Emily A. Coston
Regent University College of Arts & Sciences
ECON 230
June 30, 2022
Dow Inc.
Dow was founded in 2019 after a spin-off from the DuPont company. The large chemical company is one of the world’s leaders in chemical production, mainly in the form of plastics. Their chemical technologies include adhesives and sealants, polyethylene, polyurethane, silicones, salines, elastomers, and plastomers (Dow. Inc, 2022).
In the world’s top fifty leading chemical companies, Dow rests at number three. The German chemical company BISF did 67.5 Billion USD in sales in 2020, China’s chemical company Sinopecdid did 46.7 Billion USD in sales in 2020, and The United States chemical company Dow did 38.5 Billion USD in sales in 2020 (Tullo, 2021). Dow announced their plan to initiate investment to increase global competitive advantage and remain steadfast in the US competitive advantage over other chemical companies. In 2017 they planned to invest more than 12 Billion USD towards the integration of US investments and expand their Texas Ethanyl Cracker to become the largest in the world (Corporate Dow). They began to hone their skills for high performance coatings for pipes and fillings. Dow is working towards advancements in polyethylene and adhesive innovations and rapid prototyping contributing to their US and global competitive advantage over the remaining 47 companies in world chemical leaders. (dow.inc 2021).
As one of the world’s leading chemical and plastic corporations, Dow remained profitable amid the Corona Virus. As the world’s demand for single-use plastic supplies skyrocketed, Dow was able to supply that need with single-use plastics for many uses during the coronavirus (Hays, 2021). In food packaging, the “US domestic polyethylene prices have risen to 57 cents/lb ($1,256/mt) since June 2020 as demand climbed as coronavirus shutdowns eased, S&P Global Platts data showed. Demand kept climbing as two hurricanes in 2020, the February 2021 deep freeze, operational issues, and turnarounds kept supply tight, and inventories low,” meaning Dow was able to supply the demand for polyethylene products to the manufactory of food packaging sources (Hays, 2021). The world runs on plastic, which became more evident as the world started using single-use plastics. However, Dow took a financial hit during the coronavirus, like many other companies. Dow is constructing a polyolefin facility in Europe to meet the demand for high-performance specialty piping and fittings (Dow. Inc).
In 2020, the United States GDP was 20,936.6 trillion dollars, making up 18.55% of the world economy (Trading Economics, 2022). Saudi Arabia's GDP per capita is approximately 700 billion dollars. Dow is the largest investor in Saudi Arabia's chemical plants, especially in petrochemical. As a large mulit-nationa country, Dow did 55 Billons in net sales in 2021, has 35,700 employees, 104 manufacturing stores, and manufactures products in 31 countries (Dow, Inc.). As the company grows, its roots will run deeper into foreign affairs and investments.
The fluctuations in the GDP play a significant role in the state of a country, especially a multi-national company. As economic growth and investments continue to thrive, so will the workforce and the company's profitability. Alternatively, if the economic growth dwindles, so will investment and patients making a significant dent in the company’s profitability. This was evident during the COvid-19 Pandemic. Dow saw a 225 million dollar loss n the second quarter of 2020 due to the covid-19 pandemic, however they made a comeback in 2021 with a 1.9 billion dollar profit (Hays, 2021).
Bibliography
Dow. (2022). Dow announces the next phase of comprehensive investments to deliver long term competitive advantage and earnings growth.
Hays, K. (2021). Dow sees continued chemical demand growth: CFO. Petrochemicals. https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/petrochemicals/072221-dow-sees-continued-chemical-demand-growth-cfo
Trading Economcs. (2021). The United States GDP. https://tradingeconomics.com/united-states/gdp#:~:text=In%20the%20long%2Dterm%2C%20the,according%20to%20our%20econometric%20models.&text=The%20gross%20domestic%20product%20(GDP)%20measures%20of%20national%20income%20and,for%20a%20given%20country's%20economy.
Tullo, H. (2021). C&En’s global top 50chemical firms for 2021. C&En Chemical and Engineering News. Volume 99 issues 27. https://cen.acs.org/business/finance/CENs-Global-Top-50-2021/99/i27