Dow Chemical Company
The Dow Chemical Company is an American multinational corporation headquartered in Midland, Michigan, United States. The company was among the three largest chemical producers in the world in 2021. It is the operating subsidiary of Dow Inc., a publicly traded holding company incorporated under Delaware law.
With a presence in approximately 160 countries, it employs about 36,000 people worldwide. Dow has been called the "chemical companies' chemical company", referring to its sales to other industries rather than sales made directly to end-use consumers. Dow is a member of the American Chemistry Council.
In 2015, Dow and fellow chemical company, DuPont, agreed to a corporate reorganization involving the merger of Dow and DuPont followed by a separation into three different entities. The plan commenced in 2017, when Dow and DuPont merged to form DowDuPont, and was finalized in April 2019, when the materials science division was spun off from DowDuPont and took the name of the Dow Chemical Company.
History
Early history
Dow was founded in 1897 by chemist Herbert Henry Dow, who invented a new method of extracting the bromine that was trapped underground in brine at Midland, Michigan. The company originally sold only bleach and potassium bromide, achieving a bleach output of 72 tons a day in 1902. Early in the company's history, a group of British manufacturers tried to drive Dow out of the bleach business by cutting prices. Dow survived by also cutting its prices and, although losing about $90,000 in income, began to diversify its product line.In 1905, German bromide producers began dumping bromides at low cost in the U.S. in an effort to prevent Dow from expanding its sales of bromides in Europe. Instead of competing directly for market share with the German producers, Dow bought the cheap German-made bromides and shipped them back to Europe. This undercut his German competitors. Even in its early history, Dow set a tradition of rapidly diversifying its product line. Within twenty years, Dow had become a major producer of agricultural chemicals, elemental chlorine, phenol and other dyestuffs, and magnesium metal. Dow hired Charles J. Strosacker, another Case alumni, in 1907.
During World War I, Dow supplied many war materials that the United States had previously imported from Germany. Dow produced magnesium for incendiary flares, monochlorobenzene and phenol for explosives, and bromine for medicines and tear gas. By 1918, 90 percent of Dow's production was geared towards the war effort. At this time, Dow created the diamond logo that is still used by the company. After the war, Dow continued research in magnesium, and it developed refined automobile pistons that produced more speed and better fuel efficiency. The Dowmetal pistons were used heavily in racing vehicles, and the 1921 winner of the Indianapolis 500 used the Dowmetal pistons in his vehicle.
Founder's death
H. H. Dow died October 15, 1930, from cirrhosis of the liver while receiving treatment at the Mayo Clinic in Minnesota. He had personally received over 90 patents and was awarded the Perkin Medal the January before his death.Diversification and expansion
Willard Dow
was born in 1897, the year his father founded Dow Chemical. He was the oldest boy and his father required him to work in every department at the Midland plant to expand his knowledge of the company. In 1922, Willard was named a company director and became general manager of the Dow plant in 1926. When his father died, Willard was just 33, but he proved himself capable of successfully operating the company. Strosacker was appointed to Dow's board of directors.Dow invested heavily in research and development during the Great Depression.
In the 1930s, Dow began producing plastic resins, which would grow to become one of the corporation's major businesses. Its first plastic products were ethylcellulose, made in 1935, and polystyrene, made in 1937.
Magnesium
In just eight months from 1940 to 1941, Dow built its first plant in Freeport, Texas, to produce magnesium extracted from seawater rather than underground brine. The Freeport plant is Dow's largest site, and the largest integrated chemical manufacturing site in the country. The site grew quickly – with power, chlorine, caustic soda and ethylene also soon in production. When Japan attacked Pearl Harbor in December, the plant was the primary source of magnesium in the United States.After the attack, the U.S. government asked Dow to step up its magnesium production. Dow doubled its capacity in Freeport, built a second plant in Velasco, Texas, and added two new plants on the shores of Lake Michigan and Lake Huron in Michigan. In 1942, a critical year in gaining air supremacy over Europe, Dow-operated plants produced 84 percent of the nation's magnesium output.
Magnesium was required to manufacture lightweight parts for aircraft.
Growth of this business made Dow a strategic company during World War II.
