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11‐14April2016

Positioning forGrowth

IISN: 1932-9581 © 2016 International Institute of Synthetic Rubber Producers, Inc. (IISRP) www.iisrp.com

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TableofContents

2016 IISRP General Award James L. McGraw ………………………………………………………………………………… 1 Acceptance Speech ……………………………………………………………..………………… 2

2016 IISRP Technical Award Guy Wouters ..……………………………………………………………………………………. 4 Acceptance Speech ……………………………………………………………..………………… 5

Speakers Program Bios – Wednesday, 22 April Moderator: Terrie Portmann, HollyFrontier............................................ 7 Keynote Speaker Bill Kopicki ............................................ 7

Tokesha Collins‐Wright, Kean Miller LLP ………………………………………………………………. 8

Michael Weidokal, ISA ……………………………………………………….. 8 Roxanna Petrovic, IISRP ………………………………………………………………….. 9 Rob Simmons, LMC …………………………………………………….. 9

George Schlager, LIST .................................................... 10

Speakers Program Bios – Thursday, 23 April Wayne Stair, Americas Int. ……….……………………………………………… 10 Steve Charles, Bridgestone Americas ……………………………………………………………………. 11 Matt Croson, ASC …………………………………………………. 11

John Soltesz, GE …………………………………………………………….. 12 Bill Hyde, IHS .................. 12

Dan Lippe, Petral Consulting ………………………………………….. 12

Paul Brisson, Argus DeWitt............................................... 13

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SpeakersPresentations:Wednesday,13April................14 Bill Kopicki,GM “Innovation‐Transforming the Automotive Industry”............................... 14 Tokesha Collins‐Wright, Kean Miller LLP "Ozone at 70ppb (and Lower): Challenges and Opportunities for the Synthetic Rubber Industry” ...... 20 Michael Weidokal, ISA “The Outlook for China and India”..................................................... 32

Roxanna Petrovic, IISRP “Synthetic Rubber Overview”............................................................... 54 Rob Simmons, LMC “The Outlook for Natural Rubber: A Prolonged Glut?”................................ 76

George Schlager, LIST “New Rubber Devolatilization (Direct Desolventizing) Opportunities Enabled by Unconventional Technology”.......................................... 92

SpeakersPresentations:Thursday,14April......................102

Steve Charles, Bridgestone Americas “Future Mobility Impact on the Tire and Rubber Industry”................................ 102

Matt Croson, ASC "Synthetic Rubber Opportunities in Adhesives and Sealants".............................. 110 John Soltesz, GE “Under Pressure: The Impact of Oil Prices, Technology, the Job Market and Millenials on the Global Economy”................................. 120

Bill Hyde, IHS "Trends in Global Ethylene Markets ".............................. 145 Dan Lippe, Petral Consulting "Ethylene Feedstocks".............................. 153 Paul Brisson, Argus DeWitt "Butadiene Outlook for 2016".............................. 164

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2015‐2016 PRESIDENT‐INTERNATIONAL Gregory Nelson, East West Copolymers ……………………………………………………………………………… 173 Remarks: ........................................................ 2016‐2017 PRESIDENT‐INTERNATIONAL Hendrick Lam, TSRC ……………………………………………………………………………… 174 Attendees Business Program ………………………………………………………………………………… 175 Spouse/Guests ……………………………………………………………………………………. 178

2016 IISRP GENERAL AWARD James L. McGraw

Jim McGraw has served the International Institute of Synthetic Rubber Producers, Inc. (IISRP) for 36 years, both as an IISRP chair and active committee member while employed by American Synthetic Rubber Corporation (ASRC) and subsequently as both Deputy and as Managing Director and CEO for over 17 years. He has instituted many programs to enhance member services and administrative effectiveness. Moreover he has provided high energy and effective leadership in protecting the worldwide industry from regulatory assaults. Jim's multiple achievements in moving the Institute forward since 1979 is unmatched by any other IISRP current or past leader. Jim began his 40 year career in 1975 in Louisville as an ASRC engineer over the plant-wide utilities system. In this role he became lead engineer for a major regulatory compliance project which led to his long-term leadership in synthetic rubber regulatory management. During his 23 years at ASRC Jim held various assignments all of which included compliance management. In 1979 he became ASRC’s representative to the newly formed IISRP Americas Section Environmental Health Committee which he later chaired for more than eight years. He also served on IISRP’s Epidemiology Steering Committee and was ASRC's Technical Committee Alternate. From 1984 to 1997 Jim was ASRC’s Director of Human Resources and Regulatory Affairs. In 1997 Jim became IISRP's Deputy Managing Director and was elected the Managing Director and CEO in October 1999. He began his transition into retirement in 2015 and now is an advisor to the IISRP Executive Committee. His publications include numerous proceedings of the IISRP’s annual general meetings and scientific proceedings of IISRP Symposia. Jim has been recognized for the “Best Paper of the Year Award” by the Southern Rubber Group of the ACS Rubber Division. He has also been a keynote speaker at many industry international conferences during his career, all in furthering IISRP's members businesses. Jim holds a 1975 BS in Mechanical Engineering Technology from Purdue University and a 1985 MS in Engineering Management from the University of Louisville.

IISRP's 57th AGM-New Orleans 1

2016 General Award Acceptance Speech James L. McGraw

Thank you Juan Ramon for the presentation and to you Greg for the well stated Citation. This is a bit awkward as I have had the honor of presenting these prestigious Awards for some 17 years and now to be on the receiving end… well to state the obvious, this is the most rewarding experience I have had in my career. I am deeply grateful to Hend rick Lam of TSRC for his nomination and from what I understand the overwhelming support from the Board of Directors. As Hendrick noted i n my nomination I have been i n the synthetic rubber indust ry for more than forty years. When I joined ASRC in Louisville in 1975 as an entry level engineer, I was looking for some place to work to get some experience and then after a few years get a better job in another industry. But little did I know at that time, I was already working in a great industry and one that would provide me with the opportunity to make a difference. Most of my career has focused on regulatory complian ce and quite frankly I am proud of my contribution in leading the industry to be recognized as a credibl e source in working with governmental agencies like the International Agency for Research on Cancer, USEPA, OSHA and others. Working with these agencies requires the development of relationships and having mutual respect for their role in the process, while at the same time reinforcing our issues. My representing the industry negotiating the workplace standard for butadiene exposure in the US was the very first time this had ever been done. This standard remains in place today, some twenty plus years later and became the model used in other regions. When I first became a member of the IISRP’s Environmental and Epidemiology Committees I h ad no knowledge of the science of toxicology and epidemiology but my good friends Michael Bird and Jeff Le wis of Exxon Mobil B iomedical, schooled this mechanical engineer, giving me the ability to understand the terminology and be in a position to represent the industry. These contribution and others, incl uding serving as ASRC’s Alternate Director, led the IISRP Performance Review Committee to consider me as the candidate as Managing Director & CEO fol lowing a one year training period in the Deputy position. Early on we enjoined a fantastic grow th in membership in all regions but that came to an ab rupt end in the 2003-2004 period, when our industry experienced the darkest days of our history. This was when it surfaced that a few producers chose to engage in activity forbidden by the IISRP. We lost many members and I was concerned that i f the trend c ontinued, the IISRP would not be able to survive. But thanks to the solid support of our more responsible members, we adapted our programs, enha nced others a nd regrouped to provi de quality services, both to the membership and to the general p ublic. I am extremely proud to state that duri ng this period the IISRP was not contacted by any antitrust authority in the world. This is indeed a major focal point of the IISRP in that we were and continue to be recognized as managing a clean and respectable organization. One of the IISRP strengths as an organization is our abi lity to stand out from the rest and function as a “volunteer based” organization. We have a very l ean staff based upon our members providing resources to drive our agenda. We simply could not operate without the contribution of the the Board Members, Executive, Standing a nd Regional Committee Members. These peopl e are absol utely vital to our existence. Their academic and professional background provides diversity and strength to the IISRP, and in my opinion, none matched by any other organization. During my career I have experienced contact with hundreds of other trade associations and none of these meet the IISRP level of performance. Unfortunately that model is a ch allenge as it has become more dif ficult to staff Board an d Committee leadership positions. The evolution began several years ago and we adapted by having the Staff take on more responsibility for preparation of agenda, minutes and reports bu t even with that, we are sti ll experiencing a lack of volunteerism and I call u pon the Board of Directors to support your committee representation to serve in leadership capacities. I know from experience, it builds character, managerial skills, professional development and loyalty. The IISRP has so many strengths and I am confident that under Juan Ramon’s leadership, we will continue to grow and face the challenges ahead. Our Strategic Direction Initiative we implemented a few years ago will no doubt continue to be our path for ward to excellence. We have made great progress, ho wever we


have much more to accomplish requiring your commitment. Additional resources will be needed and I strongly encourage your support and dedication to furthering the IISRP Mission. The IISRP is more than your ordinary trade association. It is an Institution! It speaks on your behalf on matters of statistics, sustainability, worker safety and health, and other technical matters and it speaks much louder than any single one of its members. It speaks to regulato rs, society, industry observers and to its critics as we have a mechanism to gather the pertinent facts gathered from the members, formulate a strategy, draw a conclusion and vo ice a collective opinion. That is a powerful mechanism, one that we exploit to its fullest and one that has served us well for almost 60 years. During my 40 plus years I have one keen observation about our industry. We exhibit a “family trait” that is unparalleled in any other organization. It is a trait we desire and have c ultivated throughout our history. It i s a trait you cannot feel, touch or see but you know it is there. D o not underestimate the power of “family”, engulf yourself in it and make full use of it. We are af ter all an extraordinary institution! My service to the industry, both while at ASRC and the IISRP has been extremely rewarding and I have been very fortunate to have had the support of my wife Pat. Being a gracious volunteer she has dedicated herself to provide unique social programs and elevating these to a hi gher level. She has been my sounding board when I needed to bounce ideas and solicit another viewpoint. Pat is a v aluable asset to the IISRP and I am grateful for her dedication and contribution. Our very first AGM was in 1982 held in this very city where I had the privilege of making my first speech to the IISRP. I was extremely nervous getting up in front of such an august group of leaders and I had no earthly idea that some 33 years later I would stand once again in front of you but this time accepting the General Award. Pat and I have enjoyed our travels together where we have met many lifelong friends whom have graciously hosted our visits and showcased their country. I have had the privilege of serving as your Managing Director and CEO longer than any of my predecessors and this would not have been possi ble without the support of the Bo ard Members, Committee Representatives and the IISRP Staff. Mr. President, I am honored to accept the General Award of the International Institute of Synthetic Rubber Producers, Inc. Table of Contents


.2016 IISRP Technical Award Guy Wouters

Dr. Guy Wouters has a PhD in Polymer Chemistry from the University of Louvain in Belgium. In 1980, after a postdoctoral position at the University of California in San Diego, USA, he joined ExxonMobil Chemical Company, Belgium where he had various technical responsibilities in the elastomer and the adhesion polymers technology departments. During his career, Dr. Wouters was associated with the development of many of ExxonMobil Chemical’s commercial products such as VistaflexTM ThermoPlastic Olefin’s, EscorezTM hydrocarbon resins and acrylic emulsions, VistalonTM EPDM elastomers, ExxelorTM functionalized polymers, and ExactTM plastomers. He has significant expertise in industrial polymerization processes and in engineering macromolecules structures towards specific end-use applications, particularly by correlating polymer structure with properties. Dr. Wouters spent more than 20 years in elastomers technology where he pioneered the development of EPDM silane grafting and then focused on the development of new EPDM rubber grades from bench scale to commercial production. He also contributed significantly to product innovation with tailored molecular weight distribution. In this respect, Dr. Wouters developed the use of linear and non-linear rheology and of Mooney stress relaxation to correlate EPDM elastomers structure with processability and properties and more specifically to quantify the impact of EPDM macromolecular parameters and long chain branching on rubber compounds viscoelasticity and processing.

He exploited these tools to design and develop new bimodal EPDM polymer structures and products and to develop a range of new commercial metallocene catalyzed EPDM elastomers having excellent processability.

Dr Wouters is the inventor or co-inventor of over 20 patents, and has authored or co-authored sixteen scientific and technical papers. He retired from ExxonMobil in 2012 and is now a consultant in elastomers chemistry and technology


2016 Technical Award Acceptance Speech Guy Wouters

Thank you, Mr. President, and good morning Ladies and Gentlemen, Last November, my cell phone started ringing in the mid-afternoon, showing a number calling from the Houston area. I picked up the phone thinking it was one of my ex-colleagues of ExxonMobil in Baytown, but no… it was Mr. Salinas to announce me that I ha d been selected to receive the 2016 I ISRP Technical Award! What a surprise and what a great honor! So, I would like to start by expres sing my gratitude to my ex-colleague Eric Jourdain for nominating me for this prestigious award, and to the IISRP sele ction committee f or this ho nor. This accomplishment would have never been possible without the collaborat ion of my numerous colleagues and co-workers at ExxonMobil in charge of developing, producing, marketing and selling new EPDM elastomers products, and I wish to thank them for their collaboration, support and excellent teamwork. I woul d also like to thank the ExxonMobil organization for having given me the opportunity to work in different Product Technology areas, and for having been able to initiate and follow the development of new projects and new products from their birth on the bench scale up to their industrial production stage. I worked 32 years with ExxonMobil in several different areas of polymers Technology: first in the Elastomers Technology group where I started the development of EP and EPDM rubber silane grafting for moisture cure, well used in wire & cable industry, and the compounding of EP rubber with polypropylene in Thermoplastic Olefins (TPO’s) for au to bumpers with better impact resi stance. Then I moved to the Adhesion Polymers group whe re was involved in the product and process development of new tackifiers and of acrylic polymer emulsions for water based adhesive applications. Finally, for the last 20 years or so, I was back in the EPDM elastomers area where I was in charge of develo ping new EPDM rubbers via both Ziegler-Natta and Metallocene catalyses. During all th ese years, I f ocused on the understanding of the relationship existing between polymer structure and properties, which is essential to product innovation. Working in an environment where one does not develop new molecule s for the simple pleasure of making progress in science, I understood pretty soon that macromolecules have to be bu ild and engineered, both in composition and structure, not only to suit the requirements of the end-us e applications they are targeted for, but also to optimize their ease of processing. This is what brings differentiating value to new products. I’d like here to share with you some my experience on how we achieved that for EPDM elastomers. Building new elastomer molecules for specific applications involves 3 main basic requirements: -First is the understanding of what is important in terms of end use properties, -Second is the un derstanding of how t he material is processed, and o f the processability requirements, -Third is t he ability to design the right polymer composition and structure that will fulfill the above requirements, and the capability to produce it in an efficient way. I was involved mainly with this third stage which is the most upstream in the development process. In the case of EPDM, making polymers that meet end-use requirements like cure rate, cure state, compression set, hardness and so forth… is not too difficult with a strong chemistry background. Understanding processability requirements calls for a good knowl edge of rubber formulation and of processing equipments, as wel l as a good understanding of customer’s needs. An effe ctive dialogue between rubber transformers and product ap plication experts is requ ired, followed internally by a clo se cooperation between application experts and product designers. The translation of the requirements into polymer structure design is not always straightforward. Trial and error approach can work to some extent but is time and effort consuming and at the end, is not very rewarding. In order to effectively progress, the trick is to fi nd ways to comm unicate, to talk with the polymer molecules…interact with them by putting them in the conditions experienced during rubber processing. The chemist can un derstand how rubber mo lecules respond to deform ations, so figure out


what they like and don’t like. He can make subtl e changes in their structure and see how these changes affect their response to deformations. This is the way I chose to dialogue with rubber molecules… I can cite many different examples that highlight the impact of EPDM structure of processability. At same polymer Mooney viscos ity, some EPDM’s generate lower compound viscosities than others, or disperse better the carbon black. When a rubber compound is processed on a roll mill, it can band and stay well on the rolls or make “bagging”. W hen rubber strips are fed to an extruder, the feed can be smooth and consistent or at the opposite, crumbling, so leading to extrusion instabilities. When the extrudate comes out of the extruder die, it can keep its geometry or show feathering and deformation by collapse before it enters the vulcanization oven…Rubber molecules are not inert, they respond to external sti muli, like stress, compression, shear and s o on. By using performing rheological instruments, it is possib le to translate elastomer responses to external constraints into a physical language that can be understood by a polymer scientist. This is the approach I have been following in the course of my Elastomers career. My goal was to learn the impact of EPDM molecular structure on proc essability and develop ne w EPDM polymers that offer the optimized balance between end use properties and processability. I have been using rheology, both linear and non linear, which is rheology at low and high strain, and thus within and outside of the li near viscoelastic domain. With access to a wide rang e of deformation strains and frequencies, it is possible to establish relationships between EPDM processability and i ts molecular structure. This way, I have been able to quantify the impact of EPDM molecular weight, molecular weight distribution and long chain branching on processability. I have also developed correlat ions between some of these fundamental rheological responses and Mooney Stress Relaxation, which is now a routine test as it proved excellent capability for assessing product structure and production consistency. Using these tools we have develope d via Ziegler Natta catalysis new bimodal EPDM grades having the desired level of long chain branching and molecular weight distribution. They meet with great success in the market by providing excellent rubber processability and end-use properties to customers. In the late 90’s, ExxonMobil started developing Metallocene catalyzed EPDM’s. These polymers are characterized by a ver y homogeneous polymer compos ition, a high cure rate, but also by a linear structure and a narrow molecula r weight distribution that impair their processability. Using our property-structure learning and experience, we have developed a whole new EPDM grade slate produced by metallocene catalysis, and having excellent processability. In my role in Elastomers Technology, it was a great adventure to be associa ted with these multiple innovative developments. It was a great pleasure to be part of several enthusiastic new product development teams involving the various Technology and Business functions of the ExxonMobil Specialty Elastomers Group. During the same period, I also en joyed many years of excel lent teamwork with the IISRP European Technical Operating Committee as representative for ExxonMobil Chemical Europe. So let me thank you again to have selected me to receive this prestigious technical award. This is really a great honor and a great recognition for my contribution to the Rubber Industry. Table of Contents


Speakers Program Bios – Wednesday, 13 April SESSION I MODERATOR Terrie Portmann

Terrie Portmann is the Manager of the Process Oil Sales Team for HollyFrontier Lubricants and Specialty Products. Based out of the Philadelphia, PA sales office, she directs the sales efforts throughout North America for paraffinic and aromatic oil sales in various end-use applications. Terrie entered the tire, rubber and polymer industries as a purchasing manager in 1984 and has worked for several companies over the past 32 years including General Tire, Monsanto, Flexsys, Sunoco and HollyFrontier. Past responsibilities have included purchasing manager, customer service manager and sales manager.

