58 agm 24-27 april 2017 taipei, taiwanagmdownload.weebly.com/uploads/1/4/6/3/14639552/58thagm... ·...

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58th AGM 24-27 April 2017

Taipei, Taiwan “Building a Sustainable Future”

IISN: 1932-9581 © 2017 International Institute of Synthetic Rubber Producers, Inc. (IISRP) www.iisrp.com

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Table of Contents 2017 IISRP General Award Wei-Hua Tu……………………………………………………………………………………………. 1 2017 IISRP Technical Award Noboru Oshima .……………………………………………………………………………………. 2 Acceptance Speech ……………………………………………………………..………………… 3 Speakers Program Bios – Wednesday, 26 April Moderator: Jean-François Baus, GPS.................................................... 5 Keynote Speaker Hakjoo Kim, Hankook Tire .................................................................. 5

Michael Weidokal, ISA ……………………………………………………………………….. 6

Salvatore Pinizzotto, IRSG …………………………………………………………………. . 6 Roxanna Petrovic, IISRP …………………………………………………………………..... 7 Dock Moung No, ICIS ........................................................................... 7 Rob Simmons, LMC ……………………………………………………………………………. 8

Speakers Program Bios – Thursday, 27 April Moderator: Kelly Reynolds, Golden Tex................................................ 8 Jack Uang, Protrade Asia ……….………………………………………………............. 9 Chen Hu, Keller & Heckman………………………………………………………………... 9 Zhaofeng Li, NERCRAT …………………………………………………........................ 10

Tony Phoo, Standard Chartered Bank…………………………………………………... 10 Yoshitaka Kumura, Japan Steel Works ................................................... 11

Bill Hyde, IHS Markit ………………………………………….................................... 11

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Speakers Presentations: Wednesday, 26 April Hakjoo Kim, Hankook Tire “Innovation & Evolution of Tire Technology”............................... 12 Michael Weidokal, ISA "The ISA Global Economic and Risk Outlook” ............................... 27 Salvatore Pinizzotto, IRSG “World Rubber Market: Trends and Perspectives”......................... 55

Roxanna Petrovic, IISRP “Global Synthetic Rubber Overview”............................................ 72 No, Dock Moung, ICIS “Other End Use Market Segment Outlook – Rubber Gloves”........... 94 Rob Simmons, LMC “Global Tyre Market Outlook”........................................................ 106

Speakers Presentations: Thursday, 27 April

Jack Uang, Protrade Asia “Innovative Product Applications in the Bicycle Tire Industry”.................. 122

Chen Hu, Keller & Heckman "Overview of Recent Updates on Chinese Environmental Regulations"...... 141 Zhaofeng Li, NERCRAT “China Tire Industry Introduction”............................................................. 156 Tony Phoo, Standard Chartered Bank "Global Outlook 2017/ Asia – The Standout Region".................................. 168 Yoshitaka Kimura, Japan Steel Works "Twin Screw Extruder Technology of De-Volatilization & Dewatering for Rubber & Elastomer Application”............................................................................................... 178 Bill Hyde, IHS Markit "When Will Sanity Return to the Rubber Feedstock Markets?"..................... 190

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2016-2017 PRESIDENT-INTERNATIONAL Hendrick Lam, TSRC Bio & Farewell Address ……………………………………………… 204 2017-2018 PRESIDENT-INTERNATIONAL Enrico Lucchese, Versalis (Eni) Bio ………………………………………………......... 206 Attendees Business Program ………………………………………………………………………………… 207 Spouse/Guests ……………………………………………………………………………………. 210

2017 IISRP General Award Wei-Hua Tu, TSRC (retired)

Mr. Wei-Hua Tu has a very successful career of more than 40 years in the Synthetic Rubber Industry being a promoter of its growth and development. He began his professional career in 1970, taking up several short term initial positions in accounting, and he joined TSRC in 1975, only two years after its founding. His career within TSRC started as an accountant and after holding different positions of increasing responsibility, was named CEO in 2006. He expanded TSRC’s manufacturing presence beyond Taiwan to China, India and the United States via new plants, joint ventures and acquisitions. This expansion included plants to produce BR, NBR, ESBR, SSBR, SEBS, SIS and SBS. As CEO and President of TSRC, he also served as a Director, Managing Director, President or Chairman of all TSRC’s affiliates. Mr. Tu has been actively involved in all IISRP activities for more than 25 years and he has made significant contributions to the IISRP having served as TSRC’s Director during 2005-2015, President of the Asia Pacific Section during 2008-2009 and as Treasurer from 2009 through 2015. During his tenure as Treasurer, he also served on the IISRP Executive Committee and Chaired the Institute’s Finance Pension and Audit Committee. Mr. Tu played a major role in recruitment of Asia Pacific members for the IISRP and his efforts to establish a presence in China through the development of a “Beijing Office” was one of his most major contributions to the IISRP and through TSRC’s financial support, helped to fiscally support the office the first year. Mr. Tu received a B.S. in Accounting & Finance in 1970 from the National Cheng Kung University in Taiwan.

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2017 IISRP Technical Award Noboru Oshima, JSR (retired)

Mr. Noboru Oshima had an extensive career within the Synthetic Rubber Industry, focused on research and development of synthetic rubber produced in solution. He joined Japan Synthetic Rubber Co. (now JSR Corporation) in 1968 where he worked mainly in the area of Research and Development. He contributed significantly to product innovation and had various technical responsibilities. During his long professional career Mr. Oshima worked extensively in the development of Styrene Butadiene Rubbers (SSBR) produced using the solution process and worked on numerous development projects related to that family of polymers among which were the development of the Special Tin Modified SSBR for low rolling resistance tires containing carbon black filler which contributed to improvement of fuel efficiency of tire. During his productive career he was Executive Director of the Tokai Branch of the “Society of Polymer Science, Japan” and was the first recipient of “Japan Rubber Association Award” for the development of Tin Modified SSBR. He is the inventor or co-inventor of over 35 patents and has authored or co-authored numerous scientific and technical publications and papers. Mr. Oshima is a graduate of the Tokyo Institute of Technology with Master’s Degree in Polymer Chemistry.

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2017 Technical Award Acceptance Speech Noboru Oshima

Thank you, Mr. Salinas and Mr. Hongu, for kind introduction. Distinguished guests, Ladies and Gentlemen, I would like to sincerely express my appreciation to all attendees here today and many members of IISRP who have recommended and selected me for this prestigious and historic award. I am greatly honored to accept this IISRP Technical Award knowing that my 35 years of research and development work at JSR Corporation has been recognized by IISRP as contributions for science and technology of rubbers. I have been engaged in Research and Developments of variety of Synthetic Rubbers such as Solution SBR, Polybutadiene, Hydrogenation of SB Copolymers and so on. I enjoyed all those challenges together with many colleagues and learned a lot from those struggles. After the “Oil Crisis” in 1973, “Saving Energy (Eco friendly)” became a world-wide social movement. CAFÉ (Cooperate Average Fuel Economy) standard enacted by the United State Congress in 1975 was one of the examples for such movement. Reduction of Rolling Resistance (RR) started to be required in the field of tire materials also. Tread compounds contribute to Rolling Resistance (RR) at the highest degree among many parts of tire construction. This should have been done without any sacrifice of abrasion resistance and Wet Skid resistance, which is index for tire safety. These performances with conventional polymers are a trade-off in most cases. Till the late 1970’s, polymer producers tried to improve compound properties by optimizing the molecular structure of SBR to respond to this saving energy movement. Even though rolling resistance level was improved to a certain degree, the result was not satisfactory. It was because the level of abrasion resistance or Wet skid resistance was lowered. Thus, developing new SBR was demanded to improve Rolling Resistance remarkably at the beginning of 1980’s. We focused on interaction between polymer and Carbon black to enhance the dispersion of Carbon Black filler in the polymer. We found that the good dispersion of Carbon black filler in the vulcanizates was attained by introducing a functional group to polymer chain end.

