Dow tabs Olympics-generated business at $1 billion by 2020
August 2, 2012 11:06 AM
The U.S.-based company joined The Olympic Partner program in 2011, signing a 10-year deal valued at more than $250 million. It estimates more than $100 billion will be spent on infrastructure for the 2016 and 2020 Summer Games, and it expects to collect at least $1 billion of that spending.
“We’re well on track to that,” said George Hamilton, Dow’s vice president of Olympic operations. “The Olympics are a new market segment for Dow. London gives us the proof point to go to future host cities and say, ‘This is what we’ve done.’”
Walking across the Olympic Park earlier this week, Hamilton stopped in front of the Olympic Stadium and pointed to it as an example of what the Olympics could do for Dow and Dow could do for the Olympics.
When government austerity measures forced London organizers to find private funding for it, Dow stepped in to pay for the $10 million wrap. London organizers wanted a wrap that was more sustainable, so Dow chemists developed a new, PVC-free plastic that is more sustainable.
Dow used the same material for a massive billboard it hung on the exterior of Westfield Stratford Mall across from the Olympic Park. Hamilton said it’s the only sign in the park that is free of PVC, and he’s hopeful that Dow can sell the product to Olympic organizers at future Games who are trying to be more environmentally conscious.
“This will create future market opportunities for us in other Olympic parks and sporting venues,” Hamilton said. “There’s a real marketing opportunity beyond the Games.”
The wrap is the most visible contribution Dow made to the London Olympics, but its products are used throughout the park in insulation, roofing materials, water pipes and power-cable insulation. Its Dowlex polyethylene resin also is used in the blue turf at the field hockey venue.
“Many of the things we were providing in the park were already in play before we became a partner, but what the Olympic sponsorship allows us to do is have the rights to talk about that,” Hamilton said.
Hamilton said Dow will spend a large part of the next week talking to leaders from Sochi, Rio and Pyeongchang, which are organizing the next three Olympics. The company will be showing them its products in hopes of selling them into future venues.
Sochi and Rio, in particular, represent big opportunities for Dow. Both Russia and Brazil are growing rapidly and planning to undertake massive infrastructure projects in the coming years. Hamilton said Russia alone is expected to spend $1 trillion on infrastructure over the next 20 years.
“We’ll use the Olympics to build our relationships in Russia to leverage that for government procurement,” Hamilton said.
Dow has done hospitality at the Olympics since 1996. It has added a few programs to its hospitality for these Games, including one for future Olympic organizers.
The Olympics also offer Dow a chance to raise awareness for its brand worldwide where Hamilton said brand recognition is low. The company has spent more than 80 percent of its Olympic marketing dollars outside the U.S. The bulk of the spending was concentrated in London, Russia and Brazil.
Sponsoring the Olympics has not been without its share of challenges. In addition to trying to navigate Olympic organizing committees, Olympic development authorities and other decision makers, the company faced major public criticism in the U.K. because of the Bhopal disaster, a 1984 gas leak in India that killed and injured thousands.
Dow bought the company behind the disaster, Union Carbide, 11 years ago, and activists called on the IOC to end Dow’s sponsorship of the Olympics.
Hamilton said the company wasn’t caught off guard by the criticism and added that it hasn’t hurt Dow’s Olympic sponsorship. Instead, it’s given the company a chance to explain the facts behind its ownership of Union Carbide.
“We knew this was coming,” Hamilton said. “When I talked to other partners (before we signed our sponsorship), I was told this is a bit of a free platform, this Olympic world, for activists and others to tell their story. We expected that. I’ll be honest and tell you the level here in London was higher than we expected.”