Dow, Texhong Partner To Develop New Fabrics With XLA®

The Dow Chemical Co., Midland, Mich., through its China-based Dow Chemical (China) Investment Co.
Ltd., and Hong Kong-based Texhong Textile Group Ltd. have signed a letter of intent to partner in
the development of new products using Dow’s XLA® elastic fiber technology and Texhong’s core-spun
yarn and cotton textile capabilities.

Texhong already is producing cotton core-spun yarns that contain XLA, which Dow introduced in
China in 2004, according to Texhong Chairman Hong Tianzhu. “[T]he product received overwhelming
market response,” he said. “In addition, with Dow’s highly efficient sales and marketing strategy
and unrivaled brand awareness and strong clientele in the international fashion market, Texhong
will benefit from this in promoting its XLA core-spun yarn and XLA elastic fiber to global textile
purchasing channels. It will further extend Texhong’s distribution channels and benefit its
long-term growth.”

Under the partnership, Dow will develop new XLA products with which Texhong will conduct
spinning trials. Dow also will provide training to Texhong staff, and both companies will exchange
expertise in their respective technologies. In addition, Texhong will develop new applications for
XLA, ramp up its production and promote XLA in the core-spun elastic yarn textile market.

September/October 2006