Dow Chemical CEO: The change of old and new Dow after the merger of the century

"What else did I miss?"
Jim Fitterling explained to reporters the full plan to split Dow and DuPont into three separate companies, writing on white paper about the different businesses involved in the deal.
clearly, the merger split is complex. Towards the end of the presentation, the dow chemical chief executive had to pause for an assistant's tip to
China
. But he quickly recalled which business he had just missed.
, 57, became the new Dow's chief executive in March last year. His priority is to separate the company from Dow DuPont, a temporary complex, as planned, and go public independently in April.
the end of 2015, Dow and DuPont announced a merger, renaming the company Dow DuPont, and decided to spin it off into three separate publicly traded companies in agriculture, specialty products and chemical materials.
DuPont and Dow will retain their original company names after being decoupled from Dow DuPont under the spin-off plan, but the business system is very different, with the former focusing on specialty products and the latter focusing on materials science.
the start of the new year, Mr. Fettering is scheduled to make his first overseas visit to China, Dow's second-largest market in the world. One of the tasks of his trip was to answer questions from the Chinese media about the new company.
joined Dow in 1984, and three years ago, after Dow merged with DuPont, he moved into a new company.
Dow and DuPont were founded in 1897 and 1802, respectively, and the merger spawned a chemical giant with a market capitalisation of about $130 billion, the largest industrial merger in the history of the year. Last year, Dow DuPont ranked 147th in the Fortune 500.
first served as chief operating officer of Dow DuPont's materials segment and then as chief executive of Dow. During his more than 30-year career at Dow, he has experienced a number of business restructurings, but those are not as good as what is happening.
asked if he liked the uphealy changing events of the past three years, Mr. Fettering gave a positive answer. He pointed to the positive side of the deal, which saw Dow and DuPont have their own business advantages before the merger, giving them a chance to gain further promotion. In Mr. Fittering's view, this is the primary reason the two companies chose to merge.
the most significant change from the combined business restructuring was the birth of a new agro-chemical company, named Cody Hua, a combination of Dow and DuPont's agricultural sectors.
after consolidating the seed and crop protection businesses owned by Dow and DuPont, Cody Hua is positioned as the world's first tier player in the agro-chemical industry, with annual revenues of about $15 billion.
Dow and DuPont will also adjust their business maps.
DuPont will take over Dow's water treatment, electronic materials and food nutrition businesses, while plastic packaging, which was originally owned by DuPont, will be transferred to Dow.
This move, The new Dow, led by Mr. Fettering, has three pillars: packaging and specialty plastics, industrial intermediates and buildings, and high-performance materials and coatings, while the company's products cover plastics, polyurethanes, silicones, and more.
Jim Fitterling, pictured: Dow Chemical website
The new Dow will be the largest of the three spin-offs, but both revenue and staff size will be smaller than before the merger. Under the current business framework, Dow's revenue for 2017 was $44.8 billion, down 19 percent from the previous year. The company employs 37,000 people, about two-thirds of its pre-deal workforce.
If the Dow-DuPont merger is meant to be a strong alliance, the subsequent spin-off is intended to make the company more focused, reflecting to a large extent the demands of capital markets, particularly activist investors. Activist investors such as Trian Fund and Third Point LLC are key pushers for the dow and DuPont mergers.
said activist investors are hoping for better returns on corporate dividends and share price performance. They also require companies to focus more on their main business, rational planning of investment plans, in order to maintain market leadership on the basis of minimizing operating costs.
investor conference in November, Mr. Fettering announced that Dow would be a company with a particular focus on cash returns, raising shareholder dividends and implementing share buybacks. Sixty-five per cent of the company's annual net profit will be used for both schemes, which is clearly a happy development for capital markets.
new Dow is currently in the business development stage, but also to Providen's idea to provide a practical basis. Over the next few years, New Dow's capital spending will shrink by 30 percent to $2.8 billion from $4 billion a year previously, as two of its large upstream chemical projects in the U.S. Gulf of Mexico and Saudi Arabia were fully completed and put into operation last year.
Said that in the future, the company will focus more on investments downstream of the industry chain, and that the basic materials produced by two large chemical projects in the U.S. and Saudi Arabia will be converted into higher-value products for manufacturers of end-use consumer goods such as automobiles, mobile phones and skin care products.
this strategy will also be applied to China, where New Dow is building a new silicone resin plant in Zhangjiagang, Jiangsu Province, which can be used as raw materials for beauty, care and other products, and will start production in 2021.
after the agro-sector divestiture, New Dow will not have to bear the high cost of research and development. Of Dow's $1.7 billion in research and development spending each year, $700 million is spent on the agricultural sector, and about $900 million is spent on chemical materials.
plans, New Dow's annual research and development spending as a percentage of operating income will not be higher than 2%, down from 2.9% previously. At $50bn in revenue, Mr. Fitterin said, $1 billion would be spent on research and development of chemical materials, a figure no less than in the past.
before Mr. Fitzling put the new Dow plan into practice, he faced a number of tedious efforts, such as a real break-up of the company in the legal and tax sense, as well as regulatory filings for listings.
if all goes well, three months from now, New Dow will be back on the market, which is destined to be very different from the company that used "DOW" as its stock code name.