Dow Chemical aims for sustainable growth and innovation
Amid low chemical prices and demand uncertainty, U.S. materials science company Dow Chemical is showing a bullish attitude toward investing in China, with its recent launch of a new 800-million-U.S.-dollar plant in the country's eastern coastal city of Zhangjiaggang.
Chemicals – from the car you drive to the lighting in your house – they're in everything we use. It's one of the oldest and largest manufacturing industries in any country. The world's chemical industry is highly multinational, and going through a sea change, led by digitization and resulting in consolidation.
Dow, the largest American chemical company, is entering a new period after its record merger in April saw the new Dow spin off from the DowDupont entity. Dow's sharpened focus on commodity chemicals is aimed at delivering more cash and profit to shareholders.You will need to balance the scale needed for massive reinvestment, with the nimbleness required to innovate fast.
"We're a capital-intensive business, so you need to be able to generate the kind of cash you need to reinvest. You also have to have scale to innovate, so we will spend close to 900 million U.S. dollars this year on innovation projects. You can't do that if you're too small," said Jim Fitterling, CEO of Dow Chemical.
Plastic products are having an image problem as awareness grows about plastics pollution, especially in oceans. The industry needs to do its part for sustainable growth, even if it means short-term pain.
Fitterling said Dow is focusing on innovative solutions to create a circular economy, a concept that focuses on sustainability and minimizing waste. The company also wants to make plastic packaging more recyclable. However, he said it will take a collective effort achieve this.
"It's not just plastics manufacturers, it's packaging converters, it's brand owners, it's retailers, it's also waste management companies ... [who must] address these infrastructural problems," Fitterling said.
Materials science may not seem like an industry that epitomizes diversity, but Dow is trying to change that. The CEO said that Dow has opened the door for many women looking to enter the industry.
Fitterling's personal experience beating fourth stage cancer also gives him a unique perspective on life, and people. He said he has more compassion for what people are going through and more patience to deal with things.