The Dow Chemical Company (DOW) is the largest producer of plastics and second leading chemical company in the world. The vertically integrated operations of the company lower costs. There are significant operational synergies between the basics and the performance segments.

More than 2,500 of the company’s downstream products are created from raw materials produced in Dow plants across the world. Financials are solid. Stronger demand in Europe, Asia Pacific, Latin America, India, Middle East and Africa has more than offset the continued economic slowdown in North America.

Moreover, price gains have largely offset significant increases in feedstock and energy costs. Dow’s merger with Rohm and Haas (ROH) will further consolidate its higher-margin and higher-growth specialty businesses and reduce the volatility in earnings and cash flow.

However, high raw material costs have forced the company to temporarily idle or reduce production at several of its plants. Further, DOW has