Dow providing innovative materials solutions
Firm committed to meeting Chinese market’s demand for higher-quality goods and services
How has the ongoing supplyside reform changed the nation’s economic growth and your company’s business in China?
Dow has achieved double-digit volume growth in China in the past several years, and we see that momentum remaining in 2019 as well.
That growth is mostly driven by consumer needs in downstream markets, where Dow provides innovative materials solutions.
We see tremendous potential here, as China is home to the largest (and growing) population of middle and high-income consumers in the world, who require higher-quality goods and services that perfectly match Dow’s offerings.
Supply-side reform supports and strengthens the more innovative, efficient and environmentally sustainable players in the market, offering an opportunity for Dow, its local customers and its partners.
In 2018, Dow commissioned two new production lines to meet these needs, one for high-performance coating materials in Chengdu, Sichuan province, and a polyurethane line in Zhangjiagang, Jiangsu province.
We also announced the construction of a new specialty resin plant that will open in 2021. The facility will provide resin intermediates for high-value silicone products, including home and personal care, pressure sensitive adhesives, antifoams and moldable optics for lighting.
What’s your comment on China’s policy on foreign enterprises and foreign investment? How can the country further improve its business environment for foreign investors?
The year 2018 marked the 40th anniversary for China’s reform and opening-up policy, which has guided China to the growth trajectory that has immensely benefited Chinese people and the global market.
Dow has been privileged to have the opportunity in the past 40 years to provide feedback and recommendations to the Chinese government at both the central and local level, to make China a friendlier and more efficient place for investors.
We understand the Chinese government have set plans in place for 2019 to remove market access barriers, protect intellectual property, increase imports and reduce taxes. We believe these are all important and correct policy priorities that will support companies and the economy.
I believe China should stick to its commitment to an open and fair market, continuous investment in innovation and a robust regulatory system, which have helped to create the success story of China in the past four decades.
How has innovation changed China’s economic development and your company’s business in China?
As a leading global materials science company, Dow’s operation on the Chinese mainland started in 1979 when we established our office in Guangzhou, Guangdong province.
In the past 40 years, Dow’s business focus in China has shifted from trading to on-ground manufacturing and innovation, which is driven by rapidly growing market needs for higher-quality goods and services.
That changes the way we do business in China in three aspects:
Investment focus: We have to invest in on-ground facilities to address local market needs in timely and efficient ways. Today, we operate 17 manufacturing sites and 11 offices across China.
Among those, two manufacturing lines and one office were launched in 2018. These investments focus on delivering value-added products and services to meet the fast-growing demand from downstream markets in China.
Innovation strategy: Dow has a strong innovation pipeline and capability for China. The Shanghai Dow Center, the largest integrated R&D center that Dow has invested in outside the United States, is home to over 100 labs and 600 scientists, who deliver innovations collaboratively with our local customers and partners, including many local leading household brands.
The strategy accelerates delivery of innovations to the market. Today, most of the innovations in our pipeline aim to be achieved in the near term, that is, within one to three years.
In 2018, we set up two virtual customer innovation centers at Dow offices in Guangzhou and Chengdu respectively, which enable Dow scientists based in Shanghai to provide online technical support to local customers.
Customer centricity: Innovation has propelled China’s economic development at an amazing speed.
We have seen a number of industry-disruptive innovations in the past five years occurring in China, which are incubated by China’s government policies, business climate and internet of things infrastructure.
That enables us to tap deep into the downstream markets via digital channels, such as online portals, and into more small and mediumsized companies.
We are now closer to our customers, which helps us to meet their needs. For example, last December we launched an e-shop on Alibaba’s 1688.com e-commerce platform, to provide easy and enjoyable experiences for our local customers.
What measures should be taken if the country wants to further open up to the outside world?
President Xi Jinping made two important remarks in Davos in January 2017 and at Boao Forum for Asia in April 2018, pledging China’s continuous strong commitment to opening-up.
We have seen specific actions by the government to bring down market access barriers, including allowing foreign companies to fully own ethylene crackers in China.
There have also been many substantial changes in the foreign investment related laws and regulations, Patent Law and many other regulations to protect existing investments in China. These are all positive and confidencebuilding moves.
We are looking forward to working with the government to further improve the business environment for all companies, regardless of where the investment is from, local or overseas.