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Dow Chemical Company Forms Dow Construction Chemicals

By Sandra Levy | September 10, 2009

Unit combines Rohm and Haas Acquisition with Dow Wolff Cellulosics

The Dow Chemical Company announced the formation of Dow Construction Chemicals (DCC), a new global business within the Dow Advanced Materials portfolio that combinescapabilities of Rohm and Haas Company, acquired in April 2009, and Dow Wolff Cellulosics, formed in 2007. DCC will deliver innovative and sustainable solutions to manufacturers of building and construction products worldwide.

"Strategically we think it makes sense to create the new business because we are trying to be market facing. This business is made up of two pieces," said Colin Gouveia, commercial director for DCC in North America. "One piece is the heritage Rohm and Haas polymers that go into the building and construction area, including nonwovens products. With that you get the world leader in acrylic technology, long a participant in the nonwoven field. You also get a combination with heritage Dow Wolff Cellulosics, which is the world leader for cellulosic thickener products in the building and construction area."

Mr. Gouveia went on to explain that DCC is an ingredient supplier to customers who make downstream construction products. "We are market facing so we believe that we are always in tune with what the market needs are. We have good industry intimacy in terms of how we service the different segments within the building and construction area. We have excellent customer focus and unmatched expertise in terms of personnel. We have a deep understanding of the technical and commercial needs of our customers," stated Mr. Gouveia.

Both companies have a customer-centric approach, working closely with customers from beginning to end as they commercialize new products that use their technology. Under the new organization, this business model will continue only with a more robust portfolio of technologies.

DCC is a stand-alone business within Dow Advanced Materials and building and construction is a $2 billion business of which construction chemicals represents a significant portion.

DCC serves a broad range of applications in the building and construction industry. In the nonwovens market, DCC sells acrylic products and acrylic modifiers that are used in making shingle mat and specialty mat. "We are one of the leading suppliers of formaldehyde free technology that go into making fiberglass building insulation. We serve customers who make caulk and sealants products and tape joint compounds as well as customers who manufacture ceramic tile adhesives. We participate in the cement modification markets. We also supply products for elastomeric roof coatings and we are a supplier to the exterior insulated finish systems industry," Mr. Gouveia said.

As for future expansion within nonwovens, DCC sees nonwovens as a growth area for its business in general. A good examploe of this is the trend of using fiberglass scrims on gypsum board. "Companies in a sustainability play are replacing paper and replacing paper on gypsum board with fiberglass," Mr. Gouveia said. "This is being done primarily to manage the mold and mildew issue. We see a lot of gypsum board producers moving in that area. That will inherently grow the fiberglass mat market. We also see a lot of growth in terms of a lot of the green drivers that are taking place in the industry around sustainability and energy efficiency. The government and many agencies are recommending people insulate their homes or put in more insulation because that increases energy efficiency of homes and helps lower the carbon footprint and that will inherently grow the insulation industry and will also grow our business."

For many customers who are asking for technologies to replace formaldehyde base binders, DCC offers its Aquaset water based thermoset product used in building insulation. The unitlalso also has new products under development for other areas that offer lower VOC contnent. The formaldehyde free technology or formaldehyde free alternatives, maintain the same performance and costs as competing products, Mr. Gouveia added.

DCC has several different programs underway to develop specific technology for segments within the nonwovens industry, in particular glass mat and shingle mat. "These products are in the pipeline. In terms of new technology we have for single mat, we'll be able to launch a new product in the next six months," said Mr. Gouveia.

When queried why the company felt the time was right to launch DCC during the current downturn in the economy, Mr. Gouveia responded, "It's no secret the economy is not in top shape and in some cases the construction industry is depressed. We continue to invest in new technology because we think growth will be achieved through innovation and new products. We anticipate when the market turns around we'll be in a position to capture that growth and support our customers. The combination of the new business coupled with the core Dow research programs gives us an advantage in terms of science and capabilities of delivering new products. Our market reach in terms of our new organization gives us great channels to market and long term customer relationships."

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