We paid attention to organo Tin compounds as functional group to polymer chain end, which do not effect on curing behavior. The relation between the Tin-carbon linkage structure of SBR and the dynamic properties of Carbon-black filled vulcanizates had been studied. The results obtained were as follows: First, Hysteresis Loss (Index of Rolling Resistance) was improved by introducing Tin-Carbon linkage at the polymer chain end without sacrifice of other performances. Second, the higher the content of Tin-Carbon linkage was, the more improvement of Hysteresis Loss was achieved. Third, the position of Tin-Carbon linkage should be at polymer chain end rather than at the middle of polymer chain. Lastly, Tin-butadienyl linkage, a type of Tin-carbon linkage, improves Hysteresis Loss much better than Tin-Styryl linkage. On the other hand, SBR with good Wet Skid resistance property could be achieved by adjusting Tg of SBR.It was well known that there were several kinds of functional groups on the surface of Carbon black.

We examined to clarify chemical interaction between Tin-modified SBR and Carbon black. We found that Bu3Sn-group at polybutadiene chain end reacted easily with several types of Quinone compounds in model experiments. We considered that SBR polymer molecules connected with Carbon black were formed through the reaction of Tin-modified SBR with Quinone groups on Carbon black, Tin-

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modified SBR also reacted with organo acidic compounds such as phenols and organo-carboxylic acids; however, SBR polymer connected with Carbon black was not formed in the system. The most probable mechanism to improve Hysteresis Loss by Tin-modified SBR was believed as follows: SBR polymer connected with Carbon black was formed through the addition reaction of Tin-carbon linkage at SBR chain end with Quinone group on carbon black during Compound mixing under the Lewis acidic condition. This SBR polymer connected with Carbon black prevented Carbon black from re-agglomeration and improved dispersion of Carbon black in the compound. Improved dispersion of Carbon black in the compound led to low Hysteresis Loss properties of Carbon-black filled vulcanizates. This mechanism also explained the reason why Tin-modified star-branched SBR provided low compound Mooney viscosity by breaking-down of SBR polymer chain caused by the reaction with Quinone group on Carbon black during compound mixing. After the intensive investigation, we established an effective and commercially attractive production technology for Tin-modified SBR, namely, SBR containing Tin-Carbon linkage at the polymer chain end for fuel saving tire. The preparation of Tin-modified SBR is as following, Living anionic SBR is obtained by random copolymerizationof ST and BD with BuLi initiator in the presence ofa certain amount of tetrahydrofuran in hydrocarbon solvent. Tin-modified SBR is prepared by adding Tin Compound after dosing small amount of Butadiene monomer at the living anionic SBR polymer chain end. We have produced a variety of modified Solution SBRs for Carbon Black Compounds since 1980s. More and more tread compounds with silica fillers have been developed for Tire Tread to achieve a good balance of Fuel Economy and Grip Performance since 1990s. This trend has been accelerated by recent adoptions of Tire Labeling in many regions of the world. Even though change from Carbon Black to Silica , the same concept we started about 40 years ago, namely , “Introduction of Chemically reactive functional group with filler at the end of Solution SBR ” is widely applied all over the world today. I sincerely accept such honorable IISRP award today understanding that it is because we found the way to commercialize the concept and the same concept is still applied for growing Synthetic Rubber field called Modified Solution SBR. In closing, I would like to acknowledge my colleagues who helped me to achieve such successful development and the support of JSR Corporation, which allowed us to continue our work. I’d also like to thank my family. I could not concentrate on such a long Journey called “R & D” without their help.

Thank you all very much. Table of Contents

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Speakers Program Bios – Wednesday, 26 April 2017 SESSION I MODERATOR Jean-Francois Baus, GPS

Jean-François Baus is the Managing Director of GPS Group providing Metal Packaging and Logistics Services worldwide. Based in Bordeaux, France, he oversees the operations and commercial developments of GPS Metal Crates Rental system for the rubber industry. He began his career in 1994 as a Mechanical Engineer designing process machines working for companies like Alcatel, Mannesmann and Northrop Grumman. He joined GPS in 2001 and was in charge of the operations in the UK for 8 years. During his years in UK he was part of the GPS Rental System development initiating the first GPS Metal Crate design in 2003. Returning to France in 2009, he became Logistics Director looking after packaging pool positioning and managing the large increase of the GPS packaging fleet. He became Managing Director of the Group GPS in March 2014 increasing the world foot print of GPS worldwide particularly in North America and Asia. Jean-François received a M.S. degree in Mechanical Engineering from Paris Tech University in 1991 and a MBA from Paris Sorbonne University in 1992. SESSION I KEYNOTE SPEAKER Hak Joo Kim, Hankook Tire "Innovation & Evolution of Tire Technology"

During his nearly 30 years of experience working at Hankook Tire Corp., Dr. Kim has held many material research positions. In 1987 Dr. Kim began his career at Hankook Tire Corp. as a Research Engineer in the Material Research Team. Later, in 1992, he held the position of Research Engineer of the Compound Development Team. During 1993 to 1997 he devoted himself to finishing his PhD at the University of Akron, Ohio. At the end of his studies in 1997 Dr. Kim returned to Hankook Tire and occupied the position of Chief of Research Engineers of the Material Research Team. In 2005 he held the position of Manager of the Material Research Team

until 2012 when he occupied his current position as Vice President of the materials department. Presentation Table of Contents

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SESSION I SPEAKER Michael Weidokal, ISA "The Outlook for the Global Economy, Trade and Investment"

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 SESSION I SPEAKER Salvatore Pinizzotto, IRSG "World Rubber Market: Trends and Perspectives"

Salvatore Pinizzotto is the incoming Secretary-General of the International Rubber Study Group (IRSG) based in Singapore. Salvatore has worked for three decades in the metals and non-ferrous metals industry focusing on market research and analysis of environmental and economic trends on a regional and global basis. His career has a strong international dimension. Salvatore has worked for the Metals Study Groups (ILZSG and INSG) both in the United Kingdom and Portugal. He has been an invited speaker at several international conferences in Europe, China, India and the

US. Presentation Table of Contents

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SESSION I SPEAKER Roxanna Petrovic, IISRP "Synthetic Rubber Market Outlook"

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 Dock Moung No, ICIS "Other End Use Market Segment Outlook – Rubber Gloves"

