The Dow Chemical Company - ValuePlays

July 25, 2011

The Dow Chemical Company

Dow & Saudi Aramco Embark on World’s Largest Chemicals Project

to Drive Downstream Growth

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SEC Disclosure Rules

Some of our comments today may include statements about our

expectations for the future. Those expectations involve risks and

uncertainties. Dow cannot guarantee the accuracy of any forecasts

or estimates, and we do not plan to update any forward-looking

statements if our expectations change. If you would like more

information on the risks involved in forward-looking statements,

please see our annual report and our SEC filings.

In addition, some of our comments reference non-GAAP financial

measures. Where available, a reconciliation to the most directly

comparable GAAP financial measures and other associated

disclosures are provided on the internet at www.dow.com/financial.

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Agenda

Forging a Premier Partnership for Growth

Strategic Intent & Project Overview

Project Economics & Milestones

Driving Growth on Multiple Fronts

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Premier partnership focused on long-term growth

World-scale operations supported by strong back-integration to advantaged feedstocks

Tailored product mix designed to target high-growth, high-margin end-markets

Uniquely located in the middle of the fastest growing regions

Strong economics and financingmodel

Historic Partnership Drives Next Generation of Growth

Commencing a New Era of Growth

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Introducing Sadara

Progressive leadership, enhanced performance, and a

status derived from quantifiable talent and proven mastery.

Sadara

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Sadara Delivers Value on Every Front

State-of-the-art, world-scale chemicals complex and value park– Construction to begin immediately; production to ramp up beginning in 2015– Reaching $10 B in annual revenue– More than 3 MM metric tons of capacity

Positioned to capture growth opportunities aligned with Dow’s strategy– Performance product slate designed to serve fast-growing regions and value chains– Drives higher, more sustainable margins– Dow to market product on behalf of JV outside of Middle East

Sadara will be highly competitive and profitable– Average EBITDA margins of ~40 percent– Average equity earnings of ~$500 MM/yr to each partner over first 10 years after start-up

Well-conceived financing plan de-risks project– Strong project economics, utilizing equity-light model– Limited future cash contributions from Dow going forward

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Sadara Creates Value on Every Front

Builds new industries and creates jobs for Saudi Arabia

Adds capacity needed to supply emerging regions, particularly in Asia Pacific

Delivers value-add tofast-growing value chains that hold tremendous market opportunities

Brings state-of-the-art technology and competitive cost position to bear in operations and products

JV

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Uniquely Positioned to Capture Emerging Region Growth

Advantaged feedstocks enable growth capture in attractive value chains

Expected RegionalVolume Split

Asia Pacific: ~45%

Middle East: ~25%

Europe: ~20%

Other: ~10%

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Positioned to Address High-Growth Sectors in Asia Pacific

Sadara uniquely positioned to capture significant growth in Asia Pacific

Asia Pacific’s global demand share in key end-markets has grown from <30% to ~40% since 2005

Automotive Home &Personal Care Electronics Water Packaging

12-15% 7-9% 12-15% 12-15% 10-15%

Source: Dow

Ch

ina’

s 2

00

5-2

02

0

CA

GR

%

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Target End-Markets Drive Performance-Focused Design

High-GrowthEnd-Markets

& Value Chains

Hygiene and Medical

Food Packaging

Specialty Packaging

Adhesives

Electronics

Coatings

Automotive

Oil & Gas

Consumer Durables

Construction

Infrastructure

Water

Feedstocks

Ethane

Liquid Feeds

Refinery

Integration

Sadara

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Packaging Growth Centered on Emerging Regions

LLPDE Growth Rates 2011-2015 2016-2025

U.S. & Canada 4% 3%

China 12% 8%

Western Europe 4% 2%

Asia Pacific ex-China 10% 7%

Middle East & Africa 8% 6%

Latin America 8% 6%

Eastern Europe 8% 8%

Global 8% 6%

40

30

20

10

0

0 1 2 3 4 5 6 7

Population (billions)

Po

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em

an

d p

er

Cap

ita (

kg

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ers

on

)

