Dow banks on product innovation

Chemicals company to launch new silicon materials under Dowsil name

Dow Chemical, the world’s second-largest chemical company, is banking on product innovation to better cater to demand from Chinese customers and further expand its presence in the country.

“I would love to see China become the biggest country for Dow as a whole … Within the next three years, it will be the biggest country in which we are selling (silicon products), which effectively means the Dow silicon business division will become a Chinese company,” said Dan Futter, global commercial vice-president of Dow consumer solutions division.

According to Futter, Dow’s silicon business is more like a Chinese company in terms of behavior, because it is locally relevant to Chinese customers and culturally relevant to their everyday lives.

“Of course we are an American company, but in terms of thinking about how we innovate, the speed of innovation, the products we are introducing, they are heavily influenced by Chinese customers’ needs,” he said.

China became the company’s second-largest market in terms of sales after the US four years ago, and its significance to the company is growing, Futter said. In 2016, China accounted for about 10 percent of Dow’s global business.

Futter said the company will launch 50 new products under the Dowsil brand, the company’s Dow Corning silicone-based building products, in China this year, with a considerable portion of them tailored for the China market.

Currently, Dow’s business in China contributes roughly 15 percent of its total global revenue after Dow Corning integrated into Dow, and this figure is expected to reach 20 percent in the future.

China is expected to account for between 50 percent and 60 percent of global specialty chemical demand growth through 2025, according to forecasts from research firms IHS and McKinsey.

The country’s specialty chemical market, on the other hand, is expected to see solid growth, with per capita consumption of specialty chemicals

I would love to see China become the biggest country for Dow as a whole … Within the next three years ...”

Dan Futter,

at about one-third that of developed countries.

Dow Corning, a joint venture between Dow and Corning launched in 1943, became a wholly owned subsidiary of Dow Chemical in June 2016. The Dow consumer solutions division is seeking to increase its global reach with complementary products and more robust innovation engines, by expanding its presence in a deeper and more focused way in key markets, while delivering industry-leading innovation, Futter said.

The company has also launched the Chinese version of Dow’s e-commerce website through which consumers can search for and order Dow’s entire range of silicon products, check their real-time inventory, and track the status of their orders.

The European version of the e-commerce website brought in more than $100 million of revenue in the two-and-a-half months since its launch.

Futter said the new Chinese website is likely to succeed, largely due to Chinese people’s adoption of e-commerce at a quicker rate than anywhere else, as well as the sector’s evolution in a broad range of industries, from daily necessities and fresh groceries, to automobiles.

From January to June of 2017, total online retail transactions across China reached 3.1 trillion yuan ($493 billion), up 33.4 percent year-on-year, according to Shenzhen-based Qianzhan Industry Research Institute. It projected the annual figure for 2017 will reach 7.6 trillion yuan, and further swell to 11.63 trillion yuan by 2020.