Terrie joined HollyFrontier (formerly known as Sunoco) in 2003. She has been active in the rubber industry through various roles in the Rubber Division, ACS as well as participating in many local rubber groups. She presented to the IISRP Technical Committee on the Outlook for Group 1 refining in New Orleans in 2010 and was a moderator for the IISRP AGM in San Francisco in 2013. Terrie received a bachelor’s degree in Marketing and an MBA from the University of Akron. SESSION I KEYNOTE SPEAKER Bill Kopicki

Bill Kopicki was appointed Director of General Motors Chassis Purchasing: Tires-Wheels-Brakes, effective November 2015. Previously, he was responsible for the General Motors Global Interior Seat Team that globally procures seat final assemblies and seat components for all of General Motors. Bill began his career with General Motors in 1990 as an Engineering co-op student in the Engineering Staff located at the Warren, Michigan Technical Center, then graduating from Kettering University in 1993 with a Management / Industrial Technical Degree. He

then earned a MBA from University of Detroit in 1997. His career transitioned to Purchasing and Supply Chain in 1995, where he joined the North America Car Group Team. Bill held a number of team leader and management positions across the commodity teams. In 2003, his next assignment led him to Shanghai, China as the Global Commodity Manager for Vehicle Entertainment. In 2005, he was appointed Director of Electrical - Asia Pacific responsible for the regional spending. Bill repatriated to Warren in 2007 where he has held various leadership positions in Global Purchasing and Supply Chain including, Logistics, Supply Chain, Indirect Material-Corporate Administrative Services, and Interior Systems. Presentation Table of Contents


SESSION I SPEAKER Tokesha Collins-Wright

Tokesha Collins-Wright is a partner in the Baton Rouge office of Kean Miller. She joined the firm in 2008 and practices in the environmental law group. Tokesha's practice involves most aspects of environmental regulatory law, including permitting, compliance, enforcement and transactional issues, as well as litigation matters. She assists in the representation of local, regional, and national clients in a variety of environmental matters including, regulatory proceedings, state and federal environmental advice regarding permitting and enforcement actions, and rulemaking efforts at both the state and federal level. Prior to law school, Tokesha was a highway engineer for the Louisiana and Texas

Departments of Transportation, where she designed roadway, drainage and other highway projects. Tokesha earned her B.S. in Civil Engineering, with a concentration in Environmental Problems and Planning, from Brown University in 2001. She earned her Masters Degree in Environmental Planning and Management from Louisiana State University in 2005. Tokesha earned her J.D., with a concentration in Environmental Law, from the University Of Maryland School Of Law in 2008. While in law school, Tokesha was a Presidential Scholar, as well as a Notes and Comments Editor of the Journal of Business and Technology law. Presentation SESSION I SPEAKER Michael Weidokal

Prior to becoming the president of ISA, Michael Weidokal had a distinguished career in international economics and in the global business community. He spent a number of years with PricewaterhouseCoopers economic and industry research department, spearheading the firm's research and forecasting activities in Europe, Africa and the Middle East. Prior to this, he led Goodyear's efforts to expand its business operations in emerging markets throughout the world, spending more than five years with the US-based automotive company. Mr. Weidokal received an International Masters of Business Administration from the University of South Carolina and the Wirtschaftsuniversität Wien (Economics University

of Vienna), where he specialized in international economics and global strategy. He received his bachelor's degree in international studies and business administration from Baldwin-Wallace College. He also studied East European history and politics at the University of Pecs, in Hungary. Mr. Weidokal is the editor and chief researcher for many of ISA's best-selling publications, including ISA's Country Reports, Region Reports and the ISA Global Update, ISA's weekly electronic newsletter covering key international political, economic and business issues and events. In addition, he is a leading contributor to ISA's international economic forecasts as well as ISA's risk forecasting activities. He has also written a large variety of articles and studies in the fields of trade, investment and international affairs. He is currently working on a new book on the outlook for the global balance of political and economic power in the coming years and decades.

Presentation

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SESSION I SPEAKER Roxanna Petrovic

Roxanna B. Petrovic is the General Director of Programs of the International Institute of Synthetic Rubber Producers, Inc. based in Houston, Texas. Her career began at Industrias Negromex, S.A. de C.V. in 1999 (Mexico) where she held a number of positions until 2003 when she transferred to Dynasol, LLC (Houston) as their marketing specialist. She holds a BS in chemical engineering from Instituto Tecnológico de Ciudad Madero. She served as Dynasol’s representative on the Americas Section Statistical Committee and as the Institute’s Statistical Committee Chair in 2009.

Roxanna has more than 15 years of experience in engineering, supply chain, procurement, quality systems, commercial intelligence and international business development support. As General Director of Programs at IISRP, she is responsible for the data collection reconciliation, systems design, and analysis and reporting, preparation of all statistical publications, direct responsibility of the Statistical Committee activities and serves as principal liaison for this committee to the Managing Director. Roxanna also assists the Managing Director in policy planning, development and implementation. Her wish is to combine her knowledge and experience in these areas, to deliver the best creative value to IISRP’s members and to the rubber industry.

Presentation

SESSION I SPEAKER Robert Simmons

Robert Simmons joined LMC in 1994. He is LMC International’s Head of Rubber and Tyre Research, a position he has held since 2000. He learned about natural rubber in Papua New Guinea where he worked for the Department of Agriculture in the early 1990s. He is an economist by training and has a master’s degree from Reading University. LMC International is an independent economic and business consultancy providing economic research and consultancy services for a broad range of industries, including the rubber and tire industries. Founded in 1980, its headquarters are in the UK, and it

has a main office in New York. Each year LMC publishes detailed forecasts of global tire markets, the LMC World Tyre Forecast Service. Presentation Table of Contents


SESSION I SPEAKER George Schlager

George Schlager is a Product Manager with LIST AG, Arisdorf, Switzerland where his focus for the last seven years has been on Polymer Devolatilization and on Residual Oil Upgrading.

Prior to joining LIST AG, his background included over 15 years dedicated to Polymer Devolatilization in Flash Evaporation Systems, Thin-Film Evaporators, and Extruders.

George is a graduate of North Carolina State University with a B.S. degree in Chemical Engineering.

LIST is a leader in high viscosity processing technology and solutions.

Presentation Speakers Program Bios – Thursday, 14 April SESSION II MODERATOR Wayne Stair

Wayne H. Stair founded Americas International, Inc. in 1997 as a North American distributor of polymers and additives for the tire and industrial rubber goods markets. Prior to establishing Americas International, Wayne worked 18 years in various roles with The Goodyear Tire & Rubber Company. As a Tire Compound Engineer, Wayne registered two patents on tire tread formulations. Wayne continued on to become International Purchasing Manager (Goodyear Tire) and ultimately International Sales Manager (Goodyear Chemical).

As President, Wayne has expanded Americas International’s distribution in terms of geography, products supplied and markets served. Today, Americas International consists of a nationwide system of warehouses, logistic partnerships, sales offices, and multiple sister companies and represents some of the world’s leading chemical companies. Wayne earned a Bachelor of Science Degree from Penn State and a Masters Degree in Polymer Science from the University of Akron. Wayne joined IISRP as an affiliate distributor in 2010. Table of Contents


SESSION II FEATURED SPEAKER Steve Charles

Steve joined Firestone Tire & Rubber Company as part of the 1981 College Class on March 30, 1981. His first assignment was in the Tractor & O.H. Development Department as a junior engineer. He continued his engineering work in the Commercial Development group, progressing to an engineer and senior engineer level. In March, 1988 (around the time Firestone became Bridgestone Americas) he moved into the OE Passenger/LT Engineering group where he earned promotions to Project Engineer in May 1989 and Senior Project Engineer in June 1992. In July 1996 he was promoted to a Section Manager in the JOE Tech Service–H.M.N. group and in February 2004 he moved into General Motors OE Tire Development as Section Manager.

In June 2008 Steve accepted the position of Manager of the AG/OTR/TBS Tire Engineering Department and was further promoted to the position of Director, Commercial Tire Development in February of 2011. In September 2013, Steve was promoted to his current position as Vice President, Product Development. Steve holds a Bachelor’s degree in Agricultural Engineering from Penn State. Prior to joining the company, his background was in farming (as a partner in a farm operation, involved in all aspects of the business). Steve has served as Board Chairman for Junior Achievement and remains a board member. He is also currently a member of the United Way of Summit County board of directors and participates in the “Read to Me” program at intercity schools in the Akron area. Presentation SESSION II SPEAKER Matt Croson

Matthew (Matt) E. Croson became the President of the Adhesive and Sealant Council (ASC) on March 15, 2010. As President, he oversees all aspects of delivering value to both the members who join the Council, and the industry at large. ASC produces two annual conventions and expos, six technology-based short courses, fundamentals oriented webinars, publishes definitive market reports, and supports industry standards development and regulatory responses. In 2014, the Council agreed to a new Long Range Plan with a focus on a vision centered on the concept that “innovators secure the future with adhesives and sealants.” Matt and the nine person ASC team are based in Bethesda, MD.

Matt joined the ASC after twelve years at the Packaging Machinery Manufacturers Institute (PMMI). During his tenure at PMMI, he oversaw the membership, communications, meetings and IT departments. His team supported all facets of membership retention, recruitment, new program development and customer service. He also held a variety of communications oriented positions with InteliData Technologies Corporation, and Burson-Marsteller. Matt holds a B.A. in English, with a concentration in writing from George Mason University. He is a member of the Board of Directors for the Council of Manufacturing Associations at the National Association of Manufacturers, and the Council of Chemical Association Executives. Presentation Table of Contents


SESSION II SPEAKER John Paul Soltesz

John Paul “JP” Soltesz joined GE in 2007 and has been a member of the Global Market Intelligence team since 2011. As Market Strategy Leader, JP links economic and market analysis to the business opportunities and risks of GE’s sectors. He provides global economic consultation and strategic insight to internal stakeholders and at customer events. JP directs projects and thought leadership on topics including innovation, technology, and public policy. He has presented his insights on the US housing market, the millennial generation, the correction in global oil prices, and the Future of Work at major industry events across the globe. Prior to joining the Global Market Intelligence team, JP spent 4 years in

Market Intelligence roles at GE Capital Real Estate, working primarily with the Global Investment Management team. Presentation SESSION II PANEL SPEAKER Bill Hyde

Bill began his career with Union Carbide Corporation in 1990 where he had various positions including engineering, optimization, planning, and logistics. In 2000, he joined Texas Petrochemicals as a Business Analyst. Bill joined CMAI in the Olefins Consulting Practice in 2002. He assumed responsibility for CMAI’s Global C4 Olefins and Elastomer Practice in 2006. In 2011 he was promoted to Senior Director Olefins and Elastomers in IHS Chemicals with responsibility for the global suite of Olefins and Elastomers Services.

He has published a number of papers on the Olefins and Elastomers industries as well as presented at Olefins and Elastomers Conferences around the world. Bill has B.S. and M.S. Degrees in Chemical Engineering from Brigham Young University and an M.B.A. from Tulane University. Presentation SESSION II PANEL SPEAKER Daniel L. Lippe

Daniel Lippe received a B.S. degree in Chemical Engineering from Texas A&M University in 1974 and a M.B.A. from Houston Baptist University in 1981. He began his professional career in 1974 with Diamond Shamrock Chemical Company and began his professional consulting career in 1979. Daniel founded Petral Consulting Company in 1988 and provides clients with in-depth analysis and forecasts for natural gas, crude oil, refined products, feedstocks and primary petrochemicals. Petral Consulting Company provides clients with ongoing market analysis and price forecasts via “NGL Markets in North America”, “Olefins Markets in North America” and “Monthly Survey of Ethylene Production, Feedslates &

Coproducts.” Petral Consulting Company also conducts consulting studies for clients on a proprietary basis. Daniel is a member of American Institute of Chemical Engineers, recognized in Who’s Who of Distinguished Alumni, is also an active member Gas Processors Suppliers Association. Finally, he authors two ongoing series of articles on midstream industry developments, NGL feedstocks and primary olefins for the Oil & Gas Journal. Presentation Table of Contents


SESSION II PANEL SPEAKER Paul Brisson

Paul Brisson is Vice President for C4 Olefins & Derivatives for Argus DeWitt. He has held various sales and business management positions with Diamond Shamrock Chemicals, OxyChem, Huntsman, Altivia, and TPC Group over a 37 year career in the industrial chemical industry. Beginning with OxyChem’s acquisition of Cain Chemicals in 1986, Paul moved into the olefins and aromatics side of the industry in major account management and development, specializing in North American contract butadiene sales. Since joining DeWitt in 2007 he has b een the C4 Business consultant, with

emphasis on the global butadiene markets. Argus DeWitt serves clients that produce, consume, and trade butadiene and butadiene derivatives around the world. Paul holds a Bachelor of Arts degree in philosophy from The Ohio State University.

Presentation Table of Contents


4/22/2016

1

Innovation -Transforming the Automotive Industryg y

Bill KopickiGeneral Motors

Chassis Director Wheels, Brakes and TiresGlobal Product Purchasing

New Orleans 2016 57th AGM

Global Purchasing and Supply Chain CORE Priorities

Total Enterprise Approach to CostAccelerate Innovation

Waste Free Value Streams

Defect Free VehiclesLaunch with Quality and Volume


Nurture Relationships


SueFlynn

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Speaker Program - Session I

4/22/2016

2

SHAPING THE FUTURE: LEADING THE NEW TRANSPORTATION BUSINESS MODEL

ACTIVE SAFETY AND AUTONOMOUS

eMOBILITYENGINEERINGEFFICIENCY


AUTONOMOUSEFFICIENCY

TODAY TOMORROW

VEHICLES WITH MORE EFFICIENCY – CHEVROLET MALIBU


o Nearly 300 pounds lighter

o 48‐mpg estimated for hybrid

o Improved FE by 8%


4/22/2016

3

ACTIVE SAFETY /AUTONOMOUS


eMOBILITY



4/22/2016

4


REDEFINING VEHICLE OWNERSHIP



4/22/2016

5


SHAPING THE FUTURE: LEADING THE NEW TRANSPORTATION BUSINESS MODEL

ACTIVE SAFETY AND AUTONOMOUS

eMOBILITYENGINEERINGEFFICIENCY


AUTONOMOUSEFFICIENCY

TODAY TOMORROW


4/22/2016

6

SHAPING THE FUTURE: WHAT IS YOUR DISRUPTION?

A th S th ti R bbWhat is the Synthetic Rubber Industries Guayule or

A th hi l li ti f S th ti


Are there Synthetic Rubber formulations that can replace Natural Rubber?

Russian Dandelion?Are there new vehicle applications for Synthetic Rubber?



SueFlynn

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Table of Contents

3/28/2016

1

Ozoneat70ppb(andLower):ChallengesandOpportunitiesfortheRubberIndustry

Tokesha M. Collins‐Wright, Partner

Orleans 2016 57th AGM

Kean Miller Law Firm

IISRP Annual General Meeting

April 13, 2016

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WhatisOzone?