Dock Moung No is a Senior Consultant with ICIS Consulting, globally responsible for the synthetic elastomers, leading the single client and long-term forecasting works. He has been with ICIS Consulting since the end of 2015, and prior to joining the organization he had spent 16 years with the Secretariat of the International Rubber Study Group, in charge of the modelling and forecasting of the supply and demand of the global rubber industry and its downstream industries. Dock has a Masters in Development Economics from the School of African and Oriental

Studies. Presentation Table of Contents

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SESSION I SPEAKER Rob Simmons, LMC “Tire Industry Outlook”

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 and Tyre Size Service. Presentation Speakers Program Bios – Thursday, 27 April 2017 SESSION II MODERATOR Kelly Reynolds, Golden Tex

Ms. Kelly Reynolds is a global buyer and has an extensive experience and knowledge of the global market segments related to different types of synthetic rubbers such as EPDM, BR, ESBR, SSBR, SBS, as well as synthetic rubber off spec and plant scrap. Ms. Reynolds has been working for more than 30 years with Golden Tex Company, Inc., which is a Taiwanese trading company that trades in different elastomer types and also reprocesses different synthetic rubber plant scraps, so that they can be recycled and sold into the Asia markets. She has had different responsibilities within the company, related to supply chain area as global buyer, contracts, shipments, purchasing and more.

Ms. Reynolds earned a Bachelor Degree in Marketing from the Oklahoma State University. Table of Contents

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SESSION II SPEAKER Jack Uang, Protrade Asia “Innovative Product Applications in the Bicycle Tire Industry”

Jack Uang is currently the Consultant of Protrade Asia Limited dedicates in innovative technology in polymer material application serving various customer needs. Jack received a Ph.D. degree in Chemistry from University of Missouri-Rolla in 1989. From 1989 to 1994 he served as a Research Associate and Research Investigator in University of Missouri-St. Louis. He held the position of Research Director with Apex Materials Corp. based in St. Louis. During his 15 years of experience working on the printing technology of Thermoplastic Elastomer (TPE), Jack has successfully developed special technical printing processes on substrate of nonpolar materials such as SEBS, SBS, EPDM, POE, OBC, PP and others.

Returned to Taichung, Taiwan since 2010, Jack has been focused to develop the retro reflective rubber hot patch and rubber hot patch which are widely used both in labeling rubber made products such as tires, shoes, sport balls, and household items, with successful results. Presentation SESSION II SPEAKER Chen Hu, Keller & Heckman “Overview of Recent Updates on Chinese Environmental Regulations”

Chen Hu joined the Shanghai office of Keller and Heckman LLP as a staff scientist in April 2009. He provides assistance to foreign and domestic clients in the area of environment, chemical control, food, and food packaging in matters related to regulatory compliance in China, Japan, Korea, Taiwan and other Asian countries. Mr. Hu works closely with government authorities and trade associations in various phases of regulatory development. Mr. Hu has prepared and submitted hundreds of Chinese applications for registration of new chemical substances, food packaging materials, and food additives. He is experienced in auditing plant facilities for food and food packaging manufacturers.

Presentation Table of Contents

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SESSION II SPEAKER Zhaofeng Li, NERCRAT “Chinese Tire Industry Introduction”

Zhaofeng Li has served as Vice Director of National Engineering Research Centre for Rubber and Tire (NERCRAT) since April 2009 and also as Chairman of ECOMBINE Advanced Material Co., Ltd since September 2014. He is responsible for development, manufacturing and marketing of advanced tire compound materials. Also, Mr. Li served as Vice President of MESNAC from 2000 to 2013. Presentation

SESSION II SPEAKER Tony Phoo, Standard Chartered Bank "Asia – The Standout Region"

Tony Phoo joined Standard Chartered Bank (Taiwan) Limited on 7 June, 2007. As senior economist for the NEA region, he currently covers Taiwan and Greater China, as well as other regional economies, along with other colleagues based in the region Based in Taiwan, Tony has over fifteen years of economic research experience spanning across various functions, both in Taiwan and Singapore. He was senior economist for the Fixed Income Department with Capital Securities Corp. Litd between 2003 and 2006. Prior to that, he held similar responsibility in economic research with the Development Bank of Singapore (DBS) and Overseas Chinese Banking Corporation (OCBC) while residing in Singapore.

Tony holds a master’s degree in International Economics, Banking and Finance from University of Wales, Cardiff (UWCC), and obtained his honors degree in Economics with University of London, UK. Presentation Table of Contents

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SESSION II SPEAKER Yoshitaka Kimura, Japan Steel Works “Twin Screw Extruder Technology of Devol. & Dewatering For Rubber & Elastomer Application”

Mr. Kimura has been with The Japan Steel Works, Ltd. ("JSW"), as a process and mechanical engineer since 1992. He started as a process engineer for compounding, devolatilizing and dewatering using twin screw extruders. His main responsibilities included planning trials and setting up extruders in terms of process engineering. In 1999 Mr. Kimura was a mechanical engineer designing extrusion systems. In 2005 he was appointed Deputy Manager of JSW Technology & Engineering group, Plastics Machinery Department. In 2009 he was with Japan Steel Works America, Inc. ("JSW America"), in Detroit, Michigan. Mr. Kimura’s responsibilities were to run the Detroit

Technical Center and expand sales in the US market. In 2015, Mr. Kimura became Group Manager of JSW Extrusion Process Technology Group, Plastics Machinery Department. Mr. Kimura is an expert in the field of extrusion including compounding, devolatilizing, dewatering among others and also supports the sales team as well as customers. He has also been a speaker at various plastic industry workshops and events around world, such as those organized by SPE (Society of Plastics Engineers) and AMI conferences. Mr. Kimura has a bachelor`s degree in Applied Chemistry from the Ehime University, Ehime, Japan. Presentation SESSION II SPEAKER Bill Hyde, IHS Markit “When Will Sanity Return to the Rubber Feedstock Markets?”

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 Table of Contents

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Innovation & Evolution of Tire Technology

H k kti I t d tiHankooktire Introduction

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Global Sales in 2015 Global Production Capacity in 2015

Ranking Company

1 Bridgestone Corp.

2 Group Michelin

3 Goodyear Tire & Rubber Co.

4 Continental AG

5 Pirelli & C. S.p.A

6 Sumitomo Rubber Industries Ltd

Ranking Company

1 Bridgestone Corp.

2 Group Michelin

3 Goodyear Tire & Rubber Co.

4 Continental AG

5 Hankook Tire Co., Ltd.

6 Sumitomo Rubber Industries Ltd6 Sumitomo Rubber Industries Ltd.

7 Hankook Tire Co., Ltd.

8 Yokohama Rubber Co.*

9 Cheng Shin Rubber Ind. Co. Ltd.

10 Zhongce Rubber Group Co. Ltd.

6 Sumitomo Rubber Industries Ltd.

7 Pirelli & C. S.p.A

8 Yokohama Rubber Co.*

9 Cheng Shin Rubber Ind. Co. Ltd.

10 Cooper tire & Rubber Co.

Source : Tire Business ‘16.08 Source : Tire Business, MTD, AR/Factbook

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• Akron Technical Center• Akron, USA• 45 Staffs