Styrene
When the second world war began, access to natural rubber was essentially terminated. Polybutadiene was the synthetic rubber selected for use by the federal government. The product is made from Butadiene and Styrene. Dow was the only styrene producer in the United States.In 1942, Dow agreed to provide the government with assistance to enable the U.S. to produce synthetic rubber during the war. Dow also operated several plants at the government's request to supply synthetic rubber to their armed forces.
Dow began its foreign expansion with the formation of Dow Chemical of Canada in Sarnia, Ontario to produce styrene for use in synthetic rubber.
Plastics & foam
Dow produced several plastics used by the military in World War II, such as Ethocel, foamed polystyrene, and Saran, later sold to consumers as Saran Wrap.Dow Corning
In 1943, Corning Glass Works and Dow formed Dow Corning, established to explore silicone products for military use. Their first product was Dow Corning 4 Compound, an ignition-sealing compound that allowed airplanes to fly at high-altitudes. After the war, Dow Corning began producing products for civilian use and became the largest producer of silicone products in the world.The Ethyl-Dow Chemical Co. plant at Kure's Beach, NC, the only plant on the East Coast producing bromine from seawater, was attacked by a German U-boat in 1942.
Post War
was discharged from the Army in 1946 as a Major and returned to Dow in Midland. He was a production engineer before the war, but his military service provided experience in problem solving and managing the finances and operations of numerous facilities producing war material. He shifted to finance and accounting and ascended the corporate ladder quickly. He was added toDow's board of directors in 1948
Airplane crash
Dow President and CEO Willard Dow died in an airplane crash on March 31, 1949. Leland Doan was named Dow president; Earl Bennett, father-in-law of Willard's brother became board chairman; general manager was Dr. Mark Putnam; Calvin Campbell was named secretary and Carl Gerstacker was selected as treasurer.Leland Doan
When Leland Doan became president of Dow in 1949, the world was evolving rapidly. One of Doan's first tasks was to reorganize the company and oversee its diversification and expansion. As war production changed to a normal economy, residential construction boomed. In 1960, almost two-thirds of Americans owned their homes. As the consumer economy grew, so did the demand for household products. Dow had always sold products to other companies but recognized an opportunity and quickly developed a catalog of products for consumer use.Doan created Dow's biggest product diversification and expanded their markets. Department heads were given more authority, and he expanded his sales force and trained them to analyze their markets and the production process. A news release announced $25 million for expansion into plastic products. New facilities were planned for 1951 with a $100 million budget.
Gerstacker was named vice-president in 1955 and joined Dow's executive committee the following year. He was named chairman of the board in 1960.
Leland Doan reached Dow's mandatory retirement age in 1962 and stepped down. During his 13 years at the helm, employment at Dow more than doubled to 31,000 from 14,000, and sales soared to $890 million from $200 million.
Ted Doan
rapidly climbed the company ladder and followed his father, becoming president when he was 40 years old.Doan immediately integrated disparate company branches to create an efficient organization focused on growth and expansion outside the U.S.
His goal was to increase company earnings 10% each year. Dow sales surpassed $1 billion in 1964.
Doan began an open-door policy for employees, placed higher emphasis on research, and held the attitude that their employees were the company's strength. Those policies continued after Doan's departure from Dow.
Doan periodically visited the research labs at Dow and was always interested in the work of each employee.
Troika is Russian term for a wagon pulled by a team of three horses abreast. Doan formed a management troika with Gerstacker responsible for finance and marketing, Ben Branch in charge of international business and manufacturing, and Doan managing everything else. The three met every other week on Monday mornings. Once each year they would retreat for a week to determine company strategy for the next year and evaluate all 300 senior managers. Upon their return personnel changes were effected.
Overseas
When Dow realized that constructing manufacturing facilities in other countries created demand, they began producing plastics in Germany, Greece, Spain and Italy. The largest investment was in the Netherlands, at Terneuzen. That chemical complex opened in 1965. Plants were also built in South America: Argentina and Colombia plus New Zealand.With extensive operations all around the world, Doan and his managers had a meeting in 1965 where they acknowledged the need to decentralize. They established a headquarters on every continent to manage business. Dow Europe, Dow Latin America and Dow Pacific were established in 1966.Technology centers were also established for 33 key products.