• Ground level ozone is not emitted directly into the air. Ozone is created by chemical reactions between nitrogen oxides (NOx) and volatile organicchemical reactions between nitrogen oxides (NOx) and volatile organic compounds (VOC) in the presence of sunlight.

• Breathing ozone can trigger a variety of health problems, particularly for children, the elderly, and people of all ages who have lung diseases such as asthma.


• Ground level ozone can also have harmful effects on sensitive vegetation and ecosystems.

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WhatAretheMajorSourcesofNOxandVOC?

• Power Plants

• Fossil Fuel Fired EnginesFossil Fuel Fired Engines

• Mobile Sources

• Solvents

• Industrial Processes

• Chemical Manufacturing

• Ferrous & Non‐Ferrous Metals

• Mining Orleans 2016 57th AGM

Mining

• Metals

• Oil & Gas Production

• Petroleum Refineries

• Pulp & Paper

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2015RevisionoftheOzoneAirStandard

• On October 1, 2015, EPA strengthened the National Ambient Air Quality Standards (NAAQS) for ground‐level ozone.Standards (NAAQS) for ground level ozone.• Primary Standards — to protect human health

• Secondary Standards — to protect human welfare and the environment (agriculture, forestry, etc.)

• Lowered both primary and secondary Ozone NAAQS. Areas will meet the standards if the 4th highest daily maximum 8‐hour concentration per year,


averaged over 3 years, is equal to or less than 70 ppb

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• Ozone Monitoring Season


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• Amended certain monitoring provisions (requirements for Photochemical Assessment Monitoring Stations (PAMS) stations based on population), additional Federal Reference M th d t d d it i f t t d t h dliMethod, extended ozone monitoring season for some states, new data handling provisions

• Updated the Air Quality Index

• Included a Prevention of Significant Deterioration (PPSD) grandfathering provision to allow use of 2008 standard rather than 2015 standard if:

P i i f ll d i d li i l f 10/1/15 Orleans 2016 57th AGM

• Permitting agency formally determined application complete as of 10/1/15

• Public notice of draft permit published prior to date the new standard became effective (December 25, 2015)

• EPA will issue further guidance on PSD permitting, designations, and ozone transport

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2015OzoneNAAQS‐ ImplementationMemo

• EPA is set to work with state, tribal, local, and federal agencies to implement the updated ozone standards.

• Memo issued with the revised standards outlines the agency's plans for addressing issuesMemo issued with the revised standards outlines the agency s plans for addressing issues related to:• Guidance available to agencies;

• Ensuring major source permitting is effective and efficient;

• Designating areas;

• Background ozone;

• Interstate ozone transport;

• The challenges of reducing ozone in California;

M i it i t k Orleans 2016 57th AGM

• Managing monitoring networks;

• Emissions from wildland fires; and

• Transportation planning.

• Memo available at: https://www.epa.govisites/production/files/2015‐

• 10/documents/implementation_memo.pdf

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2015OzoneNAAQS‐ Implementation‐RelatedRules&Guidance

• Current and draft guidance that will apply to the updated standards

• Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act (CAA) Sections 110(a)(1) and 110(a)(2) ‐ September 13, 2013 (http://www.epa.gov/airquality/urbanair/sipstatus/infrastructure.html)

• Draft Emissions Inventory Guidance for Implementation of Ozone [Particulate Matter] National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations — April 2014 (http://www3.epa.gov/ttn/chief/eidocs/eiguid/index.html)


• Draft Modeling Guidance for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze — December 2014 and Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze — April 2007 (http://www.epa.gov/scram001/guidance sip.htm)

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2015OzoneNAAQS‐ Implementation‐RelatedRules&Guidance(cont’d)

• Current rules that apply to the revised NAAQS:

• Revisions to the General Conformity Regulations (75 FR 17254, April 5, 2010) and guidance (40 CFR part 93, subpart B and 40 CFR part 51, subpart W) (http://www3.epa.goy/airquality/genconform/regs.html)

• Transportation Conformity Rule (77 FR 14979, March 14, 2012) and Guidance for Transportation Conformity Implementation in Multi‐Jurisdictional Nonattainment and Maintenance Areas February 2012 (40 CFR part 93 subpart A and 40 CFR part 51 O

rleans 2016 57th AGM

Maintenance Areas — February 2012 (40 CFR part 93, subpart A and 40 CFR part 51, subpart T) (http://www3.epa.goy/otaastateresources/transconf/index.htm) N

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2015OzoneNAAQS‐ EPAImplementationSchedule


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2015OzoneNAAQSImplementationScheduleforNonattainmentAreas


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GoodNeighborRequirements‐ OzoneTransport

• Each state must ensure that its State Implementation Plan (SIP) demonstrates that sources within the state will not significantly contribute to nonattainment with the ozone NAAQS in "downwind" states

• If states do not make such demonstrations in their SIPs, EPA is authorized to enact a Federal Implementation Plan (FIP)

• EPA has addressed this thus far by enacting first the Clean Air Interstate Rule, then later the Cross State Air Pollution Rule (aka Transport Rule) O

rleans 2016 57th AGM

( p )• Thus far, has focused only on NOx emissions from Electric Generating Units (EGUs)

• Nothing limits EPA or the states to regulating only EGUs to prevent interstate ozone transport

• EPA is already working on a FIP for the 2008 ozone NAAQS for states that did not obtain approved transport SIPs

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Meeting(All!)theStandards

• Existing and proposed federal rules are set to help states meet the revised standards by reducing ozone‐forming pollution. These rules include:

l l• Regional Haze regulations;

• Mercury and Air Toxics Standards;

• Clean Power Plan;

• Tier 3 Vehicle Emissions and Fuels Standards;

• Light‐Duty Vehicle Tier 2 Rule;

• Mobile Source Air Toxics Rule;

• Light‐Duty Greenhouse Gas/Corporate Average Fuel Efficiency Standards;

• Heavy Duty Vehicle Greenhouse Gas Rule; Orleans 2016 57th AGM

• Heavy‐Duty Vehicle Greenhouse Gas Rule;

• Reciprocating Internal Combustion Engines (RICE) NESHAP;

• Industrial/Commercial/Institutional Boilers and Process Heaters Maximum Achievable Control Technology (MACT) (and amendments); and

• Requirements to reduce the interstate transport of air pollution.

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OzoneAdvanceProgram

• Announced by EPA in April 2012

• Collaborative effort between EPA, states, tribes, and local governments to promote ground‐level ozone emission reductions in order to maintain the Ozone NAAQS. Requires formal signup by state or local agency w/ jurisdiction.

• The stated goals of the program are:

• to help attainment areas take action in order to keep ozone levels below the level of the ozone NAAQS to ensure continued health protection for their citizens,


• to better position areas to remain in attainment, and

• to efficiently direct available resources toward actions to address ozone problems quickly.

• Eligible: Areas designated attainment, unclassifiable, or not yet designated as of date of signup

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OzoneAdvanceProgram

• Within one year after signing up for the program, a participating area should submit a "path forward letter" to EPAp

• Fully describing control measures and/or programs implemented and/or to be implemented and providing a schedule for the implementation of each one.

• Implementation of the control options should occur to the extent possible for the ozone season immediately following the path forward letter.


• EPA's Expectations

• Periodic updates

• Summary of the status of each of the area's control measures and program taken under Ozone Advance Program

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OzoneControlStrategies

• Each state containing an ozone nonattainment area has to develop a SIP that details the steps the state is going to take to improve air quality and meet applicable air quality standards. Some control strategies included in such SIPs are:g

• Stage II Gasoline Vapor Recovery

• Gasoline dispensing pump vapor control devices (Stage II Vapor Recovery Control) are systems that control VOC vapor releases during the refueling of motor vehicles.

• VOC stationary source control regulations

• VOC emissions can be reduced by making process changes (such as switching to low VOC content coatings) or by installing air pollution control equipment (such as carbon adsorbers or incinerators).

• NOx stationary source control regulations Orleans 2016 57th AGM

NOx stationary source control regulations

• NOx emissions can be reduced by making process changes (such as modifications to the combustion process) or by installing air pollution control equipment (such as selective non‐catalytic reduction (SNCR) or selective catalytic reduction (SCR)).

• Mobile Source strategies

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OzoneReductionStrategies

• Regulatory Measures

• Control Measures — Regulatory actions focused on stationary and mobile sources.

• Developing Sustainable Communities — Policies and best management practices to assist local government in sustainable development.

• Permitting — Permitting program websites that provide required forms to comply with


g g p g p q p ylocal emissions standards.

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Opportunitiesfortherubberindustry(andforthepetrochemicalindustryatlarge)

• Early adoption of ozone reduction strategies

• Innovative Initiatives


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• Early adoption of ozone control and reduction strategies, such as:

• Reducing VOC emissions by making process changes (e.g., switching to low VOC content coatings) or by installing air pollution control equipment (e.g., carbon adsorbers or incinerators).

• Reducing NOx emissions by making process changes (such as modifications to the combustion process) or by installing air pollution control equipment (such as SNCR or SCR).

• Use of energy‐efficient motors Orleans 2016 57th AGM

• Use of energy‐efficient motors.

• Strict limitations on solvent usage.

• Increasing fuel efficiency.

• Improving boiler efficiency.

• Adopting cogeneration.

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• Innovative Initiatives

• Ozone Action Days — Air Quality Awareness campaigns during high ground‐level ozone y Q y p g g g gperiods.

• National Clean Diesel Campaign — Programs that reduce diesel emissions.

• Voluntary Measures — Actions that require people to make a choice

• Encourage ride‐sharing for commuters

E l b i l h d id d ffi Orleans 2016 57th AGM

• Encourage employees to bring lunch to reduce mid‐day traffic

• Support telecommute/work at home where feasible

• Employ flexible work hours to minimize "rush hour" traffic

• Provide information to employees on "Community Participation" events

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"CommunityParticipation"events

• Trip chain, combine errands and limit daytime driving.

• Ride public transportation or carpool to work.

• Take your lunch to work• Take your lunch to work.

• Walk or ride a bicycle for short trips.

• Refuel when it’s cool ‐ after 6 p.m. ‐ Refueling during cooler periods of the day or in the evening can prevent gas fumes from heating up and creating ozone.

• Don’t top off your tank ‐ It releases gas fumes into the air and cancels the benefits of the pump’s anti‐pollution devices.

• Buy fuel‐efficient motorized equipment.


y q p

• Avoid prolonged idling and jackrabbit starts.

• Don’t mow your lawn or use gas powered lawn equipment until after 6 p.m.

• Conserve electricity.

• Use clean fuels, such as CNG, LPG, reformulated, or "clean" gasolines.

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Questions?


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THANK YOU. Orleans 2016 57th AGM

THANK YOU.

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SueFlynn

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Table of Contents

4/4/2016

1

The Outlook for China and India

Created by ISA (International Strategic Analysis)

www.isa-world.com

Presented by Michael Weidokal, Executive Director

[email protected]

The Outlook for China and India WWW.ISA-WORLD.COM

About ISA (International Strategic Analysis)

• One of the world’s leading economic and political risk forecasting firms

About ISA

forecasting firms.

• ISA publishes a range of best-selling international reports and forecasts.


• ISA provides a range of customized research and advisory services.


4/4/2016

2

Objectives and Agenda

• Analyze the current economic situation in China

• The Importance of China and India

Objectives Agenda

• Determine the outlook for the Chinese economy in over the near- and long-terms.

• Determine if and when India

• A Closer Look at China

• A Close Look at India

• Key Takeaways


can replicate China’s economic success of the past 35 years.

• Key Takeaways

The Importance of China and India for the Global EconomyGlobal Economy



4/4/2016

3

The State of the World Economy

• Global economic growth rates have hovered between 3 1% and 3 4% o er the past

Key Developments Global Economic Growth

3.1% and 3.4% over the past four years.

• Growth has failed to return to the levels of the 1990s and early 2000s.


• Developed economies were the first to hold back growth, but now emerging markets are also doing the same.

Source: ISA, IMF

Growth Rates Converge

• The growth gap between emerging and developed economies narrowed again over the past two years.

Key Developments Economic Growth by Region

g p y

• Only Asia’s larger emerging markets managed to grow at a pace close to pre-crisis levels.

• North America continues to outpace other developed regions


outpace other developed regions.


4/4/2016

4

Global Trade and Investment Falters

• Foreign trade growth levels have been anemic for four consecutive years.

Key Developments Trade and Investment Data

y

• Foreign investment levels remain well below pre-crisis levels in most of the world’s leading economies.

• Foreign investment in most emerging markets collapsed in 2014


emerging markets collapsed in 2014 and 2015.

• The TPP has been signed, but the TTIP remains at risk.

Commodity Prices Keep Falling

• Oil prices trended downwards in 2015 as supplies continued to rise and demand remained subdued.

Key Developments Price Data

• Prices fell dramatically in early 2016, before rebounding in recent weeks.

• Major producers refused to cut output although an output freeze


output, although an output freeze was agreed upon in Q1 2016.

• Weak Chinese demand reduced commodity prices, causing massive hardships for commodity exporters.


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5

The Yuan and Rupee Remain Strong

• Most other major currencies plummeted against the US dollar in 2014 and 2015.

Key Developments Currency Trends

• In 2016, many of these currencies stabilized, and some gained a little ground against the US dollar.

• Many emerging market currencies continued to lose their value against


continued to lose their value against the US dollar.

• The Chinese yuan has remained one of the strongest currencies in recent years.

Economic Growth in India and China

Source: ISA Economic Forecasts, national statistics

The Outlook for China and India WWW.ISA-WORLD.COM10

India’s GDP growth has reached the level of China’s in recent years and is forecast to surpass China’s in the coming years. However, on a per capita basis, India’s GDP

growth rate is far smaller than China’s, given India’s rapid population growth.


4/4/2016

6

The Past, Present and Future

• As recently as the early 19th

century, China and India accounted for 50% of global

Key Points Charts:

accounted for 50% of global economic output.

• By 1950, the two countries combined for less than 9% of global economic output. Source: ISA, Maddison


• By 2050, this number is forecast to rise to more than 30%.

Appreciating the Scale of China and India

• China and India account for 35% of the world’s population.

Key Points Charts:

• China and India account for a 18% of the world’s total economic output.

• China and India account for

Source: ISA, UN


8% of the world’s total land mass.

Source: ISA, IMF


4/4/2016

7

The Role of China and India in the Global Economy

• China has replaced the United States as the leading contributed to global economic

Key Points Charts:

contributed to global economic growth.

• India’s role in driving global economic growth remains smaller, but is expanding.

Source: ISA


• Europe’s and Japan’s role in driving global growth will continue to shrink.

Source: ISA

Expanding Domestic Markets

• China is home to nearly 900 million people between the ages of 15 and 65

Key Points Charts:

ages of 15 and 65.

• India is home to 700 million people in this age group.

• Where China’s population is


aging rapidly, India’s working-age population will continue to soar.

Source: UN


4/4/2016

8

China and India as Export Markets

• Import growth in emerging markets had slowed in recent years due to weaker demand

Key Points Charts:

years due to weaker demand and falling natural resource prices.

• Chinese imports have slumped significantly in 2015.


• Indian imports have also slowed this year, although not to the degree of China.

Source: ISA, IMF

A Closer Look at China



4/4/2016

9

Overview of the Chinese Economy

• China is (or has, depending on the measure) overtaking the US as the world’s largest

Key Points Charts:

the US as the world s largest economy.

• China is the world’s dominant exporter and is becoming an increasingly important importer


important importer.

• Export- and investment-driven growth is losing its dominance in China.

Source: ISA

The Current State of the Chinese Economy

• In recent years, China’s economic growth rates have been cut in half

Key Points Charts:

been cut in half.

• 2015 proved to be a turbulent year in China.

• China’s actual economic Source: ISA


growth rates are likely to be between 3% and 5%.


4/4/2016

10

China’s Period of Uncertainty

• Economic growth in China fell to below 7% in the second half of 2015

Key Developments Chinese Economic Data

Shanghai Composite (Last 12 Months)

half of 2015.

• Chinese trade data showed a combination of lower export revenues and falling demand for imports.


• Chinese share prices have fluctuated wildly in recent months.

The Current State of the Chinese Market

• Chinese consumers are expected to become the leading driver of economic

Key Points Charts:

leading driver of economic growth in China.

• Real estate fears have been overtaken by stock market turmoil.


• Despite the headlines, Chinese consumers keep spending.


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The Chinese Domestic Market

• The gradual transformation from an export-driven econom to a domestic dri en

Overview Retail Sales in China

economy to a domestic-driven economy continues.

• The purchasing power of Chinese consumers has soared over the past 25 years.


• Chinese consumers’ appetite for imported goods and services will continue to rise.

