Industrial Use of Canola Oil Opportunities and Challenges

®

Industrial Use of Canola OilOpportunities and Challenges

Bill McNeillThe Dow Chemical CompanyMarch, 2007

®

Slide 2WCM/March 22, 2007

About Dow …

A science and technology leader with annual sales of $49 billion

Founded in 1897 by Herbert H. Dow in Midland, Michigan

Supplies more than 3,300 products to customers in 175 countries

From 156 manufacturing sites in 37 countries

Employs 43,000 people globally

®

Slide 3WCM/March 22, 2007

The Dow Chemical Company

®

Slide 4WCM/March 22, 2007

Serving Many Markets with Essential Solutions

Food/FoodPackaging

22%

Personal/Household Care

16%

Building Maint/Construction

11%

Automotive/Transportation

9%

Home Care/Improvement

10%

Paper/Publishing

7%Furniture/

Furnishings4%

Electronics/Entertainment

3%

Health3%

Water Purification

2%

Hydrocarbons & Energy

12%

Miscellaneous1%

®

Slide 5WCM/March 22, 2007

Strategic Themes

Set the Standard for Sustainability

Drive Financial Discipline and Low Cost to Serve

Invest for Strategic Growth

Build a People Centric Performance Culture

®

Slide 6WCM/March 22, 2007

Trends Driving Renewable Feedstocks

High Cost and Volatile Hydrocarbon Feedstocks

Changing The Game

Energy and Raw Material Security

Climate Change – Increasing Cost of Carbon Emissions

Sustainability – LOHAS Consumer Segment

®

Slide 7WCM/March 22, 2007

®

Slide 8WCM/March 22, 2007

Soy Polyols

Soy Oil FAME + Glycerine (by product)

Dow Technology

Polyol+ Isocyanate

Polyurethanes

®

Slide 9WCM/March 22, 2007

Control Foam Soy Foam

Enhanced Whiteness

Exposed ExposedCovered Covered

Better Performance

Better Moisture Resistance

Alternate PolyolSoy Polyol

®

Slide 10WCM/March 22, 2007

Glycerine to Epichlorohydrin

Seed Oil FAME + Glycerine (by product)

Epichlorohydrin + BPA Epoxy Products

®

Slide 11WCM/March 22, 2007

Renewable Project Risks to Manage

Raw Material SupplyConversion Technology Market Acceptance

®

Slide 12WCM/March 22, 2007

Renewable Feedstock Options

Sugar & Starch Fats & Oils Biomass

• Refined global commodity• 150 MMT• 12-25 ¢/lb

• Refined global commodity• 150 MMT• 15-40 ¢/lb

• Crude Product• Developing supply chain• 100 Giga T

®

Slide 13WCM/March 22, 2007

Conversion Technologies

GasificationFermentation

Chemical Processes

Syngas

Alcohols Ethylene

Ethanol Chemicals PolyolsEpichlorohydrinPropylene GlycolSurfactantsLubricantsPolymers

Renewable Feedstocks

®

Slide 14WCM/March 22, 2007

Market Acceptance

New Products

• Significant Improvement in cost/performance required

• Customer Driven

Increasing Risk and DifficultyIncreasing Risk and Difficulty

Equivalent in Application

• Expanded Offering• Customer Validation

Now with Renewable Plastic

Exact Replacements

• Cost saving is driver• Defend against new

competitors

®

Slide 15WCM/March 22, 2007

Critical Issues

Business Strategy Feedstock Availability/Cost Various Feedstock Cost Scenarios Drop in Replacement vs. New Product Process Development Required Platform vs. Single Molecule Freedom to Practice Technology Sustainable Differentiation

®

Slide 16WCM/March 22, 2007

Chemicals from Renewable Feedstocks Advantages

Potential Low Cost Feedstock Diversification Potential for Better Performance Reduced Environmental Impact Expanded Business Models Growing Consumer Demand

Challenges Complex Supply Chain Distributed Business Model Established Petrochemical Products New Conversion Technologies Coal Cost, Cost, Cost

®

Slide 17WCM/March 22, 2007

150 MM Lbs PLA expansion vs. 19 Billion Lbs PE new capacity 20 MM Lbs Soy Polyols vs. 12 Billion lbs of PO produced per year 150,000 MT Glycerin-Based EPI Vs. 1,400,000 MT capacity

8th annual Bioplastics Conference, 6-7 Dec 2006, Frankfurt

by 2010 --- 0.9-1.6% of petroleum based plastics will be replaced with bioplastics,

by 2020 --- the percentage could be 1.25-2.5%.

2005 – 2008 --- global capacity for bioplastic increases from 360,000 to 600,000 t/yr

It Will Take Time -

Changing the Game …

®

Slide 18WCM/March 22, 2007

Changing the Game …

Now First generation biofuels PDO PLA polymers

1 – 5 years By-product glycerin to chemicals Seed oil-based Polyols Ethanol to olefins

PHA, PHB polymers Butanol, Succinic Acid from sugar

5 -10+ Years Second Generation Biofuels Bio-refineries, industrial chemicals Bio Engineered crops for chemicals

WCM/March 22, 2007WCM/March 22, 2007

Page 19

®

Thank you!

Questions.