• Japan Technical Office • Nagoya, Japan• 2 Staffs

• Technodome• Daejeon, Korea• 722 Staffs

• China Technical Center• Jiaxing, China• 172 Staffs

• Europe Technical Center • Hanover, Germany• 81 Staffs

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• Location : Juk-dong in Daedeok Innopolis• Land Area : 100,000 ㎡• Completion : 2016. Oct.• Investment : approx. 350 million (US $)• Manpower : 1000 Capacity• Architectural Concept :

‘Cutting‘Cutting--Edge Technology’ Edge Technology’

‘Communication and Interaction’‘Communication and Interaction’

‘Leading the Proactive Culture’‘Leading the Proactive Culture’

Technology Trend

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AutomotiveC.A.S.E (Connectivity, Autonomous, Sharing, Electrification)

MegaUrbanization

PHEV (Plug-in Hybrid Electric Vehicle)PHEV (Plug-in Hybrid Electric Vehicle) EV or BEV (Battery Electric Vehicle)EV or BEV (Battery Electric Vehicle)

Both electric and fuel powered-batteries must be recharged by

Entirely electric-powered solelyby electric power and batteriesbatteries must be recharged by

plug in power sourceby electric power and batteries

Chevrolet VOLT Chevrolet BOLT EV

676 km with a full charge anda full tank of gas

383 km with a full charge0 to 100 kph in less than 6.5 sec.

Tesla Model 3

345 km with a full charge0 to 100 kph in less than 6 sec.

Benz S550e Plug-in Hybrid

City fuel economy is 54 mpg(S550: 18 mpg)

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Cost of EV with 200-mile (320 Km) range

Tesla $75,000

Assumptions: 4 miles/kWh 4 miles/kWh, 50kWh batteries, 16% yearly battery cost

improvement, EV Cost = 3X battery

Source: Clean Disruption© Tony Seba

By 2020, the industry will offer $30,000 with less than 1/10 maintenance fee.

By 2025, all kinds of new vehicles will be electric.

Micro-Mobility Conditions of Micro-Mobility Tires

Non-pneumatic Tire

Ideal for urban and short distance movement

CustomizedUnique Tire

Reusable TireMaximum speed 80km/h

Safe Tire

Customizable tire for users

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Self-Driving Car in Logistics

SensorsLasers, Radars and

Self-Driving Car TechnologiesPrivate Self-Driving in City

Cameras detect objectsIn all directions

InteriorDesigned for

Riding, not fordriving

Electric batteriesTo power the

vehicle Back-up systemsFor steering, braking,Computing and more

ComputerDesigned specificallyFor self-driving

Rounded shapeMaximizes sensorField of view

Ti T h lTire Technology

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3rd Generation2nd Generation1st Generation

Intelligent Tire System(Sensing tire ID/pressure/force/road surface)

Tire with TPMS(Sensing pressure)

Conventional Tire(No Sensing)

Tire recommendation/management, tire status monitoring,

Growing interest of in intelligent tire Intelligent tire application

Car Maker’s Requirements

Phase IPressure, Temperature, IDPhase II+ Load Estimation, Wear Estimation

Mid of this yearPressure, Temperature, ID, Load Estimation

Premium Car

in Europe

Electric Car

in North America

Sensor

/ g , g,low fuel efficiency driving direction recommend, driving styleanalysis, road information etc.

Safety for TruckSafety for TruckSealant TireSealant TireRun flat TireRun flat Tire

The Run-flat tire allows a car to travel ata speed of up to 80 kmp/h, even afterlosing internal air pressure due to tiredamage(i.e. flat tire)

Normal Tire Run-flat Tire

Normal Tireconstruction Zero pressure

Zero PressureRubber reinforced sidewall

Supports weight after total air-loss

Collapse of the tire after total air-loss

Safety will become more important intruck autonomous driving

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Safe tires are required polymerswith high temperature stabilityare needed

Reusable TireReusable Tire

High temp. resistanceHigh temp. resistance

Productivity

3D Printing Technology3D Printing Technology

Eco-Friendly

Safety

NPT will be applied to retreading technologySo, It is reusable

We are developing 3D printing technologyto make stable and simple manufacturing

Reusableby changing tread

Electric cars

under developing

and concept cars

Benz Concept EQBenz F 015 Luxury

Porsche Mission EAudi E Tron Quattro Q6

VW future EV concept

p

Bentley EXP 12 SPEED 6E CONCEPT

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Increase of electric cars dueto regulation for fuelefficiency and exhaust gas

Fuel Efficiency Regulations(Object: Passenger cars less than 10 seats)

Korea (2020~)

Japan (2020~)

Noise regulation- EU vehicle : passenger car 72(‘16) → 70dB(‘20)- Japanese tire : Introduction of tire noise performance

indication system in 2018- Korean tire : Introduction of tire noise performance

LRR tire demand to reduceEV car energy consumption

USA (2025~)

EU (2025~)

indication system in 2019

Need to lower tire noise

High Load Durability

Low RR 4.9(EU), Aero-DynamicsShort Distance

High loading (Battery)

Severe Requirements for EV Tire

High Load Durability

Low Noise 67dB → 65dB

Wear

High loading (Battery)

No engine noise

High Start torque

Sever Braking & Acceleration0 to 100 kph ＜ 3 sec

RollingResistance Wet Grip Safety Wear

ResistanceNoise

Car makers require RRcup to 5.4 (SOP: 2019).

Car makers require wet grip grade A with RRc

Self-driving car can cause serious safety

bl k

High torque of EV car causes severe wear.

Noiseless tire is requiredin EV car because it has

l b Because of WLTP*,car maker in EU requires to reduce RRc below6.5 in all tires.

*WLTP(Worldwide harmonized Light-duty vehicles Test Procedure): From 2020, limit of CO2 emission change to 95g/km in test method WLTP. WLTP estimate CO2 emission with worst caseRRc of tire. It results 5~7% higher values compare with current test method, NEDC.

A. Problems , car makersrequire the tire which have good braking, and puncture freetechnology.

no internal combustion engine

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LowWet

Safety

Low Rolling Resistance

Wet Performance

Noise

Low hysteresis polymer without trade-off

Polymer with higher silica affinity

Runflat Tire with light & thin reinforcement

Polymer with higher silica affinity

Sound absorption polymer(C it & P tt i )

Higher grip performance polymer

Wear Resistance

Sealant Tire with self healing polymer

Retention of tread depth for whole life of vehicle

(Cavity & Pattern noise)

■ Break Through Candidate ?

Solution 1. Master Batch

- Silica – Rubber Master Batch

- Graphene Rubber Master Batch

- Natural Oil / Resin Technology

- etc.

Solution 2. New Catalyst / New Functional Group

- New BR

- New SBR

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T h l I tiTechnology Innovation

Ball Pin TireBall Pin TireMind Reading TireMind Reading Tire Transformable TireTransformable Tire

A ball-shaped tire allows one tomove freely with turning 360ºUser’s idea is transferred to the control

device of the car

Changes in future mobility, startingwith the evolution of tires.