Source: National Statistics

Keys to Economic Growth in China

The Ability of the Government to Keep the Economy from Having a Hard Landing

Key Factors

The Continued Growth of Domestic Purchasing Power

Continued Access to Export Markets and the Continued Economic Upswing in Key

Export Markets

The Ability to Shift the Economy Away

China will continue to have one of the world’s

fastest growing economies for the

foreseeable future, though slightly lower growth rates are inevitable.


y y yfrom an Export-Oriented Economy

Towards a Domestic-Driven Economy

The combination of a booming domestic market and strong export markets will continue to propel Chinese economic growth over the near-term. In the longer-term,

the government must come to grips with issues such as job creation and dealing with asset bubbles that could have a larger impact if the global economy slows.


4/4/2016

12

China’s Population Decline

Chart: Working-Age PopulationChart: Total Population

900 000 000

1,000,000,000

Working-Age Population

1,600,000,000

Total Population

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

Working-Age Non-Working-Age200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

Source: UN, IDBSource: UN, IDB


02000 2010 2020 2030 2040 2050

g g g g0

1950 1970 1990 2010 2030 2050

China’s one family, one child policy is paying dividends. The population of China is growing at an ever slower rate and within 20 years will peak at nearly 1.5 billion.

Without this policy, China population could have been approaching two billion by the year 2050 and it would have been difficult for China to sustain such a large population.

The Outlook for the Chinese Economy

• Despite the recent turmoil, a hard-landing in China is still not likely

Key Points Charts:

not likely.

• Nevertheless, GDP growth rates will trend downwards in the coming years.

Source: ISA, IMF


• Despite this, China will remain the world’s leading contributor to global growth.


4/4/2016

13

Wealth Levels in 2025 and 2050

• The United States and other New World economies will remain the world’s wealthiest

Key Points Charts:

remain the world s wealthiest large economies.

• China will continue its ascent towards developed country status.


• India will make strides in the coming decades, but wealth levels will remain relatively low.

China’s Automotive Industry

• China has emerged as the world’s dominant automotive production location

Key Points Charts:

production location.

• Chinese production is twice that of the US today (and there is much room for more growth).


• Despite a recent slowdown, China remains the world’s leading automotive growth market.


4/4/2016

14

China’s Tire and Rubber Industry

• China has emerged as the leading tire production center in the world (587 million tires

Key Points Charts:

in the world (587 million tires produced in 2014).

• Recent developments (US tariffs, loss of low-end competitiveness) reflect the need to more upmarket


need to more upmarket.

• This led to lower rates of growth in 2015.

China’s Chemical Industry

• China has emerged as the number one player in the global chemical industry

Key Points Charts:

global chemical industry.

• Rapid growth in recent years has brought the threat of overcapacity, potentially slowing near-term growth.


• The industry in China is maturing and this will lead to lower rates of growth.


4/4/2016

15

A Summary of China

• Despite this year’s turmoil, a hard-landing for the Chinese economy is not on the cards.

Key Points

• Even with lower rates of economic growth, China will remain the world’s leading driver of global growth.

• China’s automotive and tire industries have run


into some troubles of late, but both have massive growth opportunities.

A Closer Look at India



4/4/2016

16

Overview of the Indian Economy

• Despite India’s vast population (1.2 billion), India has only the world’s 9th-largest

Key Points Charts:

has only the world s 9 -largest economy (behind Italy for one more year).

• Industrial development in India lags far behind that of many other large emerging


many other large emerging markets.

Source: ISA, IMF

The Current State of the Indian Economy

• After a prolonged slump, the Indian economy has seen growth rates rise since 2013

Key Points Charts:

growth rates rise since 2013.

• A controversial recalculation of the country’s GDP led to these higher rates of growth.

Source: ISA


• Nevertheless, there is little doubt that India will be one of the fastest-growing economies in the coming years.


4/4/2016

17

Keys to Economic Growth in India

Increasing Purchasing Power Among India’s Giant Population

Key Factors

Access to Foreign Investment and Foreign Markets

An Improvement in India’s Infrastructure

The Government’s Willingness to

The government faces much resistance to its economic reforms, but

it must resist this pressure for economic growth to accelerate.


The Government s Willingness to Continue with Needed Economic Reforms

India’s economy is in need of major reforms if it hopes to achieve sustainable high rates of economic growth. In addition, consistency of message and action across India is needed in order to attract higher levels of foreign investment and develop more high-

growth industries in India.

India’s Ever-Expanding Population

Chart: Working-Age PopulationChart: Total Population

The world’s most populous country

by 2025.

Source: IDBSource: IDB


Unlike China, India’s population continues to expand rapidly. Already overcrowded, the country will struggle to find living space for the additional 375 million people expected

by 2050.


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The Challenges of Doing Business in India

• Poor infrastructure and frequent power shortages

Key Points

• Complex regulatory environment

• High and irregular taxes

• Lack of resources


• Lack of skilled labor

• Difficulty in acquiring land

The Outlook for the Indian Economy

Key Points Charts:

• India’s huge domestic market potential will continue to attract investment to Indiaattract investment to India.

• Economic growth rates will hover near 7%-8%.

• India faces many constraints Source: ISA, IMF


to growth (resources, internal divisions, poverty).


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India’s Automotive Industry

• India’s automotive industry lags behind its East Asian rivals but is growing rapidly

Key Points Charts:

rivals, but is growing rapidly (India is the world’s 6th-largest automotive producer).

• India’s automotive industry slumped in recent years before a recovery in 2015


before a recovery in 2015.

• Automotive sales in India more than doubled over the past decade.

India’s Tire and Rubber Industry

• India’s tire industry has been growing at a steady pace (5% to 8%) in recent years

Key Points Charts:

to 8%) in recent years.

• Domestic tire demand has grown rapidly in recent years, despite poor export results.


• Over the longer-term, an expected increase in investment in the industry is expected to boost its competitiveness.


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20

India’s Chemical Industry

• India’s chemical industry is the world’s sixth-largest, but is much smaller than China’s

Key Points Charts:

much smaller than China s.

• India is the world’s third-largest producer of agro-chemicals.


• India produces 16% of the world’s dyestuff and dye intermediates.

A Summary of India

• India’s economic slump has ended and confidence is once again rising in India.

Key Points

• India’s higher-risk levels and constraints on growth will continue to deter some investment.

• India’s automotive and tire industries have grown rapidly over the past 20 years, but there is much


room for more investment and growth.


4/4/2016

21

What to Remember


Key Takeaways

• China and India will account for more than 30% of global economic output by 2050.

Key Points

• Despite recent struggles, growth in China and India will continue to outpace most other markets.

• The automotive and tire industries have major growth opportunities in China, particularly with


regards to moving upmarket.

• India’s automotive and tire industries have grown rapidly in recent years, but remain relatively undeveloped.


4/4/2016

22

The Outlook for China and India

Created by ISA (International Strategic Analysis)

www.isa-world.com

Presented by Michael Weidokal, Executive Director

[email protected]



SueFlynn

Text Box

Table of Contents

4/8/2016

1

Proprietary

International Institute of Synthetic Rubber Producers

Synthetic Rubber OverviewRoxanna B. PetrovicAGM 2016 New Orleans – 13 April 2016

Proprietary2

Topics

Global Capacity & Main Players

New Projects & Expansions

Supply & Demand – Zoom in China

Indian Market

Summary


4/8/2016

2

Proprietary3

Topics




Indian Market

Summary

Proprietary4

SR Indus t ry S t ruc tu re

Source: World Rubber Statistics 2015 - IISRP

2 0 1 5 G l o b a l C a p a c i t y


4/8/2016

3

Proprietary5


C a p a c i t y E x p a n s i o n s , k t


Proprietary6


2 0 1 5 G l o b a l C a p a c i t y



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Proprietary7


C a p a c i t y E x p a n s i o n s , k t


Proprietary8


Ma in P layers


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Proprietary9


Ma in P layers

Proprietary10

Topics




Indian Market

Summary


4/8/2016

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Proprietary11

Globa l Capac i t y

Source: WRS 2015 and IISRP internal estimations.

Proprietary12


G loba l Capac i t y


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Proprietary13



Proprietary14




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Proprietary15



Proprietary16




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Proprietary17



Proprietary18




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Proprietary19

Topics




Indian Market

Summary

Proprietary20

Supp ly & Demand

Source: 4Q 2015 Report – IISRP.

BR 2015 Global Capacity = 4,977 kt (64% operating rate)


4/8/2016

11

Proprietary21

Source: IISRP – China / 4Q2015

BR 2015 China Capacity = 1,740 kt (47% operating rate)

Supp ly & Demand

Proprietary22

ESBR 2015 Global Capacity = 4,848 kt (64% operating rate)

Supp ly & Demand



4/8/2016

12

Proprietary23

ESBR 2015 China Capacity = 1,450 kt (64% operating rate)

Supp ly & Demand


Proprietary24

SSBR 2015 Global Capacity = 2,004 kt (58% operating rate)

Supp ly & Demand



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Proprietary25

SSBR 2015 China Capacity = 263 kt (22% operating rate)

Supp ly & Demand


Proprietary26

EPDM 2015 Global Capacity = 1,783 kt (69% operating rate)

Supp ly & Demand



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Proprietary27

EPDM 2015 China Capacity = 370 kt (27% operating rate)

Supp ly & Demand


Proprietary28

Supp ly & Demand



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Proprietary29

SBC’s 2015 China Capacity = 1,080 kt (76% operating rate)

Supp ly & Demand


Proprietary30

NBR 2015 Global Capacity = 823 kt (70% operating rate)

Supp ly & Demand



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Proprietary31

NBR 2015 China Capacity = 240 kt (60% operating rate)

Supp ly & Demand


Proprietary32

Global estimated OR = 70%

Summary

Source: IISRP internal estimations.


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Proprietary33

Topics




Indian Market

Summary

Proprietary34


S R C a p a c i t y - I n d i a

Ind ian Marke t


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Proprietary35

Source: IISRP estimations

D e m a n d e s t i m a t i o n , k t

Ind ian Marke t

Proprietary36

Ind ian Marke t

Source: http://www.atmaindia.org/production-export-trend.html

T i r e P r o d u c t i o n - m i l l i o n s o f u n i t s


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Proprietary37

Ind ian Marke t

Source: Society of Indian Automotive Manufacturers (SIAM) / IRJ Jan-Feb 2016

To t a l A u t o m o b i l e P r o d u c t i o n – m i l l i o n s o f u n i t s

Proprietary38

Ind ian Marke t

Source: Society of Indian Automotive Manufacturers (SIAM)

I n c r e a s i n g I n v e s t m e n t b y M a n u f a c t u r e r s


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Proprietary39

Topics




Indian Market

Summary

Proprietary40

Summary

Synthetic Rubber Industry


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Proprietary41

Summary


Proprietary42

Summary



4/8/2016

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Proprietary43

Closing

Questions

www.iisrp.com

roxanna@iisrp .com

3535 Briarpark Suite250Houston, TX 77042

+1 713 783 7511

Proprietary

International Institute of Synthetic Rubber Producers


SueFlynn

Text Box

Table of Contents

1

The outlook for natural rubber: a prolonged glut?

Robert SimmonsHead of Rubber and Tyre Research

LMC International

Overview

• What’s happened to prices?

• Natural rubber demand

• Determinants of demand • Substitution possibilities

• Natural rubber production

• Supply-demand balance


2

Natural rubber prices have fallen back to levels last seen in the mid- 2000s

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2000 2002 2004 2006 2008 2010 2012 2014 2016

($/T

on

ne)

Prices are back to their long term average, having fallen, on average, by 2% per annum in real terms since the 1950s

0

100

200

300

400

500

600

700

800

1950 1960 1970 1980 1990 2000 2010

TSR

20

pri

ce (U

S ce

nts

per

kg

)

Nominal prices Real prices


3

0

2

4

6

8

10

12

1995 2000 2005 2010 2015

NR

co

nsu

mp

tio

n, m

n t

on

nes

Other Latex Tyres

NR demand is dominated by the tire industry, which made up 75% of consumption in 2015 and 84% of the increase since 1995.

0%

20%

40%

60%

80%

100%

Demand

NR

dem

and

LV, 35% tyre weight

MHV, 65% tyre weight

OTR, 70% tyre weight

Other, Aircraft, MC, etc

Latex, other GRG

The use of NR varies according to tire type


4

IndiaIndonesia

China

ThailandTurkeyBrazil

MexicoRussia Taiwan

Korea

Malaysia

UKJapan

Spain GermanyFranceItaly

Canada

USA

0

100

200

300

400

500

600

700

800

900

1000

0 10,000 20,000 30,000 40,000 50,000 60,000

GDP per Capita

No

of L

V p

er 1

,000

pop

ulat

ion

LV tire demand depends on vehicle ownership, both for sales of new vehicles (OE tyre sales) and replacement tire sales.

0.0

0.5

1.0

1.5

2.0

- 10,000 20,000 30,000 40,000 50,000 60,000

GDP per Capita

MH

CV

ve

hic

e p

arc

: G

DP

ra

tio Ukraine

Russia

USA

Canada

Australia

IndonesiaS.Africa

Thailand

For MHCV, the opposite relationship holds


5

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2000 2004 2008 2012 2016 2020

GD

P G

row

th

Oct, 2011 Oct,2013

Oct,2015

Advanced Emerging

Source: IMF

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2000 2004 2008 2012 2016 2020

GD

P G

row

thOct, 2011 Oct,2013

Oct,2015

GDP is the main determinant of vehicle ownership.

0

10

20

30

40

50

60

70

80

90

100

2000 2002 2004 2006 2008 2010 2012 2014

Veh

icle

s sa

les

(mn u

nit

s)

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

Em

ergin

g %

Total

Emerging Mature Emerging % total

For much of the last decade, emerging markets were the source of global LV sales growth.


6

0

5

10

15

20

25

30

35

40

45

50

2000 2002 2004 2006 2008 2010 2012 2014

Veh

icle

s sa

les

(mn u

nit

s)

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%E

merg

ing %

Total

Emerging minus China China China % of emerging

Trends in the emerging markets have not been uniform. Growth in LV was dominated by China.

0

5

10

15

20

25

2000 2002 2004 2006 2008 2010 2012 2014

Veh

icle

sal

es (

mn

un

its)

-

50

100

150

200

250

Veh

icle Parc (m

n u

nits)

USA China USA Parc China Parc

Emerging market LV sales build parc, while developed market sales are mainly for parc replacement


7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2000 2002 2004 2006 2008 2010 2012 2014

MH

CV

sal

es (

mn u

nit

s)

10%

20%

30%

40%

50%

60%

70%

80%

90%E

merg

ing m

arkets % o

f total

Advanced Emerging Emerging % total

Trends for MHCV sales are similar

12.0

12.2

12.4

12.6

12.8

13.0

13.2

2000

2002

2004

2006

2008

2010

2012

2014

Mil

es p

er v

ehic

le ('

000)

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Real fu

el price ($ p

er gallo

n)

USAUK

7,600

7,700

7,800

7,900

8,000

8,100

8,200

8,300

8,400

8,500

8,600

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

Mile

s p

er v

ehic

le (m

iles)

60

70

80

90

100

110

120

130

140

150

160

Real fu

el price (£

per litre)

Fuel priceFuel price

Developed markets: miles driven are increasing with lower fuel prices leading to higher replacement ratios


8

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

'000

km

per

veh

icle

China

Emerging markets: miles driven per vehicle have fallen with increased urban vehicle sales

80

85

90

95

100

105

110

115

120

125

130

2000 2002 2004 2006 2008 2010 2012

Ind

ex (2

000

= 1

00)

Parc Miles per Truck Freight

For MHCV, US freight volumes have recovered since the recession, but, miles per truck have not


9

EU

0

2

4

6

8

10

12

14

16

18

20

2006 2007 2008 2009 2010 2011 2012 2013 2014

Re

pla

ce

me

nt

sa

les

(m

n u

nit

s)

23%

24%

25%

26%

27%

28%

29%

30%

31%

32%

33%R

etre

ad

% re

pla

ce

me

nt s

ale

s

Replacement Sales Retreads Retreads % total

Replacement sales have been aided by a fall in retread tire sales (Both Michelin and Goodyear are closing retread facilities in Europe)

0

5

10

15

20

25

30

35

40

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Frei

gh

t (1

00 m

n t

on

nes

)

0%

3%

5%

8%

10%

13%

15%

18%

20%

An

nu

al gro

wth

(%)

Annual growth Freight volumes

China

Emerging market freight growth has slowed


10

0

3

5

8

10

13

15

18

20

23

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Ore

and w

aste

min

ed (b

n tonnes

)

Base metals, phosphate rock and potash Gold Iron Ore Coal Cement

Mining output continued to rise through 2014, but coal may have peaked in 2015 and cement fell due to falling construction activity, especially in China.

