In Emerging Markets, Dow Experiments with Business Models

Lease-to-own water purification

The technology exists. It's just a matter of figuring out ways to get it into the market.

That's a refrain you often hear from solar developers and smart grid vendors, but it is even a more acute issue in emerging nations. To get around that problem, Dow Chemical has been forming alliances with government agencies, NGOs, and others to try to develop new types of enterprises that can, ideally, allow proliferation to happen, according to Neil Hawkins, vice president of sustainability and environment, health and safety at Dow.

Is the effort self-interested? Sure. Dow is one of the largest manufacturers of chemicals and materials in the world and it -- along with rivals like DuPont -- has launched a broad push into materials for solar panels, desalination, batteries, electric transportation and other green markets. Still, if prices can be brought down and business models created, it's easy to see that billions of people will experience a better lifestyle as a result of these efforts.

Take water purification, for example. Dow has invested in Water Health International, which installs community water purification systems in places like India. Although small-scale water purification systems exist, most remain large-scale, capital-intensive projects. Instead of erecting and owning the water system itself, WHI builds it, but then sells it to the local community under a seven-year loan. Local workers are also trained in how to operate the system.

"People know how to clean water. That's not the problem. The challenge is coming up with a business model," Hawkins said. "This is where the real opportunity lies."

In Brazil, the company is working with the Nature Conservancy on a project to quantify the carbon sequestration abilities of a newly planted forest at a reservoir near Sao Paolo. If sequestration can be measured more accurately, it will potentially pave the way for more transparency in carbon credits.

In China, Dow is working with the Ministry of Environmental Protection on emergency environmental preparedness.