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Transformability Easy folding & flexible material

Longlasting propertyAnti-aging material

Study durable material

Supportable the automobile

High temperature stability (Ultra Material)

Self-healing material

Self-healing material

Eco-friendlyRecyclable material

ProcessibilityEnable to 3D printing

Retread

AdhesionHigh Adhesion Material for Plastics,Rubber and Metal

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Thank youThank you

26

SueFlynn

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SueFlynn

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table of contents

4/26/2017

1

ISA (International Strategic Analysis)

The ISA Global Economic and Risk Outlook

Created by ISA (International Strategic Analysis)

Presented by Michael Weidokal, Executive Director, ISA

[email protected]

www.isa-world.com

The ISA Global Economic and Risk Outlook WWW.ISA-WORLD.COM


About ISA (International Strategic Analysis)

• Founded in 2003, ISA now has clients in more than 100 countries, including from major multinationals,

About ISA

g j ,government bodies and research organizations.

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


• ISA provides customized research and advisory services for some of the world’s leading business and research organizations.

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Objectives and Agenda

• To determine how the trends and events of the past year will impact international trade and investment in

• Introduction

• A Look Back

Objectives Agenda

the coming year and beyond.

• To predict the key economic, business and political issues and trends that will shape global trade and investment in the coming year.

• A Look Back

• Key Political Issues to Watch

• Key Economic Issues to Watch

• Regional Outlooks


• To determine which long-term issues and trends will play a key role in the future of global trade and investment and the direction of the global economy.

Regional Outlooks

• Questions and Answers


A Look Back at the Previous 12 Months

How the Last 12 Months Will Impact the Next 12 Months


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The Leading Political Developments of the Past Year

The Trump Administration in the United States

Brexit

East Asian Tensions

The Rise of Populism


Unrest in the Middle East and North Africa


The Trump Administration

• Donald Trump’s chances of winning 2016’s presidential election in the US were considered to be less

Key Developments

than 25% just ahead of the election.

• Since taking office, the Trump Administration has been beset by controversies and an unsettled team.

• President Trump’s approval ratings


• President Trump s approval ratings have fallen to the mid-30s since taking office.

• Of late, there has been a larger focus on international affairs.

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4


Brexit

• The actual impact of Brexit is hard to know until the terms of the UK’s post-Brexit relationship with the

Key Developments European Union Data

p pEuropean Union are established.

• The UK has been a key driver of economic growth in the EU.

• The UK, particularly London, has been a leading destination for


been a leading destination for foreign investment to Europe from North America and Asia.


The Rise of Populism

• Far-right and far-left populism emerged as a major political factor of late.

Key Developments

• On the political far-right, immigration, trade and security have proven to be major vote winners.

• On the political far-left, income inequality and long term


inequality and long-term unemployment became major issues in recent years.

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The Most Important Elections

US President and Congressional Election

B iti h R f d

Shift Right

Shift Ri htBritish Referendum

Philippines Presidential Election

Italian Referendum Shift Right

Shift Right

Shift Right


Colombian Peace Deal Referendum

Spain Parliamentary Elections Shift Right

Shift Right


Unrest in the Middle East and North Africa

Syria

I

Government forces make gains with the support of Russia, Iran and Hezbollah

Islamic State loses ground, but volatilityIraq

Yemen

Libya A lack of centralized control threatens to turn Libya into a new Somalia

Islamic State loses ground, but volatility remains firmly in place

Yemen’s civil war has turned into a proxy war between Saudi Arabia and Iran


Turkey

Egypt The Sisi government is losing support and unrest continues in many areas of Egypt

2016’s failed coup and a renewed Kurdish insurgency have destabilized Turkey

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The Global Economy – Sluggish Growth Continues

• Global economic growth rates have hovered near 3% since 2012.

Key Developments Global Economic Growth

5%

6%

Global GDP Growth Rate

• Both developed and emerging economies are to blame for this sluggish growth.

• 2016 was a disappointing year for the global economy.

-1%

0%

1%

2%

3%

4%

5%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


• Growth has picked up in early 2017, but many risks remain in place.


Global Trade and Investment

• International trade levels have been depressed in recent years.

Key Developments Trade and Investment Data

20%30%

Foreign Trade Growth Rates

• Weak export markets and lower commodity prices have resulted in current trade levels being nearly 20% below those of 2011.

• Early 2017 has witnessed a recovery in trade

-30%-20%-10%

0%10%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

40%Foreign Investment Growth Rates


recovery in trade.

• Foreign investment levels have begun to rebound following a long slump. -30%

-20%-10%

0%10%20%30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 (est.)

2017 (est.)

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A Sluggish US Economy

• Economic growth rates in the United States were well below expectations in 2016.

Key Developments Economic Data

2%3%

US Annual GDP Growth Rates

p

• While consumer spending was strong, business investment levels were disappointing.

• There are signs of more robust growth in 2017 but a number of key

-3%-2%-1%0%1%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

5%US Average GDP Growth Rates


growth in 2017, but a number of key risks remain in place.

0%

1%

2%

3%

4%

1950s 1960s 1970s 1980s 1990s 2000s 2010's (est.)


Europe’s Economic Recovery Peaks

• After a series of crises, Europe’s recovery staged a mild recovery in 2015 and 2016.


1%2%3%

EU Annual GDP Growth Rates

• Europe’s recovery peaked with GDP growth of just around 2%.

• Growth was driven by peripheral economies such as Britain, Spain and Poland

-5%-4%-3%-2%-1%0%1%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

6%European Average GDP Growth Rates


and Poland.

• Many European economies continued to suffer from low competitiveness levels. 0%

1%2%3%4%5%

1950s 1960s 1970s 1980s 1990s 2000s 2010's (est.)

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China’s Slowdown Continues, But Steadies

• China’s slowdown continued in 2016, but for the moment, a hard-landing has been avoided.


10%12%

China’s Annual GDP Growth Rates

g

• However, many dangers (market bubbles, overcapacity and debt) remained firmly in place.

• Chinese exporters suffered from declining export competitiveness

0%2%4%6%8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

12%China’s Average GDP Growth Rates


declining export competitiveness and weak export markets.

• Consumer spending in China continued to grow at more than 10%. 0%

2%4%6%8%

10%

1950s 1960s 1970s 1980s 1990s 2000s 2010's (est.)


India Leads the Way

• Another year of 7%+ growth has entrenched India as the world’s fastest-growing large economy.


10%12%

India’s Annual GDP Growth Rates

g g g y

• However, a botched demonetization program in late 2016 had an impact on growth in recent months.

• Foreign investment levels after

0%2%4%6%8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

8%India’s Average GDP Growth Rates


• Foreign investment levels, after years of slow growth, have grown at a faster pace thanks to recent reforms.

0%1%2%3%4%5%6%7%

1950s 1960s 1970s 1980s 1990s 2000s 2010's (est.)

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Emerging Market Struggles Continue

• Outside of Asia, most large emerging markets continued to struggle to rebound from their recent


6%7%8%

Emerging Market GDP Growth Rates

ggslumps.

• Latin America’s economy has been in a two-year recession, led by Brazil’s economic crisis.

• Russia and East Europe remained

0%1%2%3%4%5%6%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

T k

GDP Growth Rates in 2016


• Russia and East Europe remained in a significant downturn.

