Cellulose Acquisition Prove Successful for Dow

July 1, 2008, marks the first anniversary of Dow Wolff Cellulosics, which was formed by merging Wolff Walsrode AG and The Dow Chemical Company’s Water Soluble Polymers business. “Through continued investment in manufacturing capability and by providing innovative technology solutions to our customers, we have combined the best of both companies into a market-leading player,” said Martin Sonntag, general manager of Dow Wolff Cellulosics.

Manufacturing milestones support the future of the cellulosics industry Dow Wolff Cellulosics has invested in capacity that will help enable reliable supply for customers.

Central to its capacity expansion plans was Dow Wolff Cellulosics’ September 2007 announcement to construct a Methylcellulose (MC) production plant in Bitterfeld, Germany. When completed, this facility will be the world’s largest and most competitive MC plant, “The new plant will operate with state of the art technology, and will enable Dow Wolff Cellulosics to further increase supply reliability overall and global manufacturing flexibility,” said Sonntag. It remains scheduled to come on stream as planned in Q1 2009.

The Company also began operating a new MC train, designed to deliver products serving construction and industrial applications, in Midland, Michigan (USA). A new low-viscosity (LV) train in Bomlitz, Germany is scheduled to come on stream in August 2008 to meet ongoing demand in the food, personal care and pharmaceutical industries.

“With five Methylcellulosics sites and five additional specialty chemicals manufacturing sites, we offer a competitive and reliable multiple site-based sourcing grid for our customers around the globe,” said Sonntag.

Capacity for producing Dow™ Latex Powder (DLP) also doubled during the past 12 months. Dow Wolff Cellulosics will take full advantage of the contribution that DLP can provide in construction applications like cement-based tile adhesives and the high-growth, new application known as external insulation finishing systems.

Innovation recognized by customers and the industry “When we launched,” said Sonntag, “we emphasized that application and formulation expertise delivered through strong technical relationships with our customers would prove central to our business model. A number of commercial milestones demonstrate this successful commitment.”

Dow Wolff Cellulosics’ FORTEFIBER™ Soluble Dietary Fiber received the Food Expo Innovation Award from the Institute of Food Technologists. FORTEFIBER was recognized for its ability to increase fiber content in a variety of products without sacrificing taste and texture.

The business also introduced enhanced food emulsion technologies using METHOCEL™ Food Gums. One technology replaces trans fats and reduces the saturated fat in baked goods while preserving both taste and texture. A second innovation enables meat producers to reduce overall fat content by replacing partially hydrogenated oils, high in trans fats in frankfurters, burgers and sausages.

New technology for pharmaceuticals and personal care enable product development

In 2007, Dow Wolff Cellulosics licensed its foam granulation technology to Bristol-Myers Squibb to be used in the development and manufacture of tablets intended for clinical and commercial use. This technology will change the way pharmaceutical tablets have been manufactured for the last 50 years.

For the personal care market, the company launched the SatinFX™ delivery system, which enables encapsulation of both hydrophobic and hydrophilic activities in skin care products, during the In-Cosmetics trade event in April 2008. It also entered the sun care segment of the personal care market through an agreement with Advanced Nanotechnology Limited to market ZinClear™ IM zinc oxide dispersions in North America and Latin America. ZinClear combines the full-spectrum coverage and safety of zinc oxide with superior transparency and ease-of-use over other inorganic UV absorbers.

Demonstrated value of customer service and relations

In March 2008, Dow Wolff Cellulosics became the first chemical manufacturer ever to receive the Johnson & Johnson Global Strategic Supplier’s Program Gold Award for Pharmaceutical Excipients. The Gold Vendor status is a rigorous Johnson & Johnson’s measurement of quality, service level, continuity and support, level of technical and regulatory support, innovation and purchase cost versus reference commodity index.

Plans for continued progress

Dow Wolff Cellulosics conducted market research with customers during its first year of operation to ensure it was on track. “Results suggest we maintained strong technical customer relationships while increasing positive views of our global reach and commitment to sustainable chemistry based on renewable resources and environmental health and safety,” said Sonntag. “Our milestones confirm we have successfully leveraged the strengths of our legacy companies. It is our employees’ commitment to technical innovation and service excellence that has helped us realize the greater potential together.

“Our first year is just the beginning. We will continue to strive to be the preferred development partner for our customers. These consumer brand owners can count on our innovation, application and formulation expertise to help them find and deliver new solutions.”

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