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2000 2002 2004 2006 2008 2010 2012 2014

Ch

ang

e in

NR

dem

and

fro

m b

ase

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

TSR - SB

R d

ifferential ($ p

er ton

ne)

Change in demand TSR - SBR price differentialdifferential lag 2 yr

Substitution possibilities in the Advanced markets are limited


11

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2011 2012 2013 2014 2015

Gro

wth

%

-600

-400

-200

0

200

400

600

800

1,000

1,200

1,400TSR

to SB

R p

rice differen

tial ($/ton

ne)

Tyre production NR demand Price differential

China

However, there appears greater scope for substitution in the emerging markets

60%

65%

70%

75%

80%

2004

2006

2008

2010

2012

2014

NR

% o

f to

tal d

eman

d

Non-tyre Tyre

-100

-50

0

50

100

150

2004

/05

2006

/07

2008

/09

2010

/11

2012

/13

2014

/15

Ch

ang

e in

dem

and

fro

m b

ase

('000

to

nn

es)

-1,000

-500

0

500

1,000

1,500

NR

min

us SB

R p

rie differen

tial ($/to

nn

e)

Change in demand

Price differential

In India, the switching has occurred irrespective of price


12

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2000 2002 2004 2006 2008 2010 2012 2014

Mo

vin

g a

vera

ge

ann

ual

ised

ru

bb

er im

po

rts,

mn

to

nn

es

US China EU27 ASEAN

Demand fell by 1% in 2015, the first fall since the recession of 2009.

0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015

Pro

du

ctio

n (

mn

to

nn

es)

0

80

160

240

320

400

480

Pri

ce (

US

cen

ts/k

g)

Production Price Lagged price

Production rose in 2015 despite low prices as new areas came on stream.


13

0

2

4

6

8

10

12

14

2000 2002 2004 2006 2008 2010 2012 2014

Pro

du

ctio

n (m

n t

on

nes

)

Thailand Indonesia Malaysia Vietnam China India Côte d'Ivoire Other

Production has become more concentrated with two origins accounting for 60% of production

2,750

3,000

3,250

3,500

3,750

4,000

4,250

4,500

4,750

2012 2013 2014 2015

Pro

du

ctio

n, 1

2 m

on

th M

.A ('

000

Ton

nes

)

Thailand Indonesia

500

600

700

800

900

1,000

1,100

1,200

2012 2013 2014 2015

Pro

du

ctio

n, 1

2 m

on

th M

.A ('

000

Ton

nes

)

Vietnam Malaysia

India

With low prices, some adjustment to output has occurred, particularly in the high cost markets: Malaysia and India.


14

• Thailand: Area subsidy. Price floor (production subsidy) through government buying

• Malaysia: Price floor (production subsidy)

• India: Kerala state government, price support. Increase in NR import duty

• Vietnam and Indonesia: no government support

• IRCo: to restrict exports by 615,000 tonnes in the year to June 2016

• Countries to increase domestic consumption : asphalt replacement, etc.

Production has been supported by currency depreciation and governments

75

80

85

90

95

100

105

110

115

120

2015 M M J S N 2016P

rice

Ind

ex (J

an 2

01

5 =

10

0)

$ Thailand

Indonesia Malaysia

However, new areas are still coming on stream

• The high price of rubber until 2011 encouraged farmers in many countries to diversify into rubber, with government policy broadly supportive.

• Production areas have increased in Laos, Cambodia, Myanmar and West Africa.

• In some cases, farmers are delaying tapping waiting for better prices.

• Limited area for planting and other agronomic factors have led to Chinese and Vietnamese producers to establish plantations elsewhere.


15

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

1998 2000 2002 2004 2006 2008 2010 2012 2014

Rea

l RS

S3

($/t

on

ne)

0

20

40

60

80

100

120

140

To

tal new

plan

ting

s ('00

0 h

a)

Total new plantings Price

Even in Thailand, there was considerable new planting during the period of high prices

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012 2013 2014 2015

Sto

cks

('000

to

nn

es)

SHFE Qingdao bonded stocks

Gov't stocks since 2012 Thai government

The strength of production in recent years has left the industry with a structural surplus. Much of this surplus has been taken by governments.


16

Summary

• NR demand is growing with the tyre industry.

• The emerging markets have become the driver of this growth, although since 2013 vehicle sales growth slowed in many emerging markets.

• Production/plantings have responded to the high prices from 2006 onwards.

• New plantings have been from both traditional producers and “new” producing countries.

• These plantings are now being tapped which has led to a large rise in production.

• Production growth exceeds that of demand growth and a surplus has emerged. Placing pressure on prices.

• Since 2012 some governments have bought rubber to reduce the surplus.


SueFlynn

Text Box

Table of Contents

4/1/2016

1

New Rubber Devolatilization Opportunities (Direct Desolventizing) Opportunities (Direct Desolventizing) Enabled by Unconventional Technology

George E. Schlager

P d t M LIST AGProduct Manager LIST AG

57th Annual General Meeting of the International Institute of Synthetic Rubber Producers (IISRP)

New Orleans, USA, April 11‐14, 2016


Agenda

• Kneader reactor technology

• Devolatilization kinetic model

• Commercial process comparison

• Two step kneader process

• Product development of Rubber manufactures

• Conclusion / Summary

New Orleans 2016 57th AGM 2


4/1/2016

2

LIST COMPANY

• Private Company

• > 450 Installations

• 100 Employees (60 Engineers)

• Manufacturing by Strategic Partners

• Quality Assurance by LIST

• Fully equipped R&D Facility


Heinz List Vision back in 1966:

“Processes in the concentrated phase are considerably more efficient than processes

in the diluted phase and therefore also significantly more economical.”

3

KneaderTechnology

• Excellent Mixing & Kneading

• Large Heat Exchange Surfaces

• Efficient Renewal of Phase Boundary Layers

• Effective Self-Cleaning

• Large Working Volumes


1 m

• High Torque Applications

• Wide Range of Shear Rate

• Plug Flow

• Batch & Conti

4


4/1/2016

3

KneaderTechnology Single Shaft Example

V l tilF d V l il VaporVapor

Connections VolatilesFeed Volatiles

ProprietaryDisks with

Mixing El t

High StrengthHeated Housing

High StrengthHeated Shaft

VaporConnections with large

Cross SectionalArea

Connections with large

Cross SectionalArea


Discharge

Cross Sectional

ViewSide View

ProprietaryCounter Hooks

Elements

Twin Shaft ExampleVideo

6


4/1/2016

4

Conventional vs. Direct Devolatilization

Solution Polymerization

Stripping

Separation

Coagulation

Expeller

Main Evaporation

Finishing

Water & Steam

Consumption /

Solvent recovery

Footprint / Maintenance

Confectioning

Expander

Belt dryer

Finishing

7

Air handling and emissions

Overall Process Flow Diagram

Pre-Concentration

Condensation / Recovery


Main EvaporatorReactor

(Optional)Recovery


8

Finisher

Confectioning


4/1/2016

5

Main Evaporation

• Cement feed of 75-90% solvent

• Maximum temperature of 100 – 130 °C

• Back mixed kneader reactor

• Discharge target of 2-10% solvent

• High energy duty for solvent evaporation

• Challenges to design a solvent evaporator process:

• Featuring maximal contact heat input

• Use mechanical heat input dissipation to further increase capacity

• High mechanical energy input

9

• Use mechanical heat input dissipation to further increase capacity

• Prevent foam development, which inhibits contact heat input and plugs vapor lines

• Exhibiting maximal flexibility regarding evaporation capacities and polymer grade

Main Evaporation – DevelopmentExperimental & Process Simulation

Continuous back‐mixed reactor

Feed 1Feed 2

Feed 3Feed 4Continuous back‐mixed reactor

Viscous mass

Main Evaporator

CSTR

Feed 4

Heat transferHeat transfer

Torque (50 %)Torque (100 %)

Multiple feed port – CSTR cascade model Experimental development <‐> process simulation and

calculations

10


4/1/2016

6

Cement Feed Rate on Kneader Shaft Speed

35

40

45

5

10

15

20

25

30

35

[kg/h

]

1 feed port:

2 feed ports:

11

0

5

0 0.5 1 1.5

[Hz]RPM

30 60 90

Conclusions – Main Evaporation

• Model developed to predict evaporation capacity using CSTR cascade RTD

• Improved process using multiple feed ports

• Good agreement between prediction and observed feed distribution

• Improved product handling (foam)

• Flexibility of polymer grades

12


4/1/2016

7

Finishing

• Definition:• Removal of volatile components from polymer stream (e.g. non reacted monomer or solvent)

• Process Challenge:• Final product temperature control• Avoid shear• Minimize residence time (maximize process efficiency)• Achieve final volatile specification

13

• Pasty feed of 2-10% solvent

• Maximum temperature of 100 – 130 °C

• High viscosity high mechanical energy overheating of elastomer

• Plug flow kneader

• Injection of stripping media for devol & temperature control

• Discharge target of < 200-2000 ppm solvent

Finishing – Liquid Injection

• Enhanced mass transfer

• Low partial pressure of solvent

• Atmospheric pressure (absolute pressure determines total VOC content)

• Temperature control through evaporative cooling

• High shaft speed possible without overheating product

• High product fill possible without overheating product

14

product

• Final temperature independent of residence time

• VOC content mainly water (strip medium), which typically is acceptable to customers

R&D – 160l Scale up Finisher


4/1/2016

8

Finishing – Liquid Injection

Off Gas

• Axial conveyance is largely independent of shaft speed

• Significantly lower shear than extruder

Liquid injection

• Suitable for diffusion-limited processes requiring long residence times

• Large free volume

• Low vapor velocity, no particle entrainment

• Process flexibility

• Feed conditions

15

LIST FinisherProduct

• Capacity (high turn down ratio)

Two Step Process for Direct Devolatilization

• Installed at Fraunhofer Gesellschaft, Schkopau, Germany

• Part of larger semi works plant for polymer synthesis, d dproduction, and testing

• Applicable for scale-up testing

• Detail Engineering completed for 40kty

16


4/1/2016

9

Comparison to Conventional Process

Operation Cost

Stripping Technology Direct DevolatilizationTechnology

Operation Cost Energy Consumption higher lower Plant Operation higher lower Plant Cleaning Effort higher lower Solvent Purification higher lower

Environmental Off Gas cleaning (Incineration) necessary not necessary Waste Water cleaning higher lower

May 5, 2008 17

Product Quality• low temperature; low shear higher lower• continuous steady state condition worse better

Opportunities – Devolatilization – high cis

Product development of Rubber manufactures

High Performance Tires High Performance Polymers High high cis (99+) and low low cis polymers Driving force for catalyst development

High cis PBR (99+) – linear Polymer

High cis high stickiness High stickiness higher viscosity during polymerization Hi h i it d rin p l m riz ti n l r r bb r n ntr ti n (7%) High viscosity during polymerization lower rubber concentration (7%) Lower rubber concentration Less effectiveness in processing

High stickiness = bad coagulation High stickiness = bad mechanical dewatering High stickiness = bad drying

18


4/1/2016

10

• Opportunity to produce new grades -> flexibility on market trends and demands

• Improve product temperature control -> quality

Conclusion / Direct DevolatilizaitonTechnology Benefits

• Less space required

• Minimize solvent separation step - environmently sound

• Less utility consumption –> less OPEX –> higher profits

• Less maintenance cost -> less cleaning efforts

• Less off-spec materials

• Less solvent losses (VOC’s) – 100% closed system with LISTLess solvent losses (VOC s) 100% closed system with LIST

• Less routine replacement parts

19

Thank you



SueFlynn

Text Box

Table of Contents

4/5/2016

1

AA M E R I C A SM E R I C A S TT E C H N I C A LE C H N I C A L CC E N T E RE N T E R

FUTURE MOBILITY IMPACT ON THE

TIRE AND RUBBER INDUSTRY


Presented By:Steve M. CharlesVice President TechnologyBridgestone Americas

Regulatory Regulatory MovementsMovements

Environmental Environmental SustainabilitySustainability

A CA CASEASE FFOROR CCHANGEHANGE

Advancements in Advancements in TechnologyTechnology

Pursuit of Automated Pursuit of Automated DrivingDriving Shifts in Global Shifts in Global

DemographicsDemographics


Societal BehaviorsSocietal Behaviors


SueFlynn

Text Box

Speakers Program - Session II

4/5/2016

2

SSHIFTSHIFTS ININ GGLOBALLOBAL DDEMOGRAPHICSEMOGRAPHICS

Millennial MovementThe Millennial generation surpassed the outsized Baby Boomer generation as the largest living generation in 2015. Furthermore, more than one‐in‐three American workers today are Millennials , and recently surpassed Generation X t b th l t h f th A i kf

Growing Middle ClassIf trends continue, the middle class in low and middle income countries will grow from 5 percent in 2005, to 25 percent in 2030. China alone will add one billion people to the middle class. Increasing affluence among the emerging economies will lead to a significant increase in those able and wanting to own vehicles.

to become the largest share of the American workforce.

Ageing Society The UN estimates that 1 in 9 (almost 800 million) of the world’s population are over 60 now. This is expected to reach 1 billion by 2024 and 2 billion by 2050. Elderly drivers are more likely to favor comfort over speed, some degree of autonomous control and small


UrbanizationGlobally, more than 54 per cent of the world’s population reside in urban areas in 2014. In 1950, 30 percent of the world’s population was urban, and These urban areas will drive moves by 2050, 66 percent of the world’s population is projected to be urban. This trend will force the reduction of emissions and noise from vehicles, thus favoring EVs or other low emission forms of propulsion . This will also reduce the demand for present day designs of vehicles and instead favor those specifically designed for city type journeys (relatively low speed, short range, and possibly only one or two occupants).

degree of autonomous control and small, short journey vehicles.

CCHANGESHANGES ININ SSOCIETALOCIETAL BBEHAVIORSEHAVIORSMobility Preferences• Americans took nearly 10 percent more trips via public transportation in 2011 than in 2005. The nation also saw increases in commuting by bike and on foot.

• Millennials drive significantly less than

Estimated VMD On All US Roads

Shifting Societal Behaviors and Preferences• Millennials are more likely to want to live in urban and walkable neighborhoods and are more open to non‐driving forms of transportation than older Americans

Millennials drive significantly less than previous generations.

• The percentage of people with a driver’s license 16‐ through 44‐years of age, has continuously decreased since 1983. Respectively from a high of 91.8 percent in 1983 to an all‐time low of 76.7 percent in 2014.

Mobility and the Sharing EconomyThe rise of the shared economy has completely disrupted existing products and services in the urban mobility space. Peer‐to‐peer mobility services like Uber and Lyft have challenged the taxi, livery, car

The Driving Boom is Over!


Americans.• Global Active Internet Users now total 3.175 billion, that’s nearly half of the world’s population.

• Online shopping sales are predicted to grow steadily to $370 billion in 2017, up from $231 billion in 2012.

• Adults 50 years and above now represent the Web's largest constituency.

share, and mass‐transit establishment. Other notable comments:• GM Recently announced a $500 million dollar joint venture with carsharing startup Lyft. The two are teaming up to create a national network of self‐driving cars.

• BCG Estimates that by 2021 users will book 1.5 billion miles each month, generating 4.7 billion in annual revenue.

• A new study by AlixPartners finds 4.9 million people now have car‐share memberships worldwide. By 2020, that number is expected to skyrocket to 26 million.


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3

RREGULATORYEGULATORY MMOVEMENTSOVEMENTS ANDANDEENVIRONMENTALNVIRONMENTAL SSUSTAINABILITYUSTAINABILITY

CAFE Regulations and OEM Challenges• Over the next 10 years, OEMs must deliver a fuel rate reduction that is 2.8x faster than the previous 7 years!

• CAFE is putting emphasis on issues such as tire energy

Transportation Industry and the Environment• The tire industry uses massive amounts of raw materials and generates a corresponding amount of waste product. Its end user industry (transportation) also uses vast

losses (rolling resistance) and weight. It is also driving the interest in alternative fuels, especially electricity and this will affect vehicle design, including tires.

• As a means of MASS reduction, over two‐thirds of new vehicles no longer have a spare tire.

• OEMs have recently shifted to a “tire sealant” type extended mobility solution.

Fuel Economy Improvement vs. CAFE

Its end‐user industry (transportation) also uses vast amounts of fuel and creates much of the world’s emissions. As a result, the future of the tire industry is very much affected by environment and sustainability concerns.

• Tires constitute major real and potential waste stream issues, both in‐use and at end‐of‐life. As a result regulatory agencies are increasing the pressures of end‐of‐use tire life recyclability (devulcanization).

Raw Material and Resource Sustainability• The large quantity of petrochemical feedstock used in manufacturing is leading to pressure on the tire industry to find more sustainable alternatives.

• There are a number of risk factors in relying too


• There are a number of risk factors in relying too heavily on natural rubber and several enabling technologies are needed for supply to meet the expected future demand.

• It is predicted that the main disruptive technology will be bio‐sourcing of monomers for production of tire elastomers.

