® ®Trademark of The Dow Chemical Company Jerome Peribere President and CEO Dow AgroSciences Merrill Lynch Agrochemicals Conference Merrill Lynch Agrochemicals Conference June 5, 2008
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®Trademark of The Dow Chemical Company
Jerome PeriberePresident and CEODow AgroSciences
Merrill Lynch Agrochemicals Conference Merrill Lynch Agrochemicals Conference Merrill Lynch Agrochemicals Conference June 5, 2008
®
JP: June 5, 2008®Trademark of The Dow Chemical Company
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Commodity Prices Buoyed by Strong Demand Trading volatility since 2006
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JP: June 5, 2008®Trademark of The Dow Chemical Company
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$2.0
$2.5
$3.0
$3.5
$4.0
2001 2003 2005 2007
$Billion Sales
Dow AgroSciences Growth Ahead of Market Trend
6% CAGR
23% CAGR
$0$100
$200$300
$400$500
$600
2001 2003 2005 2007
$Million EBIT*
*Non-GAAP financial measure, excludes certain items
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0.00.20.40.60.81.01.21.4
1Q07 1Q08
Outstanding Momentum Continued in First Quarter
All-Time Record Quarter – Sales and EBIT Strong Volume Growth in all GeographiesGrowth in Local Pricing
Sales EBIT*27% Growth$Billion 17% Growth
$Million
150
200
250
300
350
1Q07 1Q08
*See www.dow.com for reconciliation of Non-GAAP financial measure
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Investment Drives Growth and Returns
*Non-GAAP financial measure, excludes certain items
SARD CAGR
EBIT* CAGR
SALES CAGR
2%16%
5%
2001-2010
CAGR Goal
6%
23%1%
2001-07
Actual CAGR
Technology Leadership
Growth
$1 Billion Corn Business
Ag Chem Pipeline
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Ag Chem Pipeline is Robust
Growth Components - New Product Launches- Segmentation
Technology Leadership
Growth
$1 Billion Corn Business
Ag Chem Pipeline
Ag Chem Pipeline
Extending “green”
insecticides
Excellent combination
partners
Resistance breakers
Filling needs unmet by
biotechnology
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Pipeline Builds and Expands Agricultural Chemicals Success
Patented/Generic Balance
Future Pipeline
ChannelStrength
Geographic Balance
PortfolioBreadth
Replace and expand strategy
Launches continue in 2008
Maturity Sales >$300MM
Excellent fit globally
Extends “green”insecticides
Launched in 2007, continues in 2008
Maturity Sales >$100MM
Registered in 4 countries; many others to follow
Opens new market space
New broad-spectrum cereal herbicide
Launching2008
Maturity Sales >$170MM
To be Registered in 45 countries
Excellent combination
partner
Resistance breaker
Expedited Timeline
For large (>$2B)market segment
Global potential
Fits growing need unmet by
biotechnology
1
4
5
2
3Pastures/Cereals/
Oilseed rape
Pyroxsulam New InsecticideAminopyralid Spinetoram Ag Chem Pipeline
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Broad Leaf WeedsCross SpectrumGrass WeedsBurndownOthers
Segmentation Enables Growth as Market Moves to Our New Product Space
Ag Chem Pipeline
Broad Leaf WeedsCross SpectrumGrass WeedsBurndownOthers
Cereal Herbicide Market in 2008
Source: Agrobase
41% 21%
27% 10%
1%
Cereal Herbicide Market in 2015
Cross Spectrum segment will increase to 38%
38% 15% 38% 8%
1%
Grass weed segment will decrease to 15%
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Cereal Herbicides Mix Strategy Delivers Customer-Valued Solutions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pre-2000 2003 2007 2011
Enables new concepts for growth in multiple marketsStrengthens product performanceReplaces off-patent chemistry with proprietary mixtures
Cereal Herbicide Portfolio % Total Sales
New Product LaunchesFlorasulam PyroxsulamSTARANE™
Three-Way Mixture (Patented) Three-Way Mixture (Patented) Three-Way Mixture (Patented) Three-Way Mixture (Patented)
Two-Way Mixture (Patented) Two-Way Mixture (Patented) Two-Way Mixture (Patented) Two-Way Mixture (Patented)
Single Entity (Patented)Single Entity (Patented)
Single Entity (Patented)
Single Entity (Patented)Single Entity (Off Patent)
Single Entity (Off Patent)Single Entity (Off Patent)
Single Entity (Off Patent)
Future New
™Trademark of Dow AgroSciences LLC
Ag Chem Pipeline
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Building a $1 Billion Corn Business
Growth Components - Germplasm progress- Channel access
Technology Leadership
Growth
$1 Billion Corn Business
Ag Chem Pipeline
$1 Billion Corn Business
Germplasm Acquisitions
Geographic Acquisitions
Access to DeKalb hybrids
SmartStax™, DHT Family of
Traits
™Trademark of Monsanto Technology LLC
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Above Ground
Below Ground
Smar
tSta
x™+
DH
T
Herbicide Tolerance
DHT
Multiple Modes of Action for Insect and Weed Control Open New Acreage Opportunities
Increase of Glyphosate
Resistant Weeds
$1 Billion Corn Business
Source: University and public data
+50 MM acres of corn require a ~20% refuge
Potential +8MM additional acre opportunity
®HERCULEX is a trademark of Dow AgroSciences LLC; SmartStax, YieldGard and Roundup Ready are trademarks of Monsanto Technology LLC.
