PU Comments from Dow Investors Call

James R. Fitterling – The Dow Chemical Co.

In Polyurethanes, we achieved record volume on double-digit gains in specialty polyols and systems houses, led by growth in EMEA and Asia-Pacific.

Aleksey Yefremov – Nomura Securities International, Inc.

Good morning. Thank you. Should Sadara start-up costs go away when all the units start up or will they represent some kind of fixed cost on a go-forward basis? And also in the short run, do you expect in the fourth quarter the net contribution from Sadara to be in that positive between the start-up costs and increased earnings from polyethylene units?

Andrew N. Liveris – The Dow Chemical Co.

Go ahead, Jim.

James R. Fitterling – The Dow Chemical Co.

Yeah. So on Sadara start-up costs, right now we’re in the EO and derivatives and getting ready for the isocyanates block, which is nine integrated units in that block to start up. And that’ll be first quarter, second quarter, third quarter types of timing for those things. So you expect to see that through next year and that’s a significant number of units. And then once you get to 2018, you’ll see those start-up costs go away and we’ll be back to having the full units up and operational.

And, at the same time, on the ground in Sadara within the joint venture, they’re working hard to get their cost positions where it needs to be and get their comps where they need to be to be competitive as a JV in their own right. So I think both of those things are going to have an impact in 2018. Howard has said we expect plastics to show some positive next year. We expect it still to be a headwind in Industrial Solutions and Performance Materials, but we’re working through all that right now.

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