• Smithers RAPRA reported that the current raw material usage to manufacture tires is not sustainable beyond 2027.

AADVANCEMENTSDVANCEMENTS ININ TTECHNOLOGYECHNOLOGY

Modeling and Simulation• Modeling and simulated tire design, operation, properties, and testing is expected to continue to develop over the next decade

RFID and Smart Tires• The adoption of vehicle autonomy will require RFID and other technologies capable of providing real‐time information to the vehicle control systems.

• Extended mobility will also be a requirement, thus forcing technology to not just measure and report tire pressures but instead take action to

i t i th tinext decade. • Finite element computational materials science will become particularly important.

• These advancements are anticipated to be the drivers of future tire development and are expected to significantly shorten new product design and testing time.

Computing Power and CostDevelopments such as autonomous

maintain the optimum pressure.

Pursuit of Extended Mobility SolutionThe extended mobility solution has several avenues of pursuit.

• Rebirth of “self‐sealing” tires• Expanded run‐flat applications• Non pneumatic applications


Developments such as autonomous vehicles and intelligent traffic management systems will come about through application of this enhanced computational ability and will have a significant impact on the size and nature of the future tire market.

• Non‐pneumatic applications


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PPURSUITURSUIT OFOF AAUTOMATEDUTOMATED DDRIVINGRIVING

Traditional OEMs Pursuit of Autonomy• Traditional OEMs following Path of Incremental Increases of ADAS Systems (Automated Driver Assistance Systems)

Silicon Valley Mobility DisruptionGoogle and Apple appear to be Focusing on Full Automation Disruption― Google's intentions have been transparent Validation is becoming more accepted Hired John Krafcik Ex‐Hyundai CEO On February 4 NHTSA issued a response to Google’s inquiry that a Assistance Systems)

― Defining system as “Convenience Feature”― Initial availability on premium segment only

• DOT and IIHS recently announced historic commitment from 10 automakers to include automatic emergency braking on all new vehicles.

• Tesla recently announced a $2,500 optional “Highway Automation Feature.”

On February 4 NHTSA issued a response to Google s inquiry that a SDS (Self‐Driving System) AI system can be considered a “Driver.” THIS IS A HUGE MILESTONE

Google has announced a full automation car in less than five years ― Apple has followed path of secrecy, but several indicators have been

discovered Hired autonomous expert Jamie Carlson from Tesla Several large investments in AV R&D CEO Tim Cook of Apple quoted “The car industry is in for a massive

change”

Car Sharing Models • Uber intentions and transparency align with Google― Recent investments increase within

academia circles―May also be evaluating freight and

logistic space― Hired trucking expert Mathew Wood

• GM Recently announced a $500 million


• GM Recently announced a $500 million dollar joint venture with carsharingstartup Lyft. The two are teaming up to create a national network of self‐driving cars.

WWHATHAT DDOESOES THISTHIS MMEANEAN FORFOR THETHE TTIREIREIINDUSTRYNDUSTRY ANDAND ITSITS SSUPPORTINGUPPORTING BBUSINESSESUSINESSES? ? Collaboration and New Partnerships with Silicon Valley

Uncharted Territory

Improved Relationship with Traditional OEMsp p Partnership versus Vendor

Human Machine Interface and Experience Real‐Time Activity Data Stream New Mobile Applications

New or Redefined Tire Attributes Speed Ratings Lateral Performance Characteristics UHP or Ologic Type Sizes

RFID/S Ti


RFID/Smart Tires

New Revenue Streams and Business Models BIG Data and Data Mining Telematic Management (OBD II Aftermarket) Expanding Electronic and Sensor Space


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TTHEHE PPOSSIBILITYOSSIBILITY OFOF NNEWEW OROR RREDEFINEDEDEFINEDTTIREIRE AATTRIBUTESTTRIBUTES——SSPEEDPEED RRATINGSATINGS

Speed Ratings will likely become less important as Advanced Driver Assistance Systems (ADAS) play a larger role in the Human Machine Interface (HMI)

Driving Forces AVs and Semi‐AVs will have some level of controls that will

regulate speeds. These features will serve for both safety and fuel economy initiatives

The initial emergent of fully AVs will mostly operate in urban areas with limited speeds, thus negating the need for high speed ratings as well as other UHP characteristics. This could be an entry for non‐pneumatics.


Aging population will favor AV and Semi‐AV features. As a result, these drivers are more likely to operate at lower speeds.

Vehicle‐to‐Vehicle (V2V) and Vehicle‐to‐Infrastructure (V2I) functions will limit driver acceleration and speed

UHPUHP ANDAND LLATERALATERAL CCHARACTERISTICSHARACTERISTICS

In concurrence with the Speed Ratings, UHP, and other lateral performance tire attributes could become less important

Driving Forces ADAS systems will limit imprudent HMI through sensors and override

functions

Limited speeds will lessen the need for aggressive performance attributes

Autonomy features will abide by all recommended traffic postings

V2V and V2I will allow recognition of potential hazards prior to the vehicle entering an “unsafe” zone


Horizontal and other comfort attributes can be expected to improve (Ride –

Noise ‐Wet/Dry Traction – Durability ‐ Rolling Resistance)

Vehicle journey types are predicted to be short and at lower speeds

Bridgestone Ologic™ type characteristics are expected to grow

Convergence of tire classes are expected (Commoditization)


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IINTELLIGENTNTELLIGENT TTIREIRE ANDAND EEXTENDEDXTENDEDMMOBILITYOBILITY AAPPLICATIONSPPLICATIONS

Tire and vehicle information exchange

“Smart Tire” Features will become Essential Extended Mobility is a Must!

Tire failure is not an option with autonomy

E t d d M bilit S l ti th h

gwill be vital within the autonomous framework

Imprudent weather conditions only monitored the surrounding environment, it can be expected that “Smart Tires” will communicate actual road conditions

Intelligent tire features have already


Extended Mobility Solutions through Self‐Sealing, RFT, or other features are re‐entering the marketplace

Many tire manufacturers are reintroducing “Self –Sealing” tire features

emerged in many Fleet management systems

Likely a “Barrier of Entry” with traditional OEMs and other mobility providers

WWHATHAT ISIS BBRIDGESTONERIDGESTONE DDOINGOING…………

BioBio‐‐Rubber Process and Research Rubber Process and Research CenterCenter——GuayuleGuayule

ECOPIAECOPIA™™

e e Ologic

Ologic

Bridgestone Bridgestone


Bridgestone

Bridgestone

Bridgestone Bridgestone NonNon‐‐PneumaticPneumatic

ggRFID and Sensor RFID and Sensor

TechnologyTechnology


4/5/2016

7

WWRAPRAP--UUPPSSOO, W, WHATHAT CCANAN WWEE EEXPECTXPECT??

• Convergence of tire classes—continued movement toward commoditization is possible

So what Can We Expect…

• Regardless of performance characteristics, the tire could see its performance attributes value erode

• Further reduction in rolling resistance to aid fuel economy and other CO2 regulations

• Application of sensor technology for intelligent tires, particularly for data collection in autonomous vehicles and fleet maintenance

• Increased sustainability through, for example, using rubber made from biomass

• Improved materials, greater sustainability, and reversible cross‐link systems to enable full tire recycling

• Ch i ti d i t t ll d thi ti i ll t it l t i t ti


• Change in tire design to tall and thin tires, especially to suit electric automotives

• Greater use of modeling in performance prediction and tire design for speed and reduced development cost

• Strong emphasis on extended mobility through; for example, RFT, self‐sealing, and non‐pneumatic technology.

AA M E R I C A SM E R I C A S TT E C H N I C A LE C H N I C A L CC E N T E RE N T E RAA M E R I C A SM E R I C A S TT E C H N I C A LE C H N I C A L CC E N T E RE N T E R

THANK YOU



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8

Material SourcesAutonomous Cars and Society,Worcester Polytechnic Institute, Dept. of Social Science and Policy

Studies, Worcester, MA, 2007

Autonomous Vehicle Technology ‐ A Guide for Policymakers, RAND Corporation, 2016

Future of Disruptive Technologies in the Tire Industry to 2035, Smithers Rapra, 2014

Global Auto Scenarios 2022, Morgan Stanley, 2012

Recent Decreases in the Proportion of Persons with a Driver’s License Across All Age Groups, University of Michigan Transportation Institute, 2016


y g p ,

Revolution in the Driver’s Seat, Boston Consulting Group, 2015

What's Ahead for Car Sharing?, Boston Consulting Group, 2016


SueFlynn

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Table of Contents

4/5/2016

1

ASC North American Market Study for Adhesives and Sealants (2014-2017) – Opportunities for Synthetic Rubber Producers

Matt Croson

President

Adhesive and Sealant Council

ASC Overview

• Trade Association based in Bethesda, MD

• 125 member companies representing the full adhesives and sealants supply chain

• ASC delivers advocacy, education/training, Convention and EXPO networking opportunities and market reports

• 8 staff including a polymer scientist and PhD. Chemist who support technical education



4/5/2016

2

2014-2017 North American Market Study for Adhesives and Sealants

8th Edition8th Edition, Compiled in Partnership with

DPNA International for the Past 24 Years.

Adhesives: Market Segment Definitions

1. Paper, Board, Related Products Converting/Packaging Dry & Wet Lamination High-Gloss Laminating for Graphic Arts Bookbinding, Graphic Art Industry

4. Consumer/Do-It-Yourself (Retail)

5. Building/Construction/Civil Engineering On-Site Applications Civil Engineeringg, p y

Nonwoven Fabrics Pressure Sensitive Products

2. Transportation Passenger Cars/Light Trucks Repair, Maintenance (Aftermarket) Trucks, Buses Bicycles, Motorcycles, and RVs Aircraft/Aerospace Railway

Shi b ildi d Off h

Civil Engineering Factory Assembled Parts Prefabricated Houses Thermal insulation materials, curtain wall panels, etc.

6. Woodworking and Joinery Cabinet making Furniture Manufacture Window Frames, Door Manufacture Upholstery

Shipbuilding and Offshore

3. Footwear and Leather Footwear Leather Goods

7. Assembly Operations Sandwich Panels Appliances and Electrical/Electronic HVAC Fabric/apparel Medical Applications Sports Equipment and Toys Abrasives, Filters

Source: ASC Market Report

8


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3

Adhesives: Technology DefinitionsNatural Polymer Based Vegetable Protein Animal

l i i / l i

Solvent Based Natural/synthetic rubber Polychloroprene Polyurethane Acrylic Silicone

Polymer Dispersion/Emulsion PVAC EVA Acrylic SBR Polyurethane Natural Rubber Latex

Hot Melt (incl. PU moisture cure) Polyolefin EVA

Reactive (incl. 1 and 2‐part thermoset, UV/EB) Epoxy Polyurethane Polyester, unsaturated Acrylic Formaldehyde Condensates

Waterborne Polyvinyl Alcohol Cellulose Ethers

Polyamide Polyester, saturated Styrene block co‐polymers Polyurethane Acrylic

Cellulose Ethers Carboxymethylcelluose Methylcellulose Polyvinylpyrrolidone Other (e.g. Polyvinylmethylether)

Source: ASC Market Report

15

North America Market Size

20152015 Adhesive & Sealant Market Per Capita

Average

Population GDP Million Thousand

Millions $ Trillion Pounds Metric

Tons

$ Value Pounds Kg

USA321 17.4 7400 3364 11325 23.1 10.5

Canada36 1 8 500 227 865 13 9 6 336 1.8 500 227 865 13.9 6.3

Mexico121 1.3 325 148 500 2.7 1.2

Total478 20.5 8225 3739 12690 17.2 7.8

6


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4

Middle East1.4%

Africa1.1%

Asia Pacific **35.7%

Global Adhesive and Sealant Industry by Region 2015

North America27.1%

Latin America3.6%

Europe * 31.1%

* Europe (W+E), Russia, Turkey

7

Global Adhesive and Sealant Demand: 30.3 billion poundsU.S. Dollar Value: $46.6 Billion `14‐`17 Annual Growth Rate 3.8%

** Asia, India, OceaniaCHEM Research/DPNA International Estimates

Projected Demand -- ADHESIVES ONLY 2014-2017North America

Woodworking & Joinery

8 2%

Assembly Operations/Other

10.3%Woodworking & Joinery

8 2%


10.3%

Paper, board & related products

57.3%

Footwear & leather0.5%

Consumer/DIY (retail)3.0%

Building Construction, Civil

Engineering, Craftsmen

15.4%

8.2%


57.3%



Building Construction, Civil


15.4%

8.2%

8

Transportation5.3%

Transportation5.3%

North America Adhesive Demand: 7.4 Billion poundsU.S. Dollar Value: $10.7 Billion `14‐`17 Annual Growth Rate 3.1%


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5

Adhesive Share of Demand by Product Technology Type

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

9

North America Adhesive Demand: 7.4 Billion poundsU.S. Dollar Value: $10.7 Billion `14‐`17 Annual Growth Rate 3.1%

US Polymer Dispersions/Emulsions by Market Segment 2015

Transportation2.4%


Consumer/DIY (retail)

2.6%

Building Construction,

Civil Engineering, Craftsmen

15.6%

Woodworking & Joinery10.6%


4.0%

10

Total Polymer Dispersions/Emulsions: 3.3 Billion poundsU.S. Dollar Value: $3.9 Billion `14‐`17 Annual Growth Rate 3.2%


64.6%


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6

US Polymer Dispersions/Emulsions by Technology Type 2015

25%

30%

2014 2017

Percent Market Share

5%

10%

15%

20%

25%

11

Total Polymer Dispersions/Emulsions: 3.3 Billion poundsU.S. Dollar Value: $3.9 Billion `14‐`17 Annual Growth Rate 3.2%

0%Ethylene vinyl

acetateVinyl Acetate Natural Rubber

latexSBR Rubber Acrylic Polyurethane Others

US Solvent-based Adhesives by Market Segment 2015

Building

Woodworking & Joinery

5.4%


17.0%


46.0%Transportation

7.0%



gConstruction, Civil


22.3%

12

Total Solvent‐based Adhesives: 830 Million poundsU.S. Dollar Value: $1.2 Billion `14‐`17 Annual Growth Rate ‐0.5%


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US Solvent-based Adhesives by Market Segment 2015

45%

2014 2017Percent Market Share

10%

15%

20%

25%

30%

35%

40%

13

Total Solvent‐based Adhesives: 830 Million poundsU.S. Dollar Value: $1.2 Billion `14‐`17 Annual Growth Rate ‐0.5%

0%

5%

Polychloroprene Polyurethane Block Copolymers Natural & Synthetic Rubber

Other

MACRO OPPORTUNITIES

Growth Positives include:

• Lightweighting of cars

• Emerging composites and joining of dissimilar materials

• High Performance exteriors and structural adhesives

Decisions impacted by Performance and VOCs

14

• If VOCS are not an issue – expect growth.

• If they are, it becomes tough


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8

Challenges in the Industry

Customer Pricing Pressures

Prices Costs

Slow GrowthIncreased Competition

Green Glue

Low VOCsConsolidation

Compressed Margins


Environmental RegulationsEmerging Markets

Source: ASC/DPNA International Inc.

Shrinking Markets

Must Be There to Play

Geopolitical

TurmoilLarger, More Powerful Customers

25

Challenges in the Industry

Tough Competition

Shrinking

Profits


Rising Raw Materials Costs

Source: ASC/DPNA International Inc.

