Dow’s Global Reorganization Reaches Texas Operations

Freeport, TX - June 24, 2004

Dow Texas Operations announced today that approximately 200-225 jobs would be eliminated at the site as part of Dow’s global reorganization efforts. The jobs represent about four percent of the site’s workforce.

“This has really been a difficult process,” said Bob Walker, vice president of Dow Texas Operations. “A major driving force behind these decisions was a consolidation of businesses and a reduction of duplicate or redundant roles, not individual job performance. There are a lot of talented and committed individuals who work at Texas Operations, and our objective was to make sure this process was conducted as fairly as possible.”

After poor financial performances in 2001 and 2002, primarily due to conditions outside of the company’s control like higher and volatile energy prices, Dow implemented an action plan to restore the company’s fiscal fitness. Among other things, the plan focused on discretionary spending and closure of non-competitive or under-utilized plants.

The focus continued in 2004 with Dow starting to address long-term issues by making significant structural changes to position the company for future success. This included a global reorganization – designed to create clearer accountability, streamline decision making and reduce structural costs.

Dow must also address the new business reality of globalization. Economies in the United States and Europe are growing at a much slower rate than those in China, which are currently booming. Dow has begun to implement strategies which will allow it to participate in those faster-growing economies.

“The company’s 2003 performance was good, but it only made up a small portion of the $9 billion in margins we lost between 1995 and 2002,” said Walker. “Dow is being faced with a new business reality where we have to be more efficient to compete on a global scale. Texas Operations was created in part because of the low-cost feedstocks like natural gas available on the Gulf Coast. Now, North America and the Gulf Coast do not have low-cost feedstocks, which hurts when you’re competing in an industry where the lowest price wins.”

Dow is a leader in science and technology, providing innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $33 billion, Dow serves customers in more than 180 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its approximately 46,000 employees seek to balance economic, environmental and social responsibilities. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

More information about Dow Texas Operations is available at www.dowtexasoperations.com.

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For Editorial Information:

David Winder
The Dow Chemical Company
979-238-3792