• Sub-Saharan Africa and the Middle East continued to suffer from low commodity prices. -4% -2% 0% 2% 4%

Brazil

Nigeria

Russia

South Africa

Mexico

Turkey


The Powerful US Dollar

• The US dollar entered into a period of strength in the wake of the stoppage of the Federal Reserve’s

Key Developments Exchange Rate Data

Russian rubleBrazilian real

Exchange Rate Change vs. US$(Since January 2016)

pp gquantitative easing program in 2014.

• The election of Donald Trump in late 2016 resulted in another surge in the value of the US dollar.

• Most emerging market currencies

-30% -20% -10% 0% 10% 20% 30%Mexican pesoBritish poundChinese yuan

EuroSwiss franc

Australian dollarJapanese yen

Canadian dollar

Exchange Rate Change vs. US$(Since January 2014)


• Most emerging market currencies rebounded in 2016 (apart from the Mexican peso).

• The British pound and the euro have weakened in recent years.

-50% -40% -30% -20% -10% 0%Russian rubleMexican pesoBrazilian realBritish pound

EuroCanadian dollar

Swiss francAustralian dollar

Chinese yuanJapanese yen

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The Year in Oil Prices

• Oil prices trended slowly upwards for much of 2016.


55

60

Average Monthly Oil Prices (WTI-US$)

• Excess supply and relatively low demand levels combined to prevent a significant rise in oil prices for most of the year.

• A deal between OPEC and non-OPEC producers (led by Russia) in

40

45

50

55

MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR

Oil Production by Country in 2016 (Mil. BBL/Day)


OPEC producers (led by Russia) in late 2016 resulted in a 20% increase in oil prices.

• This oil deal could be extended until the end of 2017.

0 2 4 6 8 10 12

CanadaIran

ChinaIraqUSA

RussiaSaudi Arabia


Lower Oil Prices’ Impact on the Middle East and North Africa

• The region has lost an estimated $700 billion is lost oil revenues over the past three years.

Key Developments MENA Data

p y

• Major government spending cuts are being made across the region.

• Only a handful of oil-producing countries in the region can deal with these lower prices over the longer


these lower prices over the longer-term.

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What to Watch for Over the Next 12 Months

A Year of Massive Change or More of the Same?



The Key Political Issues of 2017

The Trump Administration’s Domestic and Foreign Impact

A More Insular United States?

The Wars in the Middle East and North Africa

Russia’s Opportunity

European Elections


China’s Growing Global Influence

Key Flashpoints for 2017

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The Domestic and Global Impact of the Trump Presidency

Domestic

Immigration restrictions

Global

Abandonment of trade deals

Major tax cuts and budgetary concerns

A potential showdown with

Healthcare uncertainty

Abandonment of climate change deals

Uncertainty over US military

Less support for democratic reforms


Hard-line on crime

A potential showdown with Republican-led Congress

A potential break with China

Uncertainty over US military alliances


A More Insular United States

Summary Impacted Regions• The 2016 presidential election highlighted the growing support for isolationism among the US public.

East Asia: The US prevents China from dominating the region, North Korea from disrupted the region, g p

• Isolationism was a major force in the US until the 1940s, but the US’ global role was much smaller then.

• “Pax-Americana” has allowed for the globally interconnected economy

p g ,and allows for the region’s export-based economies to flourish.

Europe: The US’ domination of European defense matters allowed the European Union to focus on economic and social issues.


the globally interconnected economy to flourish since World War Two.

• The US acts as the balancer of power in many regions of the world.

The Middle East: The US, for better or worse, has been the dominant power in the region, preventing large-scale conflicts between states.

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European Populism

Summary Impacted Countries• Far-right and far-left populism has been a powerful force in European politics far longer than in the US.

France: Far-right and far-left parties and leaders have the support of more than 40% of French voters.p g

• Populist parties and leaders have thus far been thwarted at the ballot box by coalitions of centrist parties.

• Populist governments are now in power across Central Europe and

UK: The decision to withdraw from the EU was driven by fears of immigration and a move towards isolationism.

Germany: Far right and far left


power across Central Europe and have gained in the polls in much of the rest of the region.

• Newer far-right and far-left parties are fragmenting European politics.

Germany: Far-right and far-left parties may win 25% of 2017’s national elections, their highest share since the early 1930s.


Russia’s Opportunity

Summary• A more insular US and an increasingly divided European Union are giving Russia a g gchance to reverse earlier losses of power and influence.

• Russia’s involvement in Ukraine’s conflict remains significant.


• Pro-Russian governments are in power across much of Central and East Europe, and Central Asia.

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The Wars in the Middle East and North Africa

Summary1. Libya2. Somalia3. Yemen4. Syria5. Iraq

• Five full-scale conflicts are underway in this region.

1

2

3

4 5


y g

• A sectarian conflict between Sunnis (led by Saudi Arabia) and Shiites (led by Iran) remains a major threat.


China Spreads its Wings

Summary• The potential reduction of the US role in world affairs and its new-found protectionism has opened new doors

Key Opportunities for China

A shift in the balance of military power in Asiap p

for China.

• Politically, China is likely to more aggressively project its power across Asia and in the Pacific.

• Economically China will move

Less support for rival territorial claims in Asia

The ability to shape the global

New trade and investment deals around the world


• Economically, China will move rapidly to secure new trade and investment deals, while moving to dominate such deals in Asia. The ability to expand its

influence further abroad

The ability to shape the global trade and investment rules

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Other Key Flashpoints to Watch

Other Key Flashpoints Factors

VenezuelaDifficult Economic Times: The economic struggles of many countries are raising political risk

Congo

P ki t

Central Asia

g plevels in those countries.

Democracy at Risk: Support for democracy has fallen in many countries (both democratic and un-democratic).


Malaysia

PakistanDiverse States Struggle: Countries with ethnic or religious divisions are finding it increasingly difficult to maintain centralized control.


The Key Economic Issues of 2017

More Sluggish Global Economic GrowthThe Leading Drivers of Global Economic Growth in 2017

The Threat of Protectionism

Slower Growth in EuropeAn Improved Near-Term Outlook for the US Economy

Japan Continues to Struggle

India Remains the Fastest-Growing Large EconomyChina Tries to Manage its Slowdown


Asia Remains the Center of Global Economic Growthg g y

Other Emerging Markets Rebound SlowlyWho Replaces China as the Center of Low-Cost Manufacturing

Key Risks Facing the Global Economy

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The Global Economy – Growth Accelerates, Slightly

• The global economy will accelerate slightly over the near-term.


3 0%3.5%4.0%

Global GDP Growth Rate (Y-Y)

• Higher near-term growth in the US and in major oil producing countries will drive growth to near 4% in early 2017.

• However, weaknesses in key developed economies and a slight

0.0%0.5%1.0%1.5%2.0%2.5%3.0%

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Q1 2017

Q2 2017

Q3 2017

Q4 2017


developed economies and a slight slowdown in China will pull down growth in the latter part of 2017.


The Key Drivers of Global Economic Growth in 2017

• China and North America will account for 45% of the increase in global economic


goutput in 2017.

• Developed economies in Asia and Europe will account for another 25%.

• Emerging markets are


• Emerging markets are contributing less to growth than they did in the early part of this decade.

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The Threat of Protectionism

Trade-Dependent Countries Impacted RegionsNorth America: Protectionism in the United States could derail trade the US’ most important actual and ppotential trade deals.