Slow Growth

SBC

26


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9

Advanced Research Focused on Bio-Adhesives and Bio-mimicry

The Adhesion Society h f d khas featured tracks

The Adhesion Society has created a new ‘Bio‐Adhesives’ division

ASC has introduced full day

17

ASC has introduced full day

technical tracks at national conference

Recent Examples of Presentations from ASC Technical Tracks

… Single Molecular Underwater Adhesives Inspired by Mussels ‐University of California – Marine Science Institute

… Nano cellulose Reinforced Waterborne Epoxy Composites at High Loadings ‐ USDA Forest Service Products Laboratory

… The Effect of Tip Size on the Adhesion Strength of BioinspiredMushroom Like Fibers ‐ Texas Tech University

… Biomimetic Wall‐Shaped Hierarchical Microstructure for Gecko‐Like

18

… Biomimetic Wall Shaped Hierarchical Microstructure for Gecko Like Attachment ‐ Georgia Institute of Technology

… Nanoscale Properties and Adhesion Mechanisms in Bamboo Fiber ‐Worcester Polytechnic Institute


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10

Thank You

19


SueFlynn

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Table of Contents

4/8/2016

1

Imagination at work

JP SolteszEconomic Strategist, Data Interpreter, FuturistApril 14, 2016

IISRP 57th Annual General MeetingNew Orleans, LA

New normal for some, not allReal GDP growth (%)

Source: IMF and GE MI forecasts

2

3.1% 2.1%

U.S. World

3.5%

3.8%

3.4%


4/8/2016

2

Rocky start to 2016…

FTSE world equity index – largest declines over 20 consecutive trading days

(1/1/2010 = 100)

Source: Macrobond

3

Outlook_2016Q1 | 9-March-2016

Capital outflows from emerging markets accelerate in 2015

Net capital flows – by EM regions(Bn of $)

Source: IIF

4

Outlook_2016Q1 | 9-March-2016


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China slower growth, but still pretty impressive

5

Source: Oxford Economics, GE Forecasts

Exposure to China: short-term liability, long-term strength

Source: WTO, UN, World Bank, Shlomi Kramer, PhD


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U.S. Employment

7

Source: BLS, JPS

This story is growing old

8


4/8/2016

5

I don’t want to work…

9Source: Shigeru Fujita, Philly Fed, Bureau of Labor Statistics

“Other” reasons for not participating (Cumulative change from 2000)

Oil Price Shock


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6

Supply-driven oil glutnot a demand collapse

Supply-driven market

Source: Bloomberg

11

Transportation still drives demand

Source: IEA

Transport keeps lion share, even with stronger fuel standards – EV the big unknown Regulations Impact of low prices on behavior

Aviation an important demand source

EM demand for plastic products supports petrochemicals


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U.S. supply continues to rise

Source: Energy Information Administration

New sites outperform expectations



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8

Breakeven oil pricesmore progress needed

15

Source: Deutsche Bank

What’s normal?



4/8/2016

9

Oil price will be like…a roller coasterO

il P

rice

Time

Forces of

Supply or

Demand

Profitability Break Evens

Source: JPS

What are potential forces of supply and demand that could break the cycle

18


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10

Industrial Internet Advanced Manufacturing

Global Brain

Minds + Machines

Knowledge + collaboration

3D printing, digitization, robotsW

hat

Res

ults

ProductivityDemocratization of

manufacturing

+ +

Crowdsourcing

Impa

ct

Jobs + Incomes growth

Hyper charged innovation

Future of work

Speed + Flexibility

Transforming industry and the way we work


4/8/2016

11

IoT and Industrial Internet – What’s the Diff?

21

GE’s BBQ Research Center

• Smoke velocity

• Relative humidity

• Temp of each chamber

• Meat temp and how close to being cooked

22


4/8/2016

12

What is the Industrial Internet?

23

The tool that will get us to 0% unplanned down time

24


4/8/2016

13

Global Brain

25

Open innovation – desalination

• $50B in Saudi and $300B globally in H2O investments expected over coming decades; H2O production will increase energy use significantly

• 1MBD used for desalination in Middle East… energy ~ 70% of desalinaton cost

• Co-launched Global Open Innovation in April 2014

• Goal to ID technology to exceed current desalination benchmarks: cost ≤ $0.50/m3, meet WHO standards for potable H2O

• Be implementable and economically viable in arid regions

• 108 applications from 32 countries

• 4 winners received awards of $50,000 each

• Italy/Netherlands, Singapore, Saudi Arabia, U.S.

Opportunity Approach Outcome


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Advanced Manufacturing

27

• Speed and flexibility

• “Democratization” of manufacturing

• Redefining economies of scale

• New opportunities

Industrial Internet Advanced Manufacturing

Global Brain

Minds + Machines

Knowledge + collaboration

3D printing, digitization, robotsW

hat

Res

ults

ProductivityDemocratization of

manufacturing

+ +

Crowdsourcing

Impa

ct

Jobs + Incomes growth

Hyper charged innovation

Future of work

Speed + Flexibility

Transforming industry and the way we work


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Advanced Manufacturing Impact on Jobs

Title or Job Number | XX Month 201X 29

John Maynard Keynes, Technological Unemployment:“Our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.”



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Impact of Advanced Manufacturing


The Democratization of Manufacturing

32

From factories to garages


4/8/2016

17

What happens to globalization?

Source: BMI

Demographic Issues – AM Workforce Ageing

Oxford Economics 34


4/8/2016

18

Burden on Workers and Govts.

35

UN Pop Stats

Divergent Thinking

GEIB, Informed Public

36


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19

DM addicted to lines, EM can Leapfrog

37

Energy Telecom Health Care

The Nomad Workforce

GEIB, Pew, UK ONS, Kellogg School of Mgmt

38

48%Of the informed public

believe the digital revolution will enable new and more flexible

ways of working

500,000 people could leave the labor market

as ACA picks the Entrepreneur Lock

% married at age 18-32


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20

Millennials:

Generation Drift

Household formation lags


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21

Why Millennialls are not forming HH’s

1. Job Market

2. Marriage

3. Education

4. Debt Burden

5. Life Expectancy


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22

1. Job market: beast of burden

2. For Millennials, love and marriage don’t go together like a horse and carriage

% married at age 18-32

Source: Pew Research


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23

3. School days later into life

Source: Pew Research

4. Burden of DebtThis New York Times Magazine article profiles Millennials who still live at their parents home.

14 profiles of adults aged 22-30 from 8 different states

Total debt of $636,000 ($45,428.57 per person)

One common thread: they all have B.A. Degrees; none with STEM degrees, none who chose to forego college education for a trade.


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24

Student Loans have surpassed $1t

5. Life Expectancy

UK ONS

48

1 in 3 kids born in UK in 2012 will live

to be 100


4/8/2016

25

Will you still need me, will you still feed me…

Source: CDC


SueFlynn

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4/6/2016

1

Trends in Global Ethylene Markets

Bill Hyde

Senior Director Olefins and Elastomers

IHS Chemical


The View Was So Clear• Light feedstocks

• Would dominate global markets• Massive capacity additions in North America and

Middle East• Some conversion of existing crackers to lighter

feedslate in other regions

• Naphtha cracking• Still required to close the global balance• Capacity rationalization at some point in high cost

low growth regions• Would be incremental producer with compressed

margins



4/6/2016

2

“No plan survives first contact with the enemy.”

Field Marshall Helmuth Von Moltke

1800 - 1891


Increasing Complexity In The Ethylene Value ChainEmerging changes in ethylene supply drivers and demand drivers make modeling the ethylene supply/demand balance more complex than ever before

Ethylene

Increased volatility in conventional feedstock's from traditional sources: naphtha, NGL’s, coal. Feedstock shifts creates volatility in co‐product markets

Gas or Coal to methanol

Methanol to Olefins (MTO)

Coal to Olefins (CTO)

Catalytic / Oxidative Coupling of Methane to Ethylene (OCM)

Co‐product impact: On purpose propylene (via PDH, metathesis, coal, methanol), on purpose BD

Demand Shocks (GDP related) or Demand Shifts (product substitution related)

Coal to MEG (skipping EO)

Coal to VCM (skipping EDC)

Polyolefins Recycle, PE/PVC/PET

4New Orleans 2016 57th AGM


4/6/2016

3

Cracker Feedslate Trends


The Key Question: How Fast Do Oil Price Rebound?

0%

10%

20%

30%

40%

50%

60%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

WTI Brent Dubai Gas/Crude

Global Oil and US Natural Gas Price Marker Trends

© 2016 IHS

Jan

uar

y 20

11 =

100

%

Source: IHS



4/6/2016

4

Cracker Feedslate Differentials Tighten


0%

100%

200%

300%

400%

500%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

US Propane US Naphtha Europe Naphtha Asia Naphtha

Regional Ethylene Cash Costs Relative to US Ethane

© 2016 IHS

US

Eth

ane

Bas

ed C

ost

= 1

00%

Source: IHS

LPG Cracker Feedstocks Dominate but Do Not Replace Heavier Conventional Feedstocks


LPG44%

Heavy55%

Other1%

2010 Ethylene Production by Feedstock

© 2016 IHSSource: IHS

LPG52%

Heavy43%

Unconventional4%

Other1%

2020 Ethylene Production by Feedstock



4/6/2016

5

Cracker Capacity Trends


Ethylene Capacity Chases Cost and Demand


North America23%

West Europe17%

Middle East17%

China10%

Northeast Asia ex China

14%

Southeast Asia7%

Other12%

2010 Ethylene Capacity Distribution


North America25%

West Europe12%

Middle East18%

China16%

Northeast Asia ex China

10%

Southeast Asia7%

Other12%

2020 Ethylene Capacity Distribution



4/6/2016

6

Near Term Ethylene Capacity Additions Lengthen The Market


-2,000

0

2,000

4,000

6,000

8,000

10,000

2015 2016 2017 2018 2019 2020North America China West EuropeNortheast Asia ex China Middle East Southeast AsiaOther Average Ethylene Demand Growth

Ethylene Capacity Additions 2015 - 2020

© 2016 IHS

Th

ou

san

d M

etri

c T

on

s

Source: IHS

“Prophesy is a good line of business, but it is full of risks.”

Mark Twain

1835 - 1910



4/6/2016

7

Forecast Risk • The most significant risk to the forecast is the shape and pace of oil price recovery.

• Recovery delayed?• Pause in ethane based investments• Stronger naphtha based economics• Naphtha based investment?

• Recovery accelerated?• Stronger ethane advantage• More rapid investment decisions• Naphtha based margin surge at risk

• General economic trends• Continued disappointment from Developing World• Disruption of Developed World strength


Beyond 2020? • Is there enough low-cost ethane and propane in North America to support continued investments?

• How do developments in on-purpose technology for olefins versus traditional routes, including the use of methanol as a route to olefins change the market?

• What happens in China including the real impacts of coal-to-chemicals and on-purpose propylene; private/provincial investment versus state-owned; self-sufficiency and surplus capacity impacting trade; and the economic slowdown?

• The need for ethylene supplied from naphtha cracking is assumed, but do we need all of the existing assets? Do we need additional naphtha based capacity, if so where?



4/6/2016

8



SueFlynn

Text Box

Table of Contents

1

ETHYLENE FEEDSTOCKS:surging ethane supplies, collapsing oil prices &the impact on coproduct butadiene supply

April 14, 2016International Institute of Synthetic Rubber Producers

Petral Consulting CompanyKNOWLEDGE TO BRIDGE THE GAPcopyright © 2016; all rights reserved

Slide # 2

Petral Consulting Company:an overview

Founded in 1988; providing extensive ongoing analysis & forecasts to a diverse group of clients including global chemical companies

PCC mission & objectives:» help clients understand the dynamics of NGL & olefin markets &

economic interactions between midstream, petrochemicals, and refining industries

PCC provides a broad slate of ongoing services:» NGL Markets in North America

» Olefin Markets in North America

» Monthly Survey of Ethylene Production & Feedslates


2

derivatives markets

analysis ofethylene production, economics & pricing

supply/demand trends for NGL &refinery sourced feedstocks

Slide # 3

Petral approach to analysis ofethylene, coproducts, & derivatives markets


Slide # 4

component butadiene from ethylene plants:yields from various feedstocks

0.00

0.05

0.10

0.15

0.20

0.25

0.30

gasoil

naphtha

natural

gasoline

n butane

propane

ethane

lb/gallon



3

Slide # 5

component butadiene from ethylene plants:yields from various feedstocks

0.00

0.20

0.40

0.60

0.80

1.00

1.20

gasoil

naphtha

natural

gasoline

n butane

propane

ethane

lb/gallon

propylene butadiene & other C4


Slide # 6

Oil prices in free fall: How low will they go? & how long before they rebound ?

Will naphtha become less expensive than ethane ? Will ethane become more expensive than naphtha ?

The important third question: Will chemical companies cancel or defer major olefin plant expansions?

US butadiene supply outlook:answers to three important questions?



4

Slide # 7

gas plant ethane production:TX+NM & all other regions

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

thousand b/d

TX+NM all others rejection


ETHANE REJECTION & RECOVERY MARGINS: history & forecast

0

100

200

300

400

500

600

700

2012:1

2013:1

2014:1

2015:1

2016:1

2017:1

thousand b/d

‐20

‐10

0

10

20

30

40

cents per gallon

actual forecast RM recovery margin break even

Slide # 8Petral Consulting CompanyKNOWLEDGE TO BRIDGE THE GAP

copyright © 2016; all rights reserved


5

Slide # 9

Gulf Coast feedstock markets “everything competes with everything”

“ethylene producers pursue lowest cost feedstocks”

ethane

propane

n butane

naphtha&

gasoil


Slide # 10

U.S. petrochemicals from ethylene plants:the impact of the mega‐trend to ethane

0

10

20

30

40

50

60

70

80

90

100

2000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

billion lb/year

ethylene coproducts

Coproducts were nearly 40 bpy in 2004 but fell to 20‐21 bpy in 2012‐2015



6

ethane supply & distribution system constraints» until 2007, ethylene producers’ ethane demand capability

exceeded ethane supply; demand in LA was limited by distribution

ethylene industry’s ethane demand capability:

feedstock flexibility in multi‐feed plants» Gulf Coast multi‐feed crackers are capable of making significant

changes in feedslates within 24‐48 hours

» ethane cracking in multi‐feed plants in 2014 was almost 2Xdemand in 2006; ethane demand in multi feed plants has been at its practical maximum since 2014.

Slide # 11

ethane feedstock demand:overview of variables


USGC ethylene producers focus on minimizing production costs

NGL distribution pipelines deliver 90%+ of US ethane supply to Mont Belvieu; by year‐end 2016 all GC ethylene plants will have pipeline connections to Mont Belvieu ethane supply.

Ethane’s cost advantage of 15‐35¢/lb versus naphtha provided very short payback periods for capital investments in additional ethane feedstock capability; rapid growth in ethane supply encouraged continued investment in ethane based capacity

Slide # 12

US ethylene producers:key drivers for multi‐feed plants



7

Slide # 13

feedstock demand for ethane:economic incentive versus naphtha

(5)

0

5

10

15

20

25

30

35

40

2005

2007

2010

2012

2013

2014

2015

2016

cents per pound

incentive to crack ethane 2004‐2005 average


Slide # 14

feedstock demand for ethane:purity plants, LPG plants & multi‐feed plants

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

thousand b/d

purity ethane plants LPG plants multi‐feed plants



8

Slide # 15

feedstock demand for heavy feeds:naphtha, natural gasoline & gasoil

0

100

200

300

400

500

600

2008

2009

2010

2011

2012

2013

2014

2015

2018

2020

thousand b/d

heavy feed demand upside potential 03‐05 average


coproduct butadiene supplyhistory & forecast

Coproduct supply of butadiene (component butadiene only) began to decline in 2006 & fell to 6.7‐7.0 million lb/day in 2012‐2015 (4.1 million lb/day or 37% less than in 2004)

As ethylene production increases, butadiene supply will increase – based on steady demand for heavy feeds & growth in total ethylene production.

Coproduct butadiene supply will increase to 7.8‐8.2 million lb/day in 2020 or 0.8‐1.2 million lb/day more than in 2015.

Slide # 16Petral Consulting Company

KNOWLEDGE TO BRIDGE THE GAPcopyright © 2016; all rights reserved


9

trends in coproduct butadiene supply

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

million lb/day

heavy feeds LPG feeds ethane



Slide # 18

highlights, headlines & sound bites

feedstock prices, coproduct credits & impact on butadiene:

» As PCC had forecast since 2012, crude oil prices fell to $60‐70/bbl in early December 2014. US production was much more resilient than expected. When prices fell to $30/bbl, the oil directed rig count fell below 400 in March (30% less than in December 2015).

» Ethane’s production cost advantage vs. natural gasoline was 35¢/lb in June but was just 7¢/lb in Dec 2014. As demand surges with start up of 5 new plants, ethane’s cost advantage vs. natural gasoline may narrow to zero by first half 2018.



10


US ethylene producers have invested in feedstock flexibility since the late 1970’s & were well prepared to take advantage the surge in U.S. ethane supply.

Ethylene producers completed all retrofit projects in all “heavy feed” & “multi‐feed” plants in 2015; demand for heavy feeds has been steady for 12 consecutive quarters.

Steady demand for heavy feeds limited further decline in coproduct supply . Even through oil prices dipped to $28‐30/bbl in January/February, feedstock demand for heavy feeds was steady & ethane demand reached a new record high.



Slide # 20


CRUDE OIL PRICES:

» While crude oil prices are $30‐40/bbl, growth in US crude oil & associated gas production will be slower than in 2012‐2014 (as has been forecast since 2012).

» Demand growth and production declines will reduce the current oil supply surplus (est. at 2 million b/d) by 2017 or 2018.

» As prices recover to $45‐55/bbl, growth in US production will resume – US supply potential will cap oil prices for 10‐20 years.



11

Slide # 21


ETHANE SUPPLY, NEW ETHYLENE PLANTS & COPRODUCTS:

» US gas processors are currently rejecting 550,000 b/d of ethane – enough to satisfy demand for 5 new world scale ethylene plants and 100,000 b/d of waterborne exports.

