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Dow and Izolan form joint venture to serve growing systems business in Russia

August 08, 2006 — The Dow Chemical Company (NYSE: DOW) and Izolan announced today the formation of a joint venture company that will provide customer-tailored, polyurethane systems products to a growing customer base in Russia. Subject to regulatory and other customary approvals, the new company, Dow Izolan, will be based in Vladimir, a city 170km north east of Moscow.

Dow Izolan will combine Dow's Polyurethane Systems business, known for its global leadership position in technology and raw materials back integration, with Izolan's strong local customer focus, product positioning and market experience, to become the leader inRussia's polyurethane systems house marketplace.

The new company will employ more than hundred employees, mainly from Izolan's current site in Vladimir. Further, the joint venture plans to build a new, large, state-of-the-art production plant in theVladimir area within the next two years. The new facility will produce a broad variety of polyurethane systems products to meet the growing needs of customers in the region.

«Dow and Izolan have been working together since the 1990s on various commercial projects,» said Mikhail Tsarfin, general manager of Izolan and designated commercial director for Dow Izolan. «This new joint venture — which harnesses a detailed understanding of polyurethane chemistry, an in-depth knowledge of the polyurethane systems market and a proven track record of customer commitment — is poised to become the leader in Russia's polyurethane systems house marketplace,» Tsarfin added.

«Over the past few years, Dow's Polyurethane Systems business has been growing consistently through acquisitions and joint ventures and has established a solid reputation for providing reliable, high-performance and high-quality polyurethanes systems products» stated Juan Antonio Merino, global general manager for Dow Polyurethane Systems. «Our joint venture with Izolan marks an important step in supporting Dow's global leadership position in polyurethane systems.» Merino added.

«Since 1974, Dow has been providing quality products and services to our customers in Russia and the CIS,» stated Adriaan van den Berge, general manager for Dow Europe in Russia. «The creation of the Dow Izolan joint venture is the latest example of Dow's commitment to building solid businesses in the region.» van den Berge added.

«This joint venture demonstrates Dow's continued commitment to invest in our Performance businesses and to grow in emerging geographies,» stated Pat Dawson, vice president for Dow Polyurethanes. «By blending the strengths of both our companies, we are establishing the foundation for a strong and successful partnership that will better serve the needs of customers, accelerate innovation and provide opportunities for additional investment in the region.» Dawson added.

No further details relating to the transaction were disclosed.

About Dow

Dow is a diversified chemical company that harnesses the power of science and technology to improve living daily. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to «Dow» or the «Company» mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

About Izolan

Located in Vladimir (Russia), Izolan was established in 1991 by recognized Russian specialists in the polyurethanes science and chemistry applications. Izolan main activity is the production and sales of Polyurethane Systems for rigid and flexible foams. Izolan employs about 100 employees and has more than 400 customers in Russia and the CIS (Commonwealth of Independent States). In 2005, Izolan Systems sales in Russia reached more than 20,000 MT, making Izolan the market leader in the Polyurethane Systems in Russia and the CIS. More information about Izolan can be found at www.izolan.com.

About Dow in Russia

Dow has been present in Russia since 1974 with sales activities and technical support provided from the representation office in Moscow and the service center in Zelenograd. Recently, Dow announced the construction of a production plant in the village of Kryukovo, close to Moscow, to produce STYROFOAMT extruded polystyrene insulation boards (XPS) and other thermal insulation products designed to increase the energy efficiency of homes and commercial buildings. More information about Dow and Dow in Russia can be found at www.dow.com or www.dow.ru.

About Dow Polyurethane Systems

Dow Polyurethane Systems provides formulated polyurethane systems for the manufacture of flexible, rigid and microcellular foams, elastomers, adhesives, coatings or binders used in such applications as construction, automotive, footwear, sports equipment and furniture. Focused on meeting the specific needs of customers in their local region, Dow Polyurethanes Systems operates a global network of 18 systems houses with manufacturing units and 8 service centers, supported by three research and development centers. Dow Polyurethane Systems is focused on providing innovative, tailor-made solutions to customers world-wide. For more information, please visit www.dowpolyurethanes.com.

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Izolan, Izolit, Izostab, Izokor, Vibrolan, Vikat, Shahtizol, Voracor, Voramer, Voralast, Voratron, Specflex, Specfil, Autothane — trademarks, registered in Russian Federation
Diprane, Durelast, Duramould, Dynathane, Hypercrete, Hyperkote, Hyperlast, Rotakote, Тraffideck — trademarks of «Dow Hyperlast» company