Dow Chemical hard-headed about its Olympic ties

LONDON Thu Jul 26, 2012 9:54pm IST

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LONDON (Reuters) - While many corporate backers of the Olympics hope some of the fairy dust from the Games will rub off on their brands, Dow Chemical is taking a decidedly hard-nosed approach to its sponsorship in the face of criticism over its links with the Bhopal disaster.

"This is an investment, not a sponsorship," George Hamilton, the Dow executive in charge of its Olympic operations told Reuters in an interview as he rejected the Bhopal criticism as "inappropriate".

Dow is one of 11 international Olympic sponsors who have global marketing rights to the Games. They each pay an estimated $100 million for a four-year cycle covering a winter and summer Games.

The company signed up in July 2010 so London is its first sponsorship of any Games. The next winter Games will be held in the Russian Black Sea city of Sochi, with the next summer Games in Rio de Janeiro in 2016.

Hamilton pointed out that as the games roadshow moves on to Russia and Brazil it will take the chemicals group into high-growth markets with a need for the materials and building products that Dow makes - everything from roofing membranes to insulation and artificial playing surfaces.

Aside from the bright blue and pink surface of the hockey pitches, Dow also stepped in to provide the wrap that adorns the outside of the main Olympic stadium after the London organisers could not find the 7 million pounds to give the finishing touch to what was a rather industrial-looking stadium.

In an interview with Reuters, Hamilton said the investment in infrastructure linked purely to the summer and winter Olympic events up to 2020 is estimated at $100 billion.

Beyond that, by some measures there is an infrastructure spending need in Russia of roughly $1 trillion and in Brazil of $500 billion and Dow thinks its involvement in the Games will translate directly into winning a piece of that.

"In growth territories like Russia, using the high profile of the Olympics, it gives Dow instant awareness and reputation, not for the Olympics but for the post-Games build," he said.

"We've set an objective from a 10-year partnership of an additional $1 billion of incremental revenues. We're well on track."

The 10-year deal is a long one by sponsorship standards, especially in such uncertain economic times, but Hamilton has no doubts about the benefits.

"It's going to take that long for Dow to achieve the type of commercial returns we want for this project," he said. "We need a longer runway than a more traditional sponsor who is more business-to-consumer."

The criticism over Bhopal stems from Dow's acquisition of Union Carbide almost a decade after that company settled litigation linked to the gas leak at its Indian unit which killed and injured thousands. It is widely regarded as one of the world's worst industrial catastrophes.

"I have sympathy and empathy for the people of Bhopal," Hamilton said. "It was a horrific incident. I don't have empathy and sympathy for the activists and protesters and their attempt to tie it to Dow... Dow was not there."

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