» North America will have surplus NGL feedstocks for the next few decades; petrochemical companies will continue to allocate significant capital to new capacity in North America. A few marginal projects may be delayed or cancelled, but most announced ethylene/derivative projects will move forward.



SueFlynn

Text Box

Table of Contents

05/04/2016

1

LondonHouston

WashingtonNew YorkPortlandCalgary

SantiagoBogota

Butadiene Outlook for 2016

BogotaRio de Janeiro

SingaporeBeijingTokyo

SydneyDubai

MoscowAstana

KievPorto

IISRP – Annual General MeetingNew Orleans

Paul Brisson

14 April 2016

JohannesburgRiga

Market Reporting

ConsultingEvents

Butadiene Market Forces to Follow for 2016

Market Reporting

ConsultingEvents


05/04/2016

2

• Crude oil / BD basics

These Factors will Shape Global BD Supply and Price Trends

/

• China demand recovery

• The glut of BD and derivative capacity, mostly in Asia

• BD Trade Flows

Copyright © 2015 Argus Media Ltd. All rights reserved.

• The 2016 outlook for crude oil is bearish and uncertain as OPEC, with no support from Iran, has not set production

Crude Oil

quotas. Most likely scenario: Supply will continue to exceed demand growth.

• Argus Media’s crude outlook is for 2016 WTI to peak around $40/bl in Aug/Sep, ease back slightly in the winter, and end 2017 around $45/bl.

• Consensus it that crude oil prices will end 2017 around $50/bl.



05/04/2016

3

• 95% of global BD comes from steam crackers• Asia crackers and about 60% of European crackers run on

naphtha (liquid feedstocks)Cracker operating rates and feedstock preference determine

BD Fundamentals

• Cracker operating rates and feedstock preference determine the output of co-product BD. Liquid feedstock cracking generate 5-6 times as much BD as does ethane cracking.

• Europe trending lighter (BD output down); the US building new ethane crackers (BD output up).

• NE Asia is short of ethylene and butadiene, so crackers run at high rates but BD imports are needed to balance demandat high rates but BD imports are needed to balance demand.

• The BD premium vs. naphtha will settle in a range of $250-400/t

• Northeast Asia BD markets set the global BD prices


Impact of Conversion to Light Cracking in the US

Year Ethane Propane Butane Heavy BD O t t

US Ethylene Production, by Feedstock

Output

% % % % KT2007 49.7 18.9 4.2 27.2 19332008 53.6 19.3 4.6 22.5 15832009 61.7 19.2 3.7 15.1 13612010 62.1 17.8 3.2 16.9 14692011 64.3 18.3 3.3 14.2 14142012 65 6 20 6 3 2 10 6 1269


2012 65.6 20.6 3.2 10.6 12692013 66.6 21.3 5.2 6.9 12532014 68.2 16.3 7.4 8.1 12742015 68.1 18.0 8.5 5.4 1289


05/04/2016

4

• 95% of global BD comes from steam crackers• Asia crackers and about 60% of European crackers run on

naphtha (liquid feedstocks). Liquid feedstock cracking generate 5-6 times as much BD as does ethane cracking.

BD Fundamentals

g g

• Cracker operating rates and feedstock preference determine the output of co-product BD. Europe trending lighter with ethane from the US (BD output will decline); the US is building new ethane crackers (BD output will increase).

• NE Asia is short of ethylene and butadiene, so crackers run at high rates but BD imports are needed to balance demand. Further BD extraction capacity limited.

• The BD premium vs. naphtha will settle in a range of $250-400/t

• Northeast Asia BD markets set the global BD prices


BD prices tied to Crude Oil?



05/04/2016

5

China Light Vehicle Sales

(000 Units) % Growth

China auto markets – a roller coaster of growth

( ) %

2007 8077.6

2008 8627.7 6.8%

2009 12959.7 50.2%

2010 17206.3 32.8%

2011 17963.3 4.4%

2012 19149.7 6.6%

2013 21934 14.5%

2014 23689 8.0%

2015 24892 5.1%

2016 26000 4.5%


• China struggled to reduced stockpiles of major raw materials and finished consumer products in 2015.

• Tire production was down by 13% in 2015. Exports accounted for 52% of tire output in 2015.

China BD Demand Recovery

p• Tire exports were down 6.5%, directly affected by US anti-

dumping duties. • Synthetic rubber imports increased by 32.8%• Natural rubber imports have increased by 5.4%• Therefore, high inventories are masking demand recovery.

China GDP growth is forecasted at 5-6%.• The tax cut is boosting auto sales and consumer confidence.

2016 auto sales rate hard to call yet2016 auto sales rate hard to call yet.• Conclusion: There must be some demand growth. Has China

already lowered inventory in line with consumption, trade? Even with demand growth, domestic rubber plants will run at reduced operating rates for the next 1-2 years.



05/04/2016

6

The Glut of Capacity - Butadiene• NE Asia is China, S. Korea,

Taiwan, and Japan• Expansions began in 2011 when

BD prices reached $4400/t, cfr China2016 Butadiene Capacity (000 t/yr)

• Unplanned cracker outages are only a short-term distraction but can add to price volatility.

• Additional dehydro projects in China / US delayed/cancelled.

• Some US capacities idled / reduced.

• Reinvestment likely to occur when global capacity reaches 80-85% utilization.

l d

% NE

Asia

%

World %OR

China 4145 58% 26% 65%

NE Asia 7180 46% 85%

SE Asia / India 1344 9% 75%

W Europe 2480 16% 80%

N A i 2660 17% 55%

2016 Butadiene Capacity (000 t/yr)

• BD plants in Asia under-running due to lack of demand for synthetic rubber


N America 2660 17% 55%

World 15650 70%

• Saudi Arabia, Iran, and India export BD to SE Asia and NE Asia

• Singapore, Indonesia,

Typical BD Trade Flow within Asia and Middle East

Singapore, Indonesia, Malaysia, and Thailand are often net exporters to NE Asia

• S Korea, China, and Taiwan are net importers of BD

• Total production and consumption within this orbit of regions is theoretically of regions is theoretically balanced at 7450 kta each.



05/04/2016

7

• The US imports BD from Canada, Brazil, and W Europe

• The US also import crude

Typical BD Trade Flow from Europe and S America to N America

The US also import crude C4 from Canada and Mexico

• Mexico imports BD from Europe and Brazil

• Total production and consumption from this orbit of regions is theoretically balanced at theoretically balanced at 3750 kta each.


• European BD producers are selling more tons to North American consumers under contract. Europe still has surplus BD to ship to Asia-Pacific or North America.

• The US market is more balanced (possibly long) for the

Changes in Trade Flow

(p y g)short-term.

• New tire plants in North America will need more rubber. Synthetic rubber producers with spare capacity will be able to increase production from expanding BD supply. However, SBR and BR imports to North America will probably increase.

• Singapore will export less BD as domestic use increases.• Indonesia will have less BD to export after the new SR plant

starts.• Thailand becoming a net importer of BD this year after sSBR

expansion.• India will import less SR, export less BD, once new eSBR and

PBR plants are qualified.



05/04/2016

8

• After a few projects under construction are completed in 2016, there will be no new investment in BD or derivative capacity, possibly until after 2020

Expectations for the Butadiene markets in 2016

• Crude oil pricing will stay depressed in 2016

• China’s economy has slowed but is still growing. When China BD demand improves, global pricing will start to move back up.

• Trade flows can be disrupted by unplanned outages but should be less of a factor in setting BD pricing due to the typical balance within the main global trade orbits.


For questions about today’s presentation, please contact me at [email protected]

Thank you!


05/04/2016

9

LondonHoustonWashingtonN Y kNew YorkPortlandCalgarySantiagoBogotaRio de JaneiroSingaporeBeijingTokyoSydneyDubaiMoscowAstanaKievPortoJohannesburgRiga


Paul E. BrissonVP – C4 Olefins & Derivatives

Email:Phone:Office:Web:

[email protected]+1 713 360 7538Houstonwww.argusmedia.com

Copyright notice Copyright © 2015 Argus Media Ltd. All rights reserved. All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus.

Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, DEWITT, FMB, FUNDALYTICS, METAL-PAGES, JIM JORDAN & ASSOCIATES, JJ&A, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited.

Disclaimer All data and other information presented (the “Data”) are provided on an “as is” basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party’s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law.


SueFlynn

Text Box

Table of Contents

2015-2016 PRESIDENT-INTERNATIONAL GREG NELSON

Mr. Gregory Nelson is the Founder, Chairman and CEO of East West Copolymer, LLC. Prior to existing ownership, Greg served as CEO, President and Director of Lion Copolymer, a leading global chemical producer of EPDM and SBR rubber, for the last 5 years. Prior to joining Lion Copolymer, Greg spent 4 years at Nalco, a global leader in water technology. He served as President of Nalco Europe and Group President of Nalco’s Equipment and Services Business. Before joining Nalco, Greg was Global Vice President for Purchasing and Supply Chain for Sun Chemical; and before joining Sun Chemical, he was Global Vice President for Purchasing for Dow Chemical. Greg began his career at Exxon Chemical where he held various management and leadership positions of increasing responsibility for nearly 20 years before leaving to join Union Carbide, which was later acquired by Dow Chemical. Greg has a B.S. in Mechanical Engineering from Cornell University. Greg Nelson Farewell Address:

I hope you enjoyed my favorite city, New Orleans! I would like to thank TSRC for sponsoring this luncheon today! Let me thank Jim & Pat McGraw and Juan Ramon and Lorena for setting up this exciting event to

showcase New Orleans Our speakers were top notch and engaging A lot has happened in the past year. Who would have thought that:

o Crude oil would be $30/barrel o Donald Trump would be leading the Republican party

As outgoing president: Challenges for IISRP

Countries are becoming nationalist and are closing their markets with tariffs Industry continues to be in a surplus mode-where production outstrips demand We discussed the ozone legislation in North America (NA) and global warming initiatives spear

headed by world leaders Supply of monomers, especially butadiene, continue to be a challenge where prices and availability

are not within our control The only groups that are making large profits are the monomers suppliers and tire manufactures


Opportunities for Industry

11 new tire plants have been announced in NA The passenger tire & light truck tire sales are strong Six new ethylene plants have been announced in NA Miles driven is at an all time high and hence replacement tires are robust

Closing Remarks I remember standing here at the podium last year in Capetown feeling very concerned about taking over the Present’s role and having to live up the great job Abraham did with the AGM event so I know exactly how Hendrick is feeling.

Table of Contents

2016-2017 PRESIDENT-INTERNATIONAL HENDRICK LAM

Mr. Wing Keung, Hendrick, LAM is Senior Vice President of TSRC Corporation in charge of Applied Polymers Business Unit. He joined TSRC 17 years ago and was in charge of various joint venture projects and technology licensing. He successfully acquired Dexco Polymers for TSRC Corporation in 2010. Before joining TSRC Corporation, he had worked as President of DTMC in the United States, Group CFO for China Pacific and Financial Controller for First Pacific Bank, Hong Kong.

Table of Contents


Business Program Attendees

First Name Last Name Company

Matt Croson Adhesive and Sealant Council

Wayne Stair Americas International

Samuel Stone Anderson International

George Lehman Anderson International

Len Trocano Anderson International

Paul Brisson Argus Media

Masafumi Takamori Asahi Kasei

Yasumasa Yamakoshi Asahi Kasei

Isabelle Jourdain Belgium

Steve Charles Bridgestone Americas

Michael Fagan Channel Prime Alliance

Dieter Roland Comar Chemicals

Fumihiko Koga Denka

Pete Herzog Dexco Polymers

Bart Bowser Dow Chemical

Chuck Carn Dow Chemical

Greg Nelson East West Copolymer

Ivan Williams East West Copolymer

Larry Harris East West Copolymer

Ludovico Balbo Eigenmann & Veronelli

Yo Hibiya ETIC

Ted Pettijohn Evonik

Guy Wouters ExxonMobil (ret.)

Jeff Lewis ExxonMobil Biomedical Sciences

Kurt Aerts ExxonMobil Chemical

Eric Jourdain ExxonMobil Chemical Europe

Mark Smale Firestone Polymers

Bob Handlos Firestone Polymers

John Braver Firestone Polymers

George Sandor FMC

Chris Senyk FMC

Tom Schneberger FMC

Mark Archey French Oil Mill

Alex Lee French Oil Mill

Tayte Lutz French Oil Mill

Jason McDaniel French Oil Mill

John Paul (JP) Soltesz GE

Bill Kopicki General Motors

Magali Trehet Global Pallets Services

Jay Kim Global Pallets Services

Jean-Francois Baus Global Pallets Services

Vianney Roger Global Pallets Services

Kelly Reynolds Golden Tex

Constantin Birkin Goodpack

Brian Lutt Goodpack

Thomas Ong Goodpack

Peter Boorman Goodpack Europe

Tim Palmer Goodpack Europe



Phil Martino Goodpack USA

Ken Hertl Goodyear Tire & Rubber

Tim Taylor Goodyear Tire & Rubber

Juergen Trimbach Hansen & Rosenthal

Jay Flint Hansen & Rosenthal

Terrie Portmann HollyFrontier

Tracy Dang ICIS

Bill Hyde IHS Global

Bill Yamane IISRP

Jim McGraw IISRP

Juan Ramon Salinas IISRP

Mary O' Connor IISRP

Haruyoshi Ueda IISRP

Harry Sun IISRP

Sue Flynn IISRP

Robin Boyd IISRP

Roxanna Petrovic IISRP

Tom Trowbridge IISRP Counsel

Sanjaya Bhatnagar Indian Synthetic Rubber

Michael Weidokal International Strategic Analysis (ISA)

Masayoshi Tokihisa Japan Steel Works

Masamichi Ishibashi Japan Steel Works America

Satoshi Takami Japan Steel Works America

Koichi Kawasaki JSR

Tomohiro Nishikubo JSR

Cliff Thompson JX Nippon Chemical Texas

Abraham Brink Karbochem

Tokesha Collins-Wright Kean Miller Law Firm

Clay Humphries Kimbell (Anderson Int.)

Gwang-Hoon Kwag Kumho Petrochemical

Jong-Hoon Baek Kumho Petrochemical

Kyoung In Chon Kumho Petrochemical

Jun Inoue Kuraray

Ken Abe Kuraray

Masaki Ikuji Kuraray

Brian Chapman Kuraray America

David Steinberg Kuraray America

Joerg Oertel Kuraray Europe

Cecil Lee LCY Elastomers

Nolan Smith LCY Elastomers

Greg Mains Lion Elastomers

Will Howard Lion Elastomers

Jesse Zeringue Lion Elastomers

George Schlager LIST

Paul Martin LIST

Robert Simmons LMC International

Philip Roberson NFM/Welding Engineers

Paul Roberson NFM/Welding Engineers

John Robinson NFM/Welding Engineers

Herbert Fruhmann Nynas

Gutenberg Souza Oliveira Nynas

Jerzy Niemczyk ORGKHIM



Daniel Lippe Petral Consulting

Hu, Jie PetroChina

Li, Shuanhong PetroChina

Wang, Guilun PetroChina

Zhang, Zipeng PetroChina

Elisabeth Gorman Rockwood Lithium

Werner Krauss Rockwood Lithium

Bruce Meyer Rubber & Plastics News

Sami Al-Osaimi SABIC

Abdoul Al-Shamrani SABIC

Abdulnizar Kakkuzhi SABIC

John Jiang Shen Hua Chemical (TSRC)

Larisa Bondar SIBUR

Chen, Chaomei Sinopec

Liang, Aimin Sinopec

Lou, Zhengfang Sinopec

Yang, Guiying Sinopec

Zhang, Yong Sinopec

Mark Williamson South Hampton Resources

Mark Mueller Stemaco

Walter Mueller Stemaco

Steve Willett The Plaza Group

Sandra Straube Trinseo

Samer Al Jabi Trinseo

Ralf Irmert Trinseo

Chinbao Lu TSRC

Hendrick Lam TSRC

Kevin Liu TSRC

Mark Jordan TSRC Dexco

Craig Leopard TSRC-Dexco

Gina Zeringue United States

Enrico Lucchese Versalis

Lucio Spelta Versalis

Kazuhiro Takahashi Zeon

Kazuhito Shinohara Zeon

Hiroyuki Hirakawa Zeon

Table of Contents


Social Program Attendees

First Name Last Name Country

Elizabeth Bowser United States

Annie Brink South Africa

Mariellen Fagan United States

Julie Handlos United States

Pam Hertl United States

Karen Humphries United States

Diana Irmert Germany

Carol Lehman United States

Chonticha Lutt Singapore

Pat McGraw United States

Sharon Roberson United States

Consuelo Roland South Africa

Lorena Salinas United States

Roseann Stone United States

Tonya Taylor United States

Kim Trocano United States

Nancy Trowbridge United States

Table of Contents

Our Next AGM Will Take Place in Taipei, Taiwan – 24-27 April 2017


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