Dow outlines investment plans to deliver over $3 billion of additional underlying EBITDA growth

Growth projects further solidify leadership positions, designed to capture demand and value growth in key-end market verticals growing above GDP

Dow Chemical Co announced plans to deliver additional underlying EBITDA growth of more than $3 billion while keeping capital expenditures at or below depreciation and amortization (D&A) levels across the cycle. The investments will also advance Dow's circular and low-carbon offerings across its portfolio, driving the company toward zero-carbon emissions across its global asset base.

Near-term capital and operating growth investments are expected to generate approximately $2 billion of additional EBITDA, and a new net-zero carbon emissions ethylene and derivatives complex is expected to deliver approximately $1 billion of EBITDA per year by 2030.

In-flight actions will also contribute to Dow's earnings and cash flow growth potential, including Dow's previously committed advancements in digitalization capabilities across the enterprise, which are expected to deliver $300 million of EBITDA by year-end 2025, and the Company's stated restructuring target of $300 million of run-rate EBITDA, which it is on track to deliver by the end of 2021.

The projects will enable the company to meet continued demand growth for higher-margin, higher-growth products while leveraging Dow's global scale to penetrate deeper into attractive end-market verticals expected to continue to grow well above GDP, including packaging, infrastructure, consumer and mobility.

"Our near- and mid-term investments will deliver substantial additional earnings and cash flow upside, further enable us to grow with our customers in attractive end-markets, and set the stage for our transition to zero-carbon emissions across our global operations," said Jim Fitterling, Chairman and CEO. "Our global scale, differentiated product portfolio, low-cost position and advantaged feedstock flexibility collectively position us well to both decarbonize and grow, creating value for all our stakeholders."

Capital and operating growth investments include:

Packaging & Specialty Plastics: incremental capacity expansions in polyethylene and functional polymers; further enhancements of feedstock flexibility; and implementation of next-generation low-carbon, lower-cost technologies, while accelerating its shift to higher-margin products and unlocking additional value through productivity improvements.

Industrial Intermediates & Infrastructure: additional capacity for high-margin polyurethane systems, downstream alkoxylates, specialty amines and isocyanates to deliver solutions for next-generation infrastructure, capturing demand growth in pharmaceuticals, cleaning, sustainable textiles and applications requiring carbon reduction, while continuing to shift its product mix toward higher-margin applications.

Performance Materials & Coatings: capacity expansions in silicone polymers, adhesives and sealants as well as coatings binders and acrylates to accelerate growth of downstream business, leveraging global scale and broad innovation portfolio to deliver differentiated solutions and sustainable materials in key end-markets including infrastructure, electronics, mobility, home and personal care and coatings.

These projects advance Dow's leadership positions across packaging, infrastructure, consumer and mobility end-markets – all growing above GDP and supported by emerging global needs for more sustainable materials. These investments will utilize best-in-class operations to lower carbon emissions through enhanced conversion processes, waste reduction and renewable energy, among others.

Dow also announced plans to construct the world's first net-zero carbon emissions ethylene facility and convert the assets at its Fort Saskatchewan site in Alberta, Canada, to create the first net-zero carbon emissions complex with respect to scope 1 and 2 carbon dioxide emissions. These investments will decarbonize approximately 20 percent of Dow's global ethylene capacity while growing its polyethylene supply by about 15 percent.

These investments support Dow's commitment to reduce its net annual carbon emissions by an additional 15 percent, reducing net annual carbon emissions by approximately 30 percent by 2030 (since 2005). On its path to zero-carbon emissions, the Company is ready today to scale near-term technology related investments including circular hydrogen and carbon capture and storage and is also exploring investment in modular nuclear. Longer-term investments include electric cracking, ethane dehydrogenation and advanced batteries.

Dow also announced broader carbon reduction actions, including additional renewable energy agreements in the Americas and Europe. Earlier this year the Company announced a multi-generational plan at its site in Terneuzen, the Netherlands, to invest in clean hydrogen, carbon capture, and e-cracking capabilities.

The company expects to allocate approximately $1 billion of capex annually – or approximately 1/3 of its D&A levels – to decarbonize its global asset base in a phased, site-by-site approach.

The timing of Dow's investments aligned to its 2050 carbon neutrality commitment will be driven by affordability, macroeconomic and regulatory drivers. Public policy will also be a key consideration in investment decisions and has the ability to help accelerate Dow's and the industry's transition to zero-carbon emissions.