Africa

Rest of Asia Pacific

La

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Am

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China

Easte

rn E

uro

pe

Mid

dle

East

Jap

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Weste

rn E

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pe

No

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Global average: ~10 kg per person

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Polyurethanes Share Growth Enabled By Investments

Dow participates in key fast-growing applications

– Automotive– Appliances – Construction– Furniture and bedding– Wind energy

JV investment enables share growth, supported by competitive supply position

Investment fortifies Dow’s commitment to key global customers

Maintains flexibility to add differentiation via further downstream investments

(1) Source: Dow

42%

28%

15%

8%

7%

Estimated % of Polyurethanes

Industry 2010 Sales(1)

Middle East & Africa Asia Pacific

Middle East, Africa Asia Pacific North America

Latin America Europe

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Agenda

Forging a Premier Partnership for Growth

Strategic Intent & Project Overview

Project Economics & Milestones

Driving Growth on Multiple Fronts

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Performance-Focused Product Slate

Solution PE

LDPE

Amines

Glycol Ethers

Propylene Glycol

Polyether Polyols

Isocyanates

Elastomers

Water

Others…

Feedstocks

Ethane

Liquid Feeds

Refinery

Integration

Sadara

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Highly Competitive and Profitable Investment

Dow expects to reach cash flow break-even within 5 years of start-up

Sadara revenues projected to reach ~$10 B annually within 10 years of full operations, with top

quartile EBITDA margins

Average equity earnings of ~$500 MM/yr to each partner over first 10 years of full operations

– Additional value to Dow from marketing fees, royalties, and licensing fees

~40% margin

on average

30%

40%

50%

$0

$2

$4

$6

$8

$10

2015 2020 2025

Pro

jecte

d J

V E

BIT

DA

Ma

rgin

An

nu

al JV

Re

ve

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e (

$ B

)

Revenue

EBITDA Margin Range

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Equity-Light Financing Plan Reduces Project Risk

Target Equity Funding: 35% Target Debt Funding: 65%

Sadara

Total Project

Investment~$20 B

DebtAramco

IPO

Dow

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Key Milestones Going Forward

2H 2011 2012 2013 2014 2015 2016 2017

Financial close

Remaining plants ramp to full production

Final investment decision

Sadara formation & construction begins

IPOFirst plants come online (cracker and PE)

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Agenda

Forging A Premier Partnership for Growth

Strategic Intent & Project Overview

Project Economics & Milestones

Driving Growth on Multiple Fronts

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Water

Thermoplastic Polyolefins (TPE) Compounding

Wire & Cable Compounding

Specialty Packaging

Photovoltaic Encapsulant Films

Gas Treatment Formulations

Composite Carbon Fiber

Thermosets Systems House

Automotive Parts

Household Products

Future Value Park Accelerates Growth in Key Value Chains

An

no

un

ce

dTo

day

Un

de

r C

on

sid

era

tio

n

SadaraValuePark

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Advancing Our Strategy On All Fronts

Integrated Portfolio

Geographic Position

70% of Dow’s ethylene production located in cost-advantaged regions

Announced USGC investments to deliver profitable growth in Americas- $750MM to $1B of annual

EBITDA by 2016

Formed JV with Mitsui, delivering back-integration into renewable sugar cane

R&D playbook contains >500 projects, with risk adjusted NPV of $12B

Monetizing pipeline today and in near-term

- SmartStax®

- POWERHOUSE™

- EVOQUE™

Continuing to capture growth synergies; run-rate now at $1.2B

Innovation Pipeline

By 2012, 35% of revenue to come from emerging geographies

Record sales in emerging geographies ($16B) in 2010

Expanding footprint in Asia Pacific with significant investments

Proposed Saudi JV: final investment decision

® SmartStax multi-event technology developed by Dow AgroSciences and Monsanto.

SmartStax is a trademark of Monsanto Technology, LLC.

™Trademark of The Dow Chemical Company or an affiliated company of Dow.

Delivers Diversification While

Driving Shareholder Value and Earnings Growth

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