Dow to Increase Refined Ethylene Oxide Capacity in Terneuzen, The Netherlands

Investment Improves Cost Efficiency and Reduces Emission

Midland, MI .-The Dow Chemical Company announced today that it will transition to ethylene oxide (EO)-only production at its EO/EG plant in Terneuzen, The Netherlands, shutting down production of ethylene glycol (EG) at the site before the end of 2008. In 2009, Dow will implement an efficiency improvement project that will enable a 22 percent increase in purified EO production capacity and significantly reduce emissions at the plant.

“This project is aligned with Dow’s strategy to transform less cost-effective investments into opportunities with higher growth potential,” said Lee Christens, global business director, Dow EO/EG. “The transition to EO-only is an example of Dow’s commitment to further grow its Performance businesses, such as polyurethanes, through an increased supply of competitive-cost raw materials.”

The efficiency improvement project will also lead to a 12 percent reduction in priority emissions and a 17 percent reduction in chemical emissions at the Terneuzen site. This benefit brought by the project supports Dow’s efforts to lessen its overall environmental footprint, as part of its 2015 Sustainability Goals.

“As significant EG capacity additions are scheduled to come online in Asia and the Middle East, the EG market is expected to experience a surplus by mid-2009,” said Christens. “In the face of this future surplus, Dow decided the time was right to shut down Terneuzen EG production.”

The transition to EO-only production in Terneuzen supports Dow’s strategy to grow its Polyurethanes business globally. In September 2007, Dow Polyurethanes announced it would move forward with an expansion of its polyols plant in Terneuzen. Additional purified EO capacity at the site will support the growth of EO derivatives, such as polyether polyols, used in the manufacture of polyurethanes products and systems formulations.

EO is a versatile intermediate also used in the production of materials for glycol ethers, ethanolamines and ethoxylates.