One on One With Andrew Liveris, chairman and CEO of Dow Chemical
Tuesday, July 25, 2006
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SUSIE GHARIB: At the United Nations today, the CEO of Dow Chemical was talking about water. He said Dow Chemical is working on new technologies for creating safe drinking water for millions of people around the world. Joining us now, Andrew Liveris, chairman and CEO of Dow Chemical. Mr. Liveris, welcome to NIGHTLY BUSINESS REPORT.
ANDREW LIVERIS, CHAIRMAN & CEO, DOW CHEMICAL: Thank you Susie.
GHARIB: Why don`t we begin by you telling us why are you making clean water a priority at Dow Chemical?
LIVERIS: Well, we as you already said, we have a business that markets technologies and in fact we`ve had this business for over a decade but the business case of sustainability and sustainable development bringing issues like energy efficiency, clean water, sanitation, food safety and supply and better housing for the world`s population is something we`ve committed ourselves for the year 2015, Susie. We believe it`s a business case. We can deliver new technologies for profit, at the same time deliver solution, affordable solutions to the world`s needy.
GHARIB: Well, is this problem solvable? You speak of solutions. Is it solvable?
LIVERIS: Well, you could go to our climates and speak about desalination today, affordable desalination using advanced technologies. You could go to climates which are tropical and have bacteria and viruses and other contaminants in water streams and there are affordable solutions available today. The next five to 10 years with research dollars focused on this topic. We believe we can bring affordable solutions to the marketplace. This announcement today at the United Nations was focusing in on the 1.2 billion people that don`t have affordable solutions and you can bring low tech solutions to the table like PVC pipes from river systems 12 miles away. We`re sponsoring an awareness of this issue next year with a Blue Planet Run (ph) Foundation in concert with the United Nations to bring money to the table from other companies and other governments so the world`s poor can get access to even low tech solutions.
GHARIB: Let me switch to another natural resource. Your company is a big user of oil and natural gas. What`s the impact of high prices on your business?
LIVERIS: A global oil price that is high and of course we have that today is something we`ve been living with for some years now. Obviously, it`s been getting higher and higher with all sorts of premiums based on terrorism, etc. As much of a concern for us though is the natural gas issue and in the United States we have a peculiar situation to deal with supply of natural gas being limited and in fact being used in electricity generation. So a high oil price alone doesn`t actually create issues for us, but a high oil price and a high natural gas price in the United States is a double whammy and I think ultimately solutions such as more offshore drilling for natural gas, more LNG terminals, better conservation measures will make a difference. If oil price goes way too high, I do think all bets are off though, Susie.
GHARIB: I understand that Dow Chemical`s reporting its earnings on Thursday. We heard today from Dupont saying that its quarterly numbers were impacted by high raw material costs and also bad weather that impacted its agricultural chemicals. Are these -- is Dow Chemical also impacted by some of these same head winds?
LIVERIS: Well, you know, I won`t speak about the short term for obvious reasons. But using your term head winds, I would tell you that in 2002, our hydrocarbon and energy bill was $8 billion a year. In 2005, it was $22 billion. Obviously a continuation of that rising energy cost is a head wind that we have overcome only by raising our prices, better managing our plants and in fact taking and shutting down some assets. Those are continuing head winds that plague all users of energy, notably chemical companies like ourselves.
GHARIB: All right. Well, we really are happy that you came on our program to talk about this and hope you come back. Thank you so much. LIVERIS: Thank you very much.
GHARIB: We have been speaking with Andrew Liveris, chairman and CEO of Dow Chemical.
