Dow Chemical Company

• Date Founded: 1897
• Industry: Chemicals
• Corporate Headquarters: Midland, Michigan
• Type: Public

The Dow Chemical Company, a diversified multinational company, is headquartered in Midland, Michigan. Dow manufactures a wide range of chemicals, plastics, performance chemicals (that, for example, improve the manufacturing process), and crop protection chemicals. It also has interests in oil and natural gas exploration and production. In 2017, it merged with DuPont to create DowDuPont, which separated from Dupont in 2019, becoming an independently traded company under the name Dow Chemical Company. The company’s operations are organized around six business segments, including Electronic and Functional Materials, Coatings and Infrastructure Solutions, Agricultural Sciences, Performance Materials, Performance Plastics, and Feedstocks and Energy. Dow Chemical operates around one hundred manufacturing plants with nearly 36,000 employees globally.

Prior to its 2017 merger, Dow was the second largest chemical manufacturer in the world, with annual revenues of $48 billion. After the merger with DuPont (the eighth largest at the time), it became the largest. In the 2020s, it remained one of the world's largest chemical producers. Its major rivals in the twenty-first century include BASF, Monsanto, PPG Industries, LyondellBassel, and Eastman Chemical.

History

Dow Chemical was founded in 1897 by a Canadian-born chemist, Herbert Henry Dow, who invented a new method for extracting bromine from brine, a form of saltwater. Dow, who graduated from the Case School of Applied Science (now Case Western Reserve University) in 1888, majored in chemistry. In 1889, Dow patented an electrolytic method that extracted bromine from brine. Between 1890 and 1897, Dow struggled with a number of business ventures that used his patented process for extracting bromine and other chemicals from brine. However, undeterred by the failure of his earlier companies—Canton Chemical, Ohio; Midland Chemical Company, Michigan; and Dow Process Company—Dow in 1897 formed the Dow Chemical Company in Midland, Michigan. Dow went on to develop methods for producing chlorine, magnesium, and other chemicals from brine, and within twenty years, Dow Chemical had become a leading manufacturer of agricultural chemicals, chlorine, and magnesium metal.

In 1941, in Freeport, Texas, Dow’s company set up its first plant designed to produce magnesium from seawater rather than from underground brine. The plant expanded rapidly to produce power, chlorine, caustic soda, and ethylene, in addition to magnesium. During World War II, the United States turned to Dow because of the company’s work with magnesium, which was used in the fabrication of lightweight parts for aircraft. Plastics likewise helped the war effort because of their many applications—from combs issued to service members to mortar fuses, parachutes, helmet liners, and even in the Manhattan Project, the US effort to produce an atomic bomb. Production of plastics vaulted from 213 million pounds in 1939 to 818 million pounds in 1945. With the end of the war, plastics went from the battlefield into homes and offices—and just about everywhere else.

Dow launched its first consumer product, Saran Wrap, in 1953. Saran Wrap, a thin plastic film, was sold in rolls and used primarily for wrapping food. This product binds tightly to the wrapped food and keeps water and gas from getting through the thin plastic, thus keeping the material that is inside fresh over a longer period of time. Driven by the growing demand for plastics in the emerging consumer market, Dow reported increasing sales throughout the 1960s. In 1964, it reached sales of $1 billion, but its sales had doubled to $2 billion by 1971. It subsequently hit $10 billion in sales in 1980.

The postwar era also saw Dow expand outside of North America. The company established its first overseas subsidiary in Japan in 1952, and it subsequently opened businesses in several countries globally.

In August 1999, Dow agreed to acquire Union Carbide Corporation (UCC) for $9.3 billion in stock. In February 2001, Dow acquired all shares of the UCC stock, and UCC became a wholly owned subsidiary of Dow Chemical.

On July 10, 2008, Dow Chemical agreed to acquire specialty materials firm Rohm and Haas for $15.3 billion. This acquisition created the world’s largest advanced materials and specialty chemicals business. The deal aimed to enhance Dow’s role in specialty chemicals, a part of the business that offers both higher profit margins than the commodities market and also more security against competition. The Rohm and Haas deal closed on April 1, 2009.

In 2015, Dow entered into an agreement with the Olin Corporation whereby Dow would transfer much of the chlorine production side of its business to Olin. When Dow reorganized with DuPont in 2017, the company's materials science division became Dow Chemical Company. The company continued experiencing success in the early and mid-2020s, expanding its production of silicone-based products for photovoltaic assembly, winning an artificial intelligence award, and receiving recognition for its sustainability business practices from the Dow Jones Sustainability World Index. During the COVID-19 pandemic, the company increased its production of hand sanitizer products and offered some healthcare facilities these products free of cost. The company partnered with Macquarie Asset Management in 2024 to launch Diamond Infrastructure Solutions.

