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The Dow Chemical Company Sadara Spotlight: Site and Enterprise Readiness

Hosted by The Dow Chemical Company and Sadara Chemical Company

March 20, 2014

Agenda

2

Building the Enterprise

Building the Site

Marketing and Selling Sadara’s Products

Highly Competitive and Profitable Investment

2

3

Birth of Sadara

DOW

Technology

Marketing & Ops Expertise

SAUDI ARAMCO

Feedstocks

Mega-Project Expertise

4

Sadara – Key Project Milestones

2011

Q3 Q4

Board

Authorization

JV Formation

Construction

Begins

2012

Q3 Q4

100% of EPC

Contracts

Awarded

Marketing &

Sales

Agreement

2013

Q2

Financial

Close

2014 2015

First Plant RTO

First Product

2016

Full

Production

COMPLETED

5

Sadara’s Priorities

Financing

Staffing

Building

Preparing to operate

6

Sponsors Facilitated Sadara’s Funding

Diversified Funding

Saudi Funding Sources $4.4B ECAs

$7B

International Banks

$1.1B 65% Debt ~$12.5B

35% Equity ~$6.8B

Sadara’s Debt / Equity

-

5

10

15

20

$B

35% Equity ~$6.8B

65% Debt ~$12.5B

7

Sadara’s Priorities

Financing

Staffing

Building

Preparing to operate

8

Sadara – Staffing Levels

356

2018

3869 3862

3444

0

1000

2000

3000

4000

2012 2013 2014 2015 2016

Number of Sadara Employees:

9

In Kingdom On the Job Training

Riyadh Refinery

SAMREF

Yanbu Refinery

Jeddah Refinery

Shedgum

Juaymah NGL Ras Tanura

Berri

Abqaiq

SASREF

Haradh

Khursaniyah

Hawiyah

Uthmaniyah Yanbu NGL

Over 900 Trainees in various Saudi Aramco Facilities

10

Out of Kingdom On the Job Training

Over 800 Trainees in various Dow and Dow JV Facilities

Fort Saskatchewan

Midland

Seadrift

Freeport St. Charles

Plaquemine

Estarejja

Terneuzen Stade DCG

Kuwait

Map Ta Phut

UHDE China

11

Sadara’s Priorities

Financing

Staffing

Building

Preparing to operate

12

Building

Sadara Enterprise

Sadara Complex

PlasChem Park

On Schedule. On Budget. Very Safely.

13

Sadara – A Game Changer

Specialty Films

Household Products

PU Systems

Adhesives/Sealants

Paints & Coatings

Laminates

Oil & Gas Chemicals

Detergents

Water Treatment

Cables

Construction Material

Misc Compounding

Furniture/Insulation

Automotive Fluids

Auto Components

Co

nve

rsio

n P

ark

Products

Ch

em

ica

l P

ark

Intermediates Raff-1

Pygas

Pyoil

Ethane

Naphtha

Polyols

PE/Elastomers

Isocyanates

Propylene Glycol Amines Glycol Ethers

EO/PO

Market Segments

Sa

da

ra PlasChem Park

14

PlasChem Site & Layout

Sadara

Park

Chemical Park

Conversion Park

N Chemical

Park

Reactive Chemical Industries

PlasChem

Downstream Industries • Formulators • Plastic

Converters

15

Sadara’s Priorities

Financing

Staffing

Building

Preparing to Operate

16

Sequencing of Site Start-Up

Phased Start-up Sequence Lowers Risk and Increases Operational Success

Ethylene and Polyethylene

EO / PO Envelope

Polyols, Isocyanates, etc.

2015

17

Preparing to Operate

Transitioning from program to enterprise

Ensuring supply chain readiness

Implementing marketing & sales strategy

Commissioning utilities and third party facilities

18

Collaborating at Unprecedented Levels

Sadara

JCP (Solids Ports) N

Note: Map is illustrative and not to scale

SAAC

KFIP (Liquids Ports)

SASREF

SATORP

Saudi Kayan

SChem

NIGC (Gas) Ar Razi

19

Collaborating at Unprecedented Levels

SEC Electrical Power

Marafiq Industrial Water

Waste Water

Saudi Aramco/Affiliate Benzene &

Toluene

NIGC (GAS) Oxygen,

HP N2 & LP N2

Linde Hydrogen,

CO & Ammonia

JV with Tasnee & Saudi Kayan

Butanol

Ar Razi Methanol

SASREF Naphtha

JV with Solvay Hydrogen Peroxide

Enhanced Jubail Pipeline Networks

20

Enterprise Summary

Leveraging on unparalleled strengths of sponsors

Implementing aggressive human capital development program

Securing captive off-takers in PlasChem Park

Creating value and strengthening reliability through collaboration

and partnerships

Progressing on schedule, on budget and very safely

Agenda

21

Building the Enterprise

Building the Site

Marketing and Selling Sadara’s Products

Highly Competitive and Profitable Investment

21

Project Scope for Sadara

22

The largest chemical complex ever built at one time

Build 26 process plants plus third parties

Produce 3 million tons of products per year

Introduce specialty chemical products for the first time in

the Kingdom

Generate $6 - $8B revenue annually

Support PlasChem customers

22

Jubail’s World Class Infrastructure

23 23

Solids PortSolids Port

Liquids PortLiquids Port

Residential CommunityResidential Community

Potential Site LocationPotential Site Location

Some of the names already in Jubail

Some of the names already in Jubail

Some of the names behind the names

Some of the names behind the names

Many companies have already invested in Jubail; however, the IK based company names may not be readily recognizable.Many companies have already invested in Jubail; however, the IK based company names may not be readily recognizable.

NorthNorth

SASREFSASREF

SATORPSATORP

Saudi Saudi KayanKayan

SipchemSipchem

SATORPSATORP

SASREFSASREF

SabicSabic

PetrokemyaPetrokemya

PetrokemyaPetrokemya

Solids Port

Liquids Port

Residential Community

Sadara Site

Location

Jubail Industrial

City II Jubail

Industrial City

Enough to build 1.5 Golden Gate bridges

Sadara Quantified

24

Enough to build two causeways to Bahrain

Sadara Quantified

25

Enough to build two lines from Jubail to Jeddah

Sadara Quantified

26

Enough to link Jubail with London

Sadara Quantified

27

Mixed Feed

Cracker

Plastics

PO & Derivatives (Propylene Oxide)

EO & Derivatives (Ethylene Oxide)

Isocyanates

C5+Naphtha

Ethane

Benzene

Toluene

Ethylene

Propylene

Benzene

Toluene TDI

PMDI

Butyl Glycol Ethers (BGE)

Amines (EOA and EAE)

C4s

Pygas

Solution PE Train 1

Solution PE Train 2

HP-LDPE Train 3

Elastomers Train 4

C8+

Polyols

Propylene Glycol (PG) C5s

Cust

om

ers

& P

lasC

hem

Park

Configuration

Aromatics Hydrogenation & Extraction

28

29

Construction: On Track and On Budget

30

Construction: On Track and On Budget

Utilities

68% Construction

31

Construction: On Track and On Budget

Cracker

68% Construction

32

Construction: On Track and On Budget

Polyethylene

68% Construction

33

Construction: On Track and On Budget

Isocyanates

48% Construction

34

Construction: On Track and On Budget

Import / Export

Facilities

40% Construction

In Kingdom Content

35

Awarded $5.3 billion in In Kingdom contracts

Awarded $700 million to local manufacturers

Established first time manufacturing

− Emerson – Control Valves

− Rosemount – Transmitters

− Kubota Radiant Coils

Expanded manufacturing for:

− Cable Tray (Enduro and Al-Abdulkarim Holdings)

− Fiberglass (Future Pipe)

− Electric Motors (TECO Westinghouse)

− Cooling Tower Assem. and Finishing (SPIG SpA)

35

Execution Excellence

36

Results

• Maintain schedule

• Optimal cost

• Quality execution

• Long-term operational efficiency

• Long-term profitability

Detailed front end engineering & design

Innovative contracting and procurement strategy

Overarching program governance

Strategic project staffing

Market knowledge

• Strategic partnership

• Execution expertise

• Marketing & Sales

Best in Class Safety Performance

37 37

Reco

rda

ble

Cases

0.00

0.05

0.10

0.15

0.20

0.25

0.30 Ja

n-1

3

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

De

c-1

3

Tota

l Re

cord

able

Inci

de

nt

Rat

e

Threshold 0.20

Meets Target 0.16

Far Exceeds 0.12

2013 Aramco Goal 0.28

Overall Program Progress

38 38

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Actual Construction % Actual Enggineering Actual Engineering

46%

98%

Summary of Program Update

39

Safety initiatives are delivering best in class results

Closely monitoring quality and achieving targets

Construction mobilization continues: 48,000+

Program is on schedule

Delivering within the budget

39

Agenda

40

Building the Enterprise

Building the Site

Marketing and Selling Sadara’s Products

Highly Competitive and Profitable Investment

40

Enabling Sadara Success through Dow’s Expertise

Marketing & Sales

Dow’s Expected

Regional Volume Split

Asia Pacific: ~60%

Middle East & Africa: ~15%

Europe: ~15%

Other: ~10%

• Flexible, robust marketing plan

• Generating customer excitement

o 70% of plastics capacity o Pre-marketing activity

• Organization design underway

o Commercial structures o Leveraged and dedicated

resources

• Supply chain infrastructure

o Global design complete

41

Sponsor Strengths >> Design & Construction >> Go To Market

INFUSING VALUE ACROSS ALL FRONTS

Asia Pacific Prepares for Sadara Volume

Topsafe terminal in Dongguan

Sinotrans warehouse in Shanghai

Westports terminal in Malaysia

Superior logistics arrangement and consistent supply enable Dow to be a better solution and product provider

42

Strong Geographic Growth

43

Performance Plastics Franchise Targets Growth Opportunities in Low Share Regions

2018 2012

13% 13%

Share of Demand

Western Europe

2018 2012

4% 2%

Share of Demand

China

2018 2012

5% 2%

Share of Demand

2018 2012

5% 3%

Share of Demand

Rest of Asia

Eastern Europe

2018 2012

5%

Share of Demand

MEAF

2018 2012

2% <1%

Share of Demand

Antwerp

Warsaw Moscow

Gebze Sadara

Dubai

Durban

Nhava Sheva

Singapore

Shanghai

Tianjin

India

Dow Sadara

6%

44

Performance Materials Growth Opportunities

Amines, Butyl Glycol Ethers

• Address growing demands of the Consumer, Industrial, Construction, Agriculture, Electronics and Coatings markets

• Balanced and flexible product mix to meet customer needs

• Delivers innovation by utilizing next generation reductive amination technology for amines products

Polyurethanes: MDI, TDI, Polyols

• Expands Dow’s service offering and the diverse set of polyurethane applications across Furniture and Bedding, Automotive, Transportation and Construction market segments

• Delivers differentiation and innovation

• Supports Dow’s Formulated Systems growth and customer base

Targeted growth in strategic market segments across Asia Pacific, Eastern and Central Europe, Africa, India

45

MDI: Dow’s Share of Demand Pre- and Post- Sadara

2018 2012

16% 15%

Share of Demand

Western Europe

Sadara

Eastern Europe

2018 2012

27%

Share of Demand

30%

2018 2012

6% 4%

Share of Demand

North Asia

Dow EMEA & APAC share of demand to increase from 10% in 2012 to 12% in 2018

Dow Post-Sadara

Middle East & Africa

2018 2012

15% 12%

Share of Demand

2018 2012

12% 11%

Share of Demand

Southeast Asia

46

Planning for Marketing & Sales Success

Integrated teams fully engaged for optimal collaboration

and success

Fully prepared to successfully market and sell Sadara

products upon start-up

Pre-marketing activity for all products progressing on

schedule

47

Agenda

Building the Enterprise

Building the Site

Marketing and Selling Sadara’s Products

Sadara: Enabling Dow’s Growth in Emerging Regions

48

Strong economics and financing model

Premier partnership focused on long-term growth

World-scale operations supported by strong back-integration to extensive integrated hydrocarbon infrastructure

Tailored product mix designed to target high-growth, high-margin end-markets

Uniquely located in the middle of the fastest growing regions

Sadara: Enabling Dow’s Growth in Emerging Regions Commencing a New Era of Growth

49