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JP: June 5, 2008®Trademark of The Dow Chemical Company
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0%
10%
20%
30%
40%
50%
60%
70%
2007 2010E 2012E
Share Penetration of HERCULEX Traits of Total U.S. Corn Acres
HERCULEX®
HERCULEX®+ SmartStax™
launch
HERCULEX® + SmartStax™
IR= Insect Resistance
By 2012: HERCULEX® the Leading IR Trait$1 Billion Corn Business
®HERCULEX is a trademark of Dow AgroSciences LLC, ™SmartStax is a trademark of Monsanto Technology LLC.
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Acquisitions Illustrate Disciplined, Effective Progress
More to come! Growing channel for SmartStax™ opportunity Complementary growth for Mycogen Seeds Marketed under current brandRun independently
$1 Billion Corn Business
™Trademark of Monsanto Technology LLC
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Technology Leadership
Growth Components - Next Generation Herbicide
Tolerance - Improved food ingredients- Gene regulation
Technology Leadership
Growth
$1 Billion Corn Business
Ag Chem Pipeline
Dow Herbicide Tolerance Traits
Zinc Fingers
DHA Omega-3 Fatty Acid
Technology Leadership
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Grasses
Weed Examples:HorseweedGiant RagweedCommon RagweedPalmer AmaranthWaterhempHairy FleabaneRyegrass sppJohnsongrassJunglericeSourgrass
BroadleafGrassesBroadleafConfirmed
Suspected
Confirmed and Developing (Suspected) Resistance to Glyphosate Revolutionary new family of traits with exceptional performanceProvide tolerance to multiple classes of herbicidesThe best competitive traits to improve the performance of herbicide-tolerant cropping systems such as glyphosateAnticipated Launch:
Corn: 2012Cotton, Soybeans: 2013
Source: International Survey of Herbicide Resistant Weeds and public literature
Technology Leadership
Farmers Need Dow Herbicide Tolerance Family of Traits
Dow’s Herbicide Tolerance Trait solutions uniquely provide selective use of multiple modes of action for both broadleaf and grass weed resistance management
9
13
7
5
Global
Transformed Untransformed
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0%
10%
20%
30%
40%
50%
60%
70%Share
Adds More Power to Technology Share
Targets for Share of U.S. Acres in 2015 with Dow Herbicide Tolerance Technology
Technology Leadership
Cotton Corn Soybeans
Just Announced:
Dow AgroSciences, Mertec LLC, M.S. Technologies LLC
Collaborate to Bring New Soybean Technologies to U.S.
Soybean Growers
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DHA a Preferred Omega 3 for Human Diet
The Value PropositionDow AgroSciences to produce DHA-rich canola oil, Martek to market An economical vegetarian source of DHA rather than fish or fish oil alternativesTechnology opportunity to help consumer have healthier dietOne of first traits to market that will help provide this essential nutrient for human health Gene set with simpler biosynthetic process than competitors’approaches, produces DHA with fewer intermediates
Technology Leadership
The Distinct Health Benefits of
DHA=Docosahexaenoic Acid EPA=Eicosapentaenoic Acid ALA=Alpha-Linolenic Acid
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Exciting Progress Being Made with Zinc Fingers
Milestones Achieved and In Progress
The Best Technology for Rapid Product Development and New Applications
Zinc finger proteins afford the broadest and most flexible range of capabilities for gene targeting, gene editing and gene regulation
Enable precision engineering of genomes to eventually deliver “Designer” crops
2008 Milestones
Gene Editing• Targeted sequence modification of a native gene• Targeted regulation of native gene expression
Distribute the Technology• Establish collaborations with leading academic researchers• Develop technical partnerships in new fields with private companies• Intention is to sublicense the technology broadly, including other
companies in the plant field
Just Announced! • Have achieved precision
insertion of a proprietary gene to enable rapid stacking with existing traits
• Have proven activation and repression of native genes associated with seed oil biosynthesis in canola plants
Technology Leadership
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Pipeline Reinforces Technology Leadership
Discovery Development Launch
Chem
ical S
olut
ions
Biol
ogica
l Sol
utio
ns
*Novel Delivery SystemAnimal HealthVaccine 1
Animal HealthVaccine 2
Animal HealthVaccine 3
Stress Trait 1
Healthier OilTrait 3
InsectTrait 2
NutritionTrait 1
InsectTrait 1
New Venture
NutritionTrait 3
Yield Trait 1
Healthier OilTrait 1
Healthier OilTrait 5
DHTTrait 2 Oilseed Breeding
Enhancement
New Venture
DHTTrait 1
Fungicide
Herbicide
NDS*4
ChewingInsecticide
Herbicide
FungicideHerbicide NDS*3
NDS*1
Sap FeedingInsecticide
ECOZOME™
SmartStax™
FutureAdvanced in 2007 Advanced in 2008
NDS*2
NutritionTrait 2
Healthier OilTrait 2
Healthier OilTrait 4
™Trademarks of Dow AgroSciences LLC, SmartStax is a trademark of Monsanto Technology LLC.
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JP: June 5, 2008®Trademark of The Dow Chemical Company
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Investment Drives Growth and Returns
*Non-GAAP financial measure, excludes certain items
SARD CAGR
EBIT* CAGR
SALES CAGR
2%16%
5%
2001-2010
CAGR Goal
6%
23%1%
2001-07
Actual CAGR
Technology Leadership
Growth
$1 Billion Corn Business
Ag Chem Pipeline
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SEC Disclosure Rules
Some of our comments today include statements about our expectations for the future. Those expectations involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our expectations change. If you would like more information on the risks involved in forward-looking statements, please see our annual report and our SEC filings.
In addition, some of our comments reference non-GAAP financial measures. Where available, a reconciliation to the most directly comparable GAAP financial measures and other associated disclosures are provided on the internet at www.dow.com in the Financial Reports page of the Investor Relations section.
®
®Trademark of The Dow Chemical Company