Dow to Expand Cellulosics Capacity for Industrial Specialty Applications

Investment Will Enable Growth in Key End-use Applications, as well as Process Improvements and Energy Cost Savings

Midland, MI - January 15, 2007 - Further to its strategic agenda to strengthen its Performance business portfolio, The Dow Chemical Company (“Dow”) announced today that its Water Soluble Polymers business unit will increase focus on paint and oilfield applications with enhancements to certain manufacturing processes and capacity additions for CELLOSIZE™ hydroxyethylcellulose (HEC) in Institute, West Virginia.

The undisclosed, significant investment underscores Dow’s commitment to various industrial specialty applications and will yield an additional 5 MM pounds each year, along with numerous process improvements which will lead to energy cost savings of more than US $3 million per year. The multi-phase project is anticipated to be completed during the first half of 2009.

“This expansion is an important initiative for growing our performance business and marks the third major investment in our manufacturing assets within the last two years,” said Peter Davies, business vice president at Dow. “In addition to CELLOSIZE, we also announced global investments in our METHOCEL™ cellulose ethers and DOW™ Latex Powders brands. Together, these three expansions will allow us to offer a more diverse range of solutions for cellulosics customers worldwide.”

The capacity expansion will primarily support additional production of more new CELLOSIZE products for use in paint and oilfield applications, such as hydrophobically modified hydroxyethylcellulose (HMHEC), a performance additive for latex paint formulations that was introduced in November 2005. “As we work to enhance our portfolio of solutions, this planned improvement will position Dow as a stronger cellulosics partner. We are dedicated to developing new products and technologies to drive growth in key applications,” said Eunice Heath, global business director, Dow Water Soluble Polymers.

“We’re excited that the CELLOSIZE business has chosen to invest in West Virginia,” said Allan Fowler, Dow site leader for West Virginia. “This is a great example of our ability to be a competitive location and contribute to the success of the Company.”

About CELLOSIZE Hydroxyethyl Cellulose

CELLOSIZE™ hydroxyethyl cellulose (HEC) is a nonionic, water-soluble polymer that can thicken, suspend, bind, emulsify, form films, stabilize, disperse, retain water, and provide protective colloid action. It is readily soluble in hot or cold water and can be used to prepare solutions with a wide range of viscosities. It has outstanding tolerance for dissolved electrolytes. In addition, CELLOSIZE HEC offers narrow viscosity ranges, consistent viscosity reproducibility, and excellent solution clarities. For more information, please visit www.cellosize.com.

About Dow Water Soluble Polymers

The global Water Soluble Polymers business is a US$ 650 million business within the Performance Plastics and Chemicals portfolio of The Dow Chemical Company. It offers a wide portfolio of cellulose ethers and provides application and formulation expertise, products, and related technologies. The business employs nearly 700 people at 14 sites worldwide. Its brands include Amerchol, a global manufacturer and marketer of performance ingredients for personal care formulations; CELLOSIZE™ Hydroxyethyl Cellulose (HEC); Dow Dispersion Sciences, an advanced technology for the personal care industry; DOW™ Latex Powders; ETHOCEL™ Ethylcellulose Polymers; METHOCEL™ Cellulose Ethers; and POLYOX™ Water-Soluble Resins.

About The Dow Chemical Company

Dow is a diversified chemical company that harnesses the power of science and technology to improve living daily. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

®™* Trademark of The Dow Chemical Company (“Dow”) or an affiliated company of Dow.

Contact Information

Jennifer Sigsworth

The Dow Chemical Company

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