Interview with Tim Laughlin, general manager of Dow Wire & Cable

Monday, Oct 05, 2009
TCD: What makes Dow Wire & Cable unique to the cable & wire industry?

Dow Wire & Cable (DWC) is unique because it not only has strengths derived from exceptional materials, but also from dedicated industry experts, in-house R&D and testing capabilities and the resources of the entire Dow organization at its disposal.

DWC is the longest and largest standing supplier of polyolefin products to the industry. An example is the first high voltage (HV) and extra-high voltage (EHV) cables that were made in Japan some 20 years ago that are now being tested to see how they’ve stood up over the years. In 2008, we celebrated the 25th anniversary of inground service for cables made with our medium voltage (MV) tree retardant crosslinkable polyethylene (TR-XLPE) materials. Cables showed so little wear after 25 years, that we are confident that cables made with our materials could potentially last more than 40 years.

Many of the products and technologies that exist today are Dow/Union Carbide (UCC) developed. Our strongest global competitor is heritage UCC technology and assets. As the industry has evolved, Dow has invested in assets, people, and research to develop next generation products that create value for the energy and telecommunications industries. There is no polyolefin producer with the dedicated assets and geographic space of DWC. And, as important as assets are to assure low cost, it is the people in each geographic region that drive our participation strategy and assure the diversity of thought and corresponding strategy to meet our customers’ expectations.

TCD: What targets does Dow Wire & Cable have in place to counter the current financial climate?

We are doing our best to remain firm but fair in our pricing during this challenging time. And, especially now when everyone has to watch the bottom line in the present and for the future, choosing a solution from Dow that demonstrates a lower total system cost over the lifetime of new or rehabilitated power infrastructures is just the smart thing to do.

In times like this, economic sustainability and viability is a key challenge for this industry. There are many participants within this value chain that are struggling – our competitors, some customers, end users, and certainly the general public consumer. All were hit hard due to demand destruction during the recent economic meltdown.

As the largest producer of wire and cable products and the largest producer of base polyolefins in the world, our scale and resulting cost positions have supported our continued participation in this industry. In conjunction with this effort, we continue to invest in growth as represented by our world-scale project in Saudi Arabia.

Looking back over the last 12 to 18 months, managing the cost volatility of 2008 was much more difficult than managing the demand destruction of 2009. The bottom line, DWC has managed this double blow and continues to seek a strong industry participation strategy via growth.

TCD: Do you see Dow Wire & Cable’s market base expanding into new markets in the future? i.e. opening production plants in areas such as China, West Africa, and Asia?

Yes. Dow Wire & Cable’s market base is definitely expanding. We have been strong in North America, Latin America and Japan for a number of years. We are growing stronger throughout Europe (including Eastern Europe and Russia) which is served from a state-of-the-art testing, material manufacturing and compounding operation in Central Germany.

This center currently also serves our customers in India, Middle East and Africa (IMEA). With the restructuring of Nippon Unicar (NUC), DWC has transformed this joint venture into a primary sourcing point for Asia Pacific with the highest-quality products in the world. We also have established a state-of-the-art R&D center in Shanghai, China, which is focused on several of our strategic global growth platforms. This is a great example of leveraging our diversity of culture and intellect to assure that the best minds are developing technology to meet tomorrow’s needs.

We have announced a major investment within Saudi Arabia with Aramco. The DWC investment is a significant one for our business, however it is only a small part of one of the largest petrochemical projects in the world. This once again reinforces our ability to be industry focused while leveraging the scale of the largest chemical and plastic franchise in the world. This investment is hallmarked to service the growing markets of IMEA.

TCD: Are there any new products and technology developments in the pipeline?

Yes. We are introducing our DOW ENDURANCE product family of jacketing and insulation compounds that are ideal for wet and dry design underground MV, HV and EHV cables. Cables made with these exceptional materials provide long-term reliability at a lower total system cost over the lifetime of the installation.

We also are introducing Dow Inside, a new initiative from Dow Wire & Cable that benefits cable manufacturers and utilities alike. It further reinforces Dow Wire & Cable’s commitment to the power industry providing assurance of cable reliability and long service life based on exceptional materials, dedicated R&D, deep industry knowledge and close working relationships with cable manufacturers, utilities and other power industry influencers.

TCD: Do you see Dow Wire & Cable expanding into other electrical markets?

It’s possible. With our industry knowledge and deep bench strength in R&D, there are several potential avenues where we can add value. We are always looking for new ways to match our expertise with expanding industry needs.

TCD: With climate change becoming an issue; how does Dow Wire & Cable see this affecting the energy sectors?

The energy sector will continue to be challenged to find and optimize alternative energy resources including water, wind, solar, geothermal, clean diesel, etc. This has huge implications for the cable and wire industry because no matter what energy source powers our homes and our businesses, cables will be required to deliver that power. Dow is uniquely positioned to be an invaluable resource as the energy sector evolves. Our sustainability goals not only impact our own global operations. We are proactively seeking and developing solutions that can be commercialized to benefit industries and consumers alike.

TCD: Has it been a good year for Dow Wire & Cable and are there any particular projects that reiterate the strength of the company?

In 2009, we have had to manage the demand destruction that was a result of this economic meltdown. Due to our global participation strategy and asset breadth, we have been in a position to optimize our asset utilization and minimize the volume variance impacts to the bottom line. We exercised a headcount reduction program from year-end 2008 through the second quarter of 2009.

We have managed our capital program without foregoing our absolute commitment on Environmental Health and Safety.

We have seen our feedstock hit rock bottom in the first quarter of 2009 and then increase 70 to 80%. This has required us to manage our price, but to a lesser extent than what was required with the horrendous volatility of 2008. With a backdrop of the most catastrophic, economic recalibration in many years, the business, with the support of Dow leadership, continues to invest for growth.

TCD: How does Dow Wire & Cable view on-line media, advertising and promotion and how can this help a company as big as DOW?

On-line media is certainly a growing communications tactic to reach customers and influencers all over the world and we are employing it with more frequency. The immediacy of the exposure to a global audience is a benefit, as well as the opportunities to initiate contacts and conversations.

TCD: Are there any new acquisitions that will see Dow Wire & Cable move into further sectors?

Dow Wire & Cable is always seeking appropriate opportunities to expand into other sectors, whether it’s through acquisition, joint ventures or joint development agreements. Any such relationships will be communicated when the time is right for all parties involved.

TCD: What have been the key factors behind the success of Dow Wire & Cable?

There are several:

– Commitment to the wire and cable industry

– Industry-dedicated experts

– R&D, technology capabilities, in-house testing and validation

– Resources of the entire Dow Chemical Company

– Exceptional materials manufactured under optimum conditions in regions close to our customers

TCD: Are there any other recent developments by Dow Wire & Cable that our readers should be interested in?

We’ve touched on the highlights, especially the introduction of Dow Inside and DOW ENDURANCE. There will be more developments in the coming months and years. Stayed tuned!