Impact

The US military made extensive use of napalm bombs in North Vietnam during the Vietnam War. Dow was one of the manufacturers that had entered into contracts with the government for producing the napalm B compound that was used in the bombs. Dow started making the product at its Torrance, California, plant in 1965. Although the other manufacturers eventually stopped producing the compound in response to protests and negative publicity, Dow continued to produce napalm B at the plant until 1969. Dow also supplied Agent Orange to the US military during the Vietnam War. This herbicide is a chemical defoliant containing dioxin that has harmful health effects on humans. In 2004, Vietnamese victims of Agent Orange filed a lawsuit against Dow, Monsanto, and other companies for their involvement in the manufacture of this herbicide. The lawsuit was dismissed in March 2005 by a federal judge in Brooklyn, New York.

In the 1990s, Dow Corning, a joint venture of the Dow Chemical Company and Corning Incorporated, found itself at the center of a controversy due to its silicone breast implants. Silicone was first used for breast implants in 1964, and by the mid-1990s, two million women in the United States had had implants, mostly for cosmetic reasons.

Hundreds of lawsuits were brought against Dow Corning in the 1980s and 1990s; these lawsuits claimed that the company’s breast implants caused a host of health problems—everything from breast cancer, to a range of autoimmune diseases, including lupus and rheumatoid arthritis, to neurological problems. In 1998, a $3.2 billion settlement was worked out, but the company ended up under bankruptcy protection for nine years—until June 2004. On June 1, 2004, Dow Corning officially emerged from bankruptcy, and it said it would begin paying the silicone breast implant recipients under the settlement. However, several studies, including those conducted by the Mayo Clinic and the University of Southern California, failed to show the existence of any link between the implants and a higher risk of the alleged health conditions.

In 2012, a subsidiary of Dow was contracted by the government of South Carolina to apply a skid-resistant coating to several highways in the state. The company was required to provide third-party certifications of the efficacy of this coating to the state's Department of Transportation. Dow did so, but allegations arose that the company had falsified the certifications. The US Department of Transportation and Department of Justice sued Dow over these claims; Dow settled with the government in 2018, paying $479,000.

In 2013, a federal court rejected two tax shelter transactions Dow had entered into under the guidance of Goldman Sachs and the law firm King & Spalding that had created about $1 billion in tax deductions, finding that the transactions had been an attempt to exploit loopholes in the tax code rather than being legitimate business decisions. Dow appealed the decision to the Fifth Circuit Court but was once again rejected.

Dow manufactures a pesticide called chlorpyrifos, which has been found by some studies to cause neurological damage in infants and young children. The Environmental Protection Agency (EPA) under President Barack Obama had started the process of banning this pesticide, but under President Donald Trump, it rejected the ban. This led to some controversy, as Dow had contributed $1 million to Trump's campaign. Corteva, the portion of Dow that produced these pesticides, announced in the early 2020s that this production would cease.

In 2021, Dow Chemical Company settled a lawsuit with the US EPA and several other governmental agencies regarding the air pollution produced by four of its petrochemical facilities in Texas and Louisiana. The lawsuit alleged that the company violated Clean Air Act requirements by polluting the air and soil with volatile organic compounds and hazardous chemicals like benzene. Dow Chemical Company agreed to pay $3 million in civil penalty damages.

Bibliography

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"The Dow Chemical Company, Performance Materials NA, Inc, and Union Carbide Corporation Clean Air Act Settlement." US Environmental Protection Agency, www.epa.gov/enforcement/dow-chemical-company-performance-materials-na-inc-and-union-carbide-corporation-clean. Accessed 20 Jan. 2025.

Freinkel, Susan. Plastic: A Toxic Love Story. Houghton Mifflin Harcourt, 2011.

Gupta, Raj. "How I Did It: Rohm and Haas’s Former CEO on Pulling Off a Sweet Deal in a Down Market." Harvard Business Review, Nov. 2010, hbr.org/2010/11/how-i-did-it-rohm-and-haass-former-ceo-on-pulling-off-a-sweet-deal-in-a-down-market. Accessed 20 Jan. 2025.

"Herbert Henry Dow." Science History Institute, www.sciencehistory.org/education/scientific-biographies/herbert-henry-dow. Accessed 20 Jan. 2025.

"Investors." DOW, investors.dow.com/en/investors/default.aspx. Accessed 20 Jan. 2025.

Kaskey, Jack. "Dow, DuPont Set Aug. 31 for Closing of Historic Chemical Merger." Bloomberg, 4 Aug. 2017, www.bloomberg.com/news/articles/2017-08-04/dow-dupont-set-aug-31-for-closing-of-historic-chemical-merger. Accessed 20 Jan. 2025.

Rabin, Roni Caryn. "A Strong Case against a Pesticide Does Not Faze E.P.A. under Trump." The New York Times, 15 May 2017, www.nytimes.com/2017/05/15/health/pesticides-epa-chlorpyrifos-scott-pruitt.html. Accessed 20 Jan. 2025.