Europe: Protectionism in many European countries could tear apart the European Union.

Emerging Markets: Protectionist


Emerging Markets: Protectionist sentiment is on the rise in many non-export-dependent emerging markets.


An Improved Near-Term Outlook for the US Economy

• US economic growth is forecast to accelerate in the coming months.


2%3%

US Annual GDP Growth Rates

• Higher levels of business spending and investments will boost growth in the US.

• However, a weaker outlook for exports will prevent economic growth from returning to the 3%

-3%-2%-1%0%1%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


growth from returning to the 3% level.

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A European Slowdown

• Economic growth rates will hold relatively steady in 2017.


1%2%3%

EU Annual GDP Growth Rates

• Peripheral drivers of European growth will experience more sluggish growth in 2017.

• A weaker euro will boost export prospects, offsetting a sharper downturn for the European economy

Estimated GDP Growth Rates in 2017

-5%-4%-3%-2%-1%0%1%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


downturn for the European economy.

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Italy

France

UK

Germany

Netherlands

Spain


Japan’s Struggles Continue

• Japan’s 25-year economic stagnation will continue in the years ahead.


4%6%

Japanese Annual GDP Growth Rates

• Japan faces the world’s most-pressing demographic decline.

• Japan’s export-driven economy has been hit hard by competition from rivals in Asia

-6%-4%-2%0%2%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


from rivals in Asia.

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China Tries to Manage its Slowdown

• China’s official economic growth rates will continue to slide towards 6% over the next two years.


10%12%

China’s Annual GDP Growth Rates

y

• Actual GDP growth rates have hovered between 3% and 4% in recent years.

• China will continue to transition from an manufactured export driven

0%2%4%6%8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


from an manufactured-export-driven economy to a consumer-spending-driven economy.


India Remains the Fastest-Growing Large Economy

• India will continue to achieve economic growth rates of near 8% per year over the remainder of this


10%12%

India’s Annual GDP Growth Rates

p ydecade.

• Consumer spending will continue to be a leading driver of growth.

• India needs to develop an export-oriented manufacturing sector in

0%2%4%6%8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


oriented manufacturing sector in order to boost GDP growth rates to 10% or more.

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Asia Remains the Center of Global Economic Growth

• Most of Asia’s other larger economies are forecast to record relatively strong growth rates over


10%12%

Emerging Asian Annual Growth Rates

y g gthe near-term.

• Large emerging markets such as Vietnam, the Philippines and Indonesia will be among the world’s fastest-growing economies.

0%2%4%6%8%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)

Vi t



• Wealthier countries such as South Korea and Taiwan will experience more sluggish growth over the near-term.

0% 2% 4% 6% 8%

TaiwanSouth Korea

ThailandMalaysia

IndonesiaPhilippines

Vietnam


Other Emerging Markets Recover Slowly

• Emerging markets outside of Asia will continue to struggle to record high rates of growth.


6%7%8%

Emerging Market GDP Growth Rates

g g

• Competitiveness levels in many non-Asian emerging markets remain too low to attract high levels of foreign investment.

• Commodity prices are forecast to T k


0%1%2%3%4%5%6%

2009 2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


• Commodity prices are forecast to rise slowly over the near-term, holding down growth rates in many emerging markets.

-0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Brazil

Nigeria

South Africa

Russia

Mexico

Turkey

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Who Replaces China as the Hub of Low-Cost Manufacturing?

• Low labor and production costs

• Infrastructure that facilitates

Criteria Chinese Data

• Infrastructure that facilitates bringing goods from factory to port

• Access to key export markets

• Stable and secure location with low levels of political or labor unrest



Will Consumers Continue to Spend?

• Relatively high levels of consumer spending have prevented the global economy from falling into a major

Criteria Disposable Income Data

y g jslowdown.

• Consumer spending in developed economies has been strong in recent months.

• Consumer spending growth rates


• Consumer spending growth rates remain very high in China and many other leading emerging markets.

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Other Key Economic Risks to Watch

Other Key Economic Risks Factors

The Strong US DollarSluggish Growth: Businesses and investors are finding it harder to find growth markets, while government

Income Inequality

W k B ki S t

Lower Levels of Confidence

g , grevenues have not met expectations.

The Search for Save Havens: Political and economic uncertainty are pushing investors towards safe havens.


Weak Banking Sectors

Technology: Technological advancements are a major driver of income inequality and the rise of populism and protectionism.


Regional Outlooks for 2017 and Beyond


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North America – Economic Outlook

• Economic growth in the United States will accelerate over the near-term after a weak H1 2016.

Key Issues and Trends GDP Growth Forecasts

2 5%3.0%3.5%

Regional GDP Growth Rates

• Consumer spending in the US has met expectations, and business spending is set to rebound.

• Canada’s economy has been hit hard by low natural resource prices

Average Annual GDP Growth RatesNorth America

0.0%0.5%1.0%1.5%2.0%2.5%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


hard by low natural resource prices and a lack of export competitiveness in recent years.

• Mexico’s disappointing economic performance is expected to continue. 0% 1% 2% 3%

Canada

USA

Mexico

2012-2016

2017-2021


South America – Economic Outlook

• South America has had one of the world’s most disappointing regional economies in recent years.


5%6%7%


y

• Brazil remains in a deep recession and growth will be slow to return.

• Venezuela’s economy is in free-fall, while Argentina has slumped badly. Average Annual GDP Growth Rates

South America

-2%-1%0%1%2%3%4%5%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


• Natural-resource-rich Andean economies will rebound slowly from their recent slump.

-5% 0% 5%

VenezuelaBrazil

ArgentinaChilePeru

Colombia

2012-20162017-2021

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West Europe – Economic Outlook

• Growth rates during West Europe’s economic recovery peaked at around just 2%.


1 5%2.0%2.5%


j

• Economies that had driven the region’s recent growth, such as the UK and Spain, are set for slowdowns.

• A lack of critical reforms are holdingAverage Annual GDP Growth Rates

West Europe

-1.0%-0.5%0.0%0.5%1.0%1.5%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


• A lack of critical reforms are holding back growth in economies such as Italy and France.

-1% 0% 1% 2% 3%

ItalyGermany

FranceUK

NetherlandsSpain

2012-20162017-2021


Central and East Europe – Economic Outlook

• Central European economies staged a strong comeback over the past two years.


5%6%


p y

• Poland has been the region’s most successful economy, but growth there is slowing.

• Russia’s two-year recession will come to an end in 2017 but growth

Average Annual GDP Growth RatesCentral and East Europe

0%1%2%3%4%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


come to an end in 2017, but growth will be low.

-5% 0% 5%

RussiaCzech Republic

HungaryPoland

UkraineRomania

2012-2016

2017-2021

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Middle East and North Africa – Economic Outlook

• Low oil prices have caused major harm to the economies of the region’s leading oil producers.


5%6%


g g p

• Oil prices will rise slightly over the near-term, but weaker demand will prevent a major rise in oil prices.

• Growth rates will pick up in a number of non oil producing

Average Annual GDP Growth RatesMiddle East and North Africa

0%1%2%3%4%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


number of non-oil-producing countries, but not enough to lead to major reductions in poverty.

