nation for accountability and standards efforts in our schools; New Orleans named one of the best Biotech location in the south; ranked 10th in the country for lowest total tax burden; named one of the nation’s top 10 states for its tax friendliness; Plaquemine named “Hottest Small Market” of the year; seven metro areas made it to Forbes’ list of best places for businesses and careers; Baton Rouge ranked 3rd by Inc. Magazine for best cities for small business.

A panel member asked for an update on the company that had received $500,000 funding from the state and is now planning to move out of the state. Mr. Hutchinson stated that $500,000 funding was a venture capital investment and the state could still make money from this company due to return on this investment.

Mr. Hutchinson reviewed the “Choose Louisiana” campaign to the CAP. “Choose Louisiana” campaign will promote Louisiana’s positives, Vision 2020, industry partnerships, economic development entities, allies and media partnerships. This campaign will be promoted via radio, newspapers and the Internet. Some critical success factors that the state has are an aggressive targeted marketing campaign, workforce centers of excellence, competitive business climate, and an increased investment in education. Choose Louisiana – a great place to live, work, visit and do business.

After thorough discussion, the CAP recommended that “Choose Louisiana” be promoted in the schools throughout the state. Mr. Hutchinson also mentioned that the Louisiana Dept. of Economic Development is building a relationship with higher education, community colleges and the technical colleges. Businesses need to work with our education system and vice versa. The state needs to work on incentive packages and resources to offer to prospective companies and stay competitive. The Louisiana Dept. of Economic Development’s marketing budget is currently at $1 million per year but could be approved this legislative session for $3 million per year compared with the Louisiana Dept. of Tourism’s marketing budget which is $16.5 million per year.
A panel member asked Mr. Hutchinson what is being done on the infrastructure in the area and state. Mr. Hutchinson stated that the State of Florida has less state highways than Louisiana and they spend $6 for every $1 we spend on our roads. Their revenue comes from toll roads and taxes.

Environmental, Health and Safety Update
Mr. David Graham gave an update on the recent enforcement in EPA Region 6. Mr. Graham presented to the CAP a list of petrochemical companies and their fines and penalties filed by DEQ. Companies, if approved by DEQ, can donate a portion of their fines and penalties as a beneficial environmental project Monies collected from fines and penalties by DEQ go to the state general fund account. (Editorial Note: Research after the meeting found that the fines collected go into the state’s hazardous waste cleanup fund.) Dow recently entered into a settlement agreement with DEQ for $2.4 million for alleged violations. One part of the fine was associated with an annual DEQ inspection where Dow was penalized for being out of compliance for 6 hours over a 3-year period. The proposed fine would be disbursed as follows:

• $1 million to Americas Wetlands Initiative
• $300,000 to the State Environmental Trust Fund
• $50,000 to the Plaquemine Waterfront Park
• $50,000 to the Ozone Educational Program
• $1 million as a civil penalty to LDEQ

The CAP was asked for their input / recommendations on how Dow should inform the community and general public on the penalty. Mr. Graham stated that information would be sent first to all Dow employees informing them of this issue and a press release would then be done to notify the community and general public. After thorough discussion, the CAP recommended that the press release should state that Dow was penalized but measures have been taken to correct the problem. The press release should be written in layman’s terms.

Mr. Earl Shipp mentioned that Dow would pay this fine and put in place an enhanced management system to make sure this incident does not occur again. A management team has been put in place and they will be meeting twice a month.

Global Public Affairs
Mr. Bob Charlton, Vice President of Global Public Affairs, expressed appreciation to the CAP for their dedication, time and comments. There are 22 Dow CAPs currently in place. Dow values CAPs and its process. Mr. Charlton stated that he appreciated the panel’s comments made at the meeting pertaining to the penalty and fines placed against Dow.

Mr. Charlton gave an overview of Dow’s Public Affairs Department – it’s a department designed to build relationships employing approximately 250 people globally.

A panel member suggested that Dow should consider a CAP exchange program. Invite CAP members from China to Baton Rouge and vice versa to give members different perspectives and ideas of how other CAPs operate, etc. Mr. Charlton mentioned that with video conferencing technology meetings could be coordinated globally and would be considered.

Responsible Care Performance Measurements
Mr. Graham reviewed Dow’s Responsible Care Performance Measurements from March 18, 2003 – April 14, 2003.

“Dow in the News” / Upcoming Events
Ms. Babs Babin reviewed the “Dow in the News” and Upcoming Events to the CAP.

The next meeting of the Dow CAP has been scheduled for Monday, May 12, 2003 at 6:00 p.m.