The Dow Chemical Company today announced its strategy to use biotechnology as a key platform to accelerate Dow's growth. The company plans to implement this strategy by leveraging existing capabilities and creating new strengths for Dow.

"We are pursuing long-term, value-added growth opportunities through biotechnology," said
William S. Stavropoulos, Dow President and CEO.

Dow is making significant investments in biotechnology to provide the company with core enabling technology, fund projects in functional genomics, extend an external network for acquiring technology and capture value.

To enhance core enabling technology, Dow AgroSciences LLC, a wholly owned subsidiary of The
Dow Chemical Company, continues its internal buildup of research and development capabilities
related to biotechnology. Dow Chemical is supporting Dow AgroSciences' research with its core
capabilities in analytical and materials sciences, biocatalysis, process research and information
technology. Through Dow's involvement with Mycogen Corporation, the company has access to a
significant library of gene technology coupled with the ability to put genes in plants.

Dow's functional genomics initiative provides the company with a leading gene discovery
capability. Through Dow's alliance with Biosource Technologies, Inc., of Vacaville, Calif., the
company will be able to identify and patent novel genes for industrial and agricultural biotechnology.

"Finding novel genes rapidly is critical in this industry and current genomic technologies are
generally indirect and slow," said Fernand Kaufmann, Dow vice president and biotechnology
platform leader. "Although conventional technology has made great strides in recent years,
Biosource's gene identification technology will outpace conventional genomics research by an
order of magnitude."

Dow is also building a unique data base to assemble the massive amount of data generated in
genomics research. With this data base, Dow will be able to leverage its high-speed data analysis as well as applications development expertise and apply it to creating new products.

"We're also acquiring technology through an external network that includes our research and
marketing alliances with Performance Plants and SemBioSys," Kaufmann said. Other alliances
include the Plant Biotech Institute at the University of Saskatchewan and, through Mycogen,
collaborations with Rhone-Poulenc and Pioneer.

"The goal of our biotechnology activity is to capture value for Dow and its shareholders,"
Stavropoulos said. "We'll do that through seed sales, trait marketing and value-added grain
alliances."

Dow's investment in leading seed companies around the world includes Mycogen Seeds (North
America), Morgan Seeds (Argentina), Dinamilho (Brazil), Verneuil Semences (Europe) and
Phytogen (U.S.).

Dow AgroSciences has formed a new company, Advanced AgriTraits LLC, to serve as a
clearinghouse for companies seeking to bolster their biotechnology offerings via strategic alliances and/or licensing arrangements for genetic traits, germplasm and other biotech capabilities. Illinois Foundation Seeds, Inc. has indicated in a letter of intent with Dow AgroSciences that it plans to license to Advanced AgriTraits rights to a substantial portion of its portfolio of proprietary germplasm.

Dow has also created value-added grain alliances with food processors and marketers. "To capture greater value from our development of seeds with improved quality traits, our approach is to form alliances with companies rather than acquire assets," said John L. Hagaman, Dow AgroSciences president and CEO. "Two current projects involve growing canola and sunflowers for retail vegetable oil producers in cooperation with grain handlers and oil seed crushers."

In biotechnology, Dow AgroSciences has more than 20 projects expected to contribute significant
sales between now and 2005," Hagaman added.

Dow Chemical plans to develop industrial applications for biotechnology that include making
chemicals and plastics highly cost effective with unique functionality. "Our experience with Cargill
Dow Polymers demonstrates that these materials can compete against traditional materials and
even create entire new market segments," Kaufmann added. "The power of biotechnology coupled
with Dow's broad capability in industrial markets opens a wide array of growth options for us."

Stavropoulos said, "Biotechnology is evolving rapidly and you will see us continue to enhance our
assets and capabilities. This is a young science, still in its infancy. It will involve constant change. There will be many ways to compete. We plan to take a leading role in this challenging and rewarding area."

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