0% 2% 4% 6%

Saudi ArabiaIsraelUAE

TurkeyMorocco

Egypt

2012-20162017-2021


Sub-Saharan Africa – Economic Outlook

• Low commodity prices have led to lower growth rates across much of Sub-Saharan Africa.


6%7%8%


• A few economies have managed to grow at a very fast rate in recent years.

• South Africa remains in a major slump due to government

Average Annual GDP Growth RatesSub-Saharan Africa

0%1%2%3%4%5%6%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


slump due to government mismanagement of the economy and a weak mining sector.

• Low oil prices pushed Nigeria into a major recession. 0% 5% 10%

South AfricaNigeriaAngolaKenya

TanzaniaEthiopia

2012-20162017-2021

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Central and South Asia – Economic Outlook

• India has emerged as the world’s fastest-growing large emerging market.


8%

10%Regional GDP Growth Rates

• India’s strong growth is boosting trade and investment across much of South Asia.

• Central Asian economies have been hit hard by low natural

Average Annual GDP Growth RatesCentral and South Asia

0%

2%

4%

6%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


been hit hard by low natural resource prices and political uncertainty.

0% 5% 10%

Kazakhstan

Pakistan

Bangladesh

India

2012-20162017-2021


East Asia and Pacific – Economic Outlook

• China’s economic slowdown has had a major impact across East Asia and the Pacific.


7%8%9%


• Many Southeast Asian countries have managed to continue to record growth rates of nearly 6% per year.

• Japan’s economy has continued to grow at a very sluggish pace

Average Annual GDP Growth RatesEast Asia and Pacific

0%1%2%3%4%5%6%7%

2010 2011 2012 2013 2014 2015 2016 2017 (est.)

2018 (est.)


grow at a very sluggish pace.

0% 5% 10%

JapanAustralia

South KoreaIndonesia

ChinaPhilippines

2012-20162017-2021

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ConclusionsConclusions



Key Takeaways

Uncertainty over the policies of the new US administration

Populism, protectionism and nationalism are on the rise

Asia will continue to drive global growth

More sluggish growth for the global economy


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To learn more about ISA or for questions regarding this presentation, contact me at:

[email protected]

Or visit:


www.isa-world.com


The 2017 ISA Global Economic and Risk Outlook

Created by ISA (International Strategic Analysis)

Presented by Michael Weidokal, Executive Director, ISA

[email protected]

www.isa-world.com


54

SueFlynn

Text Box

table of contents

1

World Rubber Market : Trends and Perspectives

Mr. Salvatore Pinizzotto

Secretary-General

International Rubber Study Group (IRSG)

IISRP 58th Annual General Meeting – Taipei

www.rubberstudy.com

International Rubber Study Group


Who are we?

Established in 1944 as an inter-governmental organisation,

headquartered in London, UK

As of July 2008, the Group has been based in Singapore.

IRSG is the forum for discussion of matters affecting the supply

and demand for natural as well as synthetic rubber.

Authoritative source of statistical data and analysis for all aspects

of the rubber industry.

IRSG has 36 member countries.

IRSG has around 100 industry members as Associates.

55

2


Market Transparency

Statistical Information


Rubber Statistical Bulletin

World Rubber Industry Outlook

Rubber Industry Report

Monthly Rubber Bulletin

Projects

56

3


Market Transparency : Why IRSG?

Reliable forecasting starts with quality data.

The reliability and completeness of data depends largely on

both the country supplying it and the organizations collecting it.

Inconsistent data can lead rubber producers, consumers and

investors to misread the true supply and demand trends,

prompting them to make ill-informed decisions that can

negatively impact the rubber economy.

Increased transparency of data should help to moderate

unwanted price volatility, promote informed investment

decisions and, ultimately, stabilize the rubber market.

IRSG as a Forum

Producers Consumers

Traders

Governments Processors

IRSG

“Change is the law of life. And those who look only to the past or present

are certain to miss the future.”

(John F. Kennedy)

57

4

Themes

World supply-demand of rubber

Natural rubber land use and supply relationship

Prospects and challenges

58

5

Natural Rubber Price Relationship

0

1000

2000

3000

4000

5000

6000

7000

Jan '10 Jan '11 Jan '12 Jan '13 Jan-14 Jan-15 Jan-16 Jan-17

NR-SGX TSR20 SBR-USA BD-Asia


59

6


Production Capacity

Thailand has 36% NR capacity

while China has 50% SR capacity

of the Asia-Pacific region

93%

5% 3%

NR Capacity

Asia -Pacific EMEA Americas

56% 24%

20%

SR Capacity


60

7

Global Natural Rubber Production (KT)

0

2000

4000

6000

8000

10000

12000

14000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Thailand Indonesia Vietnam China India Malaysia

Myanmar Sri Lanka Philippines Cambodia Côte d'Ivoire ROW

Natural Rubber- Supply Chain Facts

• Around 12 million ha area (estimated)

• Production is predominantly from South-East Asia

• Around 90% of holding units and 85% production are from

smallholdings

• Average size of holdings varies from 0.5 ha- 10 ha

(depending on country definition)

• Wide variation in smallholders’ productivity across

countries

• Presence of multiple intermediaries between producer

and processor

61

8

NR Supply Chain Challenges

• Productivity

• Quality/consistency of raw material

• Rubber area expansion to marginal land

• Price variability

• Cost reduction

Land Use Challenges

Wide spread

rubber

expansion to

marginal

land

Productivity

• older plantations

• labour shortage

• aging farmers

• second generation

abstains from farming

• Climate factors

62

9

Natural Rubber Supply Relationships

-1000

0

1000

2000

3000

4000

5000

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

1990 1995 2000 2005 2010 2015

US

D/t

on

ne

s

%

Price

NR Area: Trend Across Regions (KHa)

0

2000

4000

6000

8000

10000

12000

14000

2000 2005 2010 2015 2016

Asia-Pacific Africa Latin America

63

10

NR Area : Land Use Trend (000’ha)

0

2000

4000

6000

8000

10000

12000

14000

1990 1995 2000 2005 2010 2015

Thailand Indonesia Malaysia

Vietnam CAMAL Row

Historically (1990s to mid 2000s), land use changes in Malaysia and Indonesia were in favour of crop shift

towards Oil Palm; however, cyclical new planting investments happened in both traditional/non-traditional

regions.

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1990 1995 2000 2005 2010 2015

Changes in Mature and Immature Area

IM Mature

Natural Rubber Consumption

72%

13%

15%


72%

8% 1% 6%

2% 2%

Tyre Hose&Belt

Other GRG Gloves

Thread&Foam Others

Tyre producers purchase about

70% of total natural rubber

placed on the global market

64

11

Global Natural Rubber Consumption (KT)

0

2000

4000

6000

8000

10000

12000

14000

2008 2009 2010 2011 2012 2013 2014 2015 2016

China EU-28 India USA Japan Indonesia Thailand Malaysia Brazil S.Korea ROW

Natural Rubber Trade

0

500

1000

1500

2000

2500

3000

3500

4000

2008 2010 2012 2014 2016

NR Export

Thailand Indonesia

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2008 2010 2012 2014 2016

NR Import

China

65

12

Global Natural Rubber Balance (KT)

-600.00

-400.00