Horgen, Switzerland - July 10, 2008

Dow Europe GmbH announced that it will discontinue market index formula pricing in future contracts for all grades of its low-density polyethylene (LDPE), linear low-density polyethylene (LLDPE), high-density polyethylene (HDPE), polypropylene, polystyrene, ABS and SAN resins in Europe, India, Middle East and Africa.

“The current pace of feedstock cost increases is impacting Dow, its customers and their customers in a profound way. We simply cannot afford to absorb these cost increases anymore and need more latitude to quickly set prices according to volatile market conditions,” said Isidro Quiroga, commercial vice president, Dow Basic Plastics for Europe, India, Middle East and Africa. “Of course, while there are some things we cannot control, such as feedstock costs, we are doing everything we can to reduce our own costs through strict financial discipline. These steps include continued efforts to secure access to lower-cost feedstocks, exploring renewable and alternative fuel sources, continuing internal cost control measures, and being aggressive on energy conservation and efficiency.”

Quiroga added: “Dow is taking this action as part of a series of measures to begin to partly restore eroding margins in the face of unprecedented and unforeseen increases in feedstock costs. Discontinuing market index formula pricing will give us more flexibility to combat the volatility of these costs, which are impossible for us to avoid because of the current volatile high feedstock environment.”

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For Editorial Information:

Tania Cook
Dow Europe GmbH
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