Dow Chemical CEO Letter To Shareholders

I will have more on this next week. Here is the summary from the DOW website.

MIDLAND, Mich., March 23 /PRNewswire-FirstCall/ — In his annual letter to shareholders, Andrew Liveris, chairman and chief executive officer of The Dow Chemical Company, summed up 2006 as “a very good year.” And he underscored the Company’s commitment to a transformational growth strategy, focused on reshaping its integrated business portfolio in order to enhance its earnings profile.

In his letter, headlined ‘Strong today. Stronger tomorrow’, Liveris said: “Although our 2006 performance represents an important milestone for our Company, we believe 2007 will be even more significant.”

In 2006, Dow reported record sales of $49 billion, the second highest earnings in the company’s history, a 12% increase in the dividend, the repurchase of more than 18 million shares and the approval of an additional $2 billion in share buy-backs.

Commenting on Dow’s future, Liveris said: “We have the right strategy. We are implementing it with discipline and speed, and our initial results are showing great promise. Going forward, shareholders can expect more innovation, more market-facing businesses, more asset-light joint ventures, continued financial strength and flexibility, and a higher ratio of Performance businesses.”

Liveris also wrote of how Dow delivered against the strategy it laid out a year ago, “Early in 2006, we put some public stakes in the ground regarding our future plans. We said then that we would remain a diversified, integrated, global company, and we think our 2006 results bear out the wisdom of that statement. We said that we would take action to strengthen our franchise Basics businesses and grow through joint ventures, not only building new plants with JV partners, but in some cases, placing our existing assets into JVs-similar to what we did in 2004 with ethylene glycol and the formation of MEGlobal. We call this our “asset light” strategy, and we have made substantial progress in this area.”

Looking toward 2007, Liveris highlighted the Company’s key initiatives related to technological innovation, environmental sustainability and joint venture partnerships.

“With the Basics portfolio, as with our Performance portfolio, we will continue to take aggressive action throughout 2007, including new business models that will make our Basics portfolio more ‘asset light’ and more competitive for the long term,” said Liveris.

“Dow has a long history of innovation … we are funding more than 600 projects that either strengthen our position in key franchises or break into entirely new areas of technology,” said Liveris. “We will continue to invest in the technologies, businesses, regions and markets that are the most promising; prune non-strategic businesses and non-competitive assets; and keep ongoing costs under control.”

Liveris also discussed the Company’s launch of its 2015 Sustainability Goals that commit Dow to addressing humanity’s most pressing environmental problems including: access to clean water, shelter and health care, climate change, and reducing greenhouse gases.

“I made a public commitment at the United Nations’ headquarters in New York City that our Company would apply the full power of its technology- including three major breakthroughs during the 10 years of the program-as well as dedicate our philanthropy and volunteerism to help solve these and other challenges.”

Liveris’s letter was issued today as part of Dow’s 2006 10-K and Stockholder Summary, which has been mailed to all Dow stockholders along with the 2006 Corporate Report and Dow’s 2007 Proxy Statement. Copies of all three documents are available on Dow’s website at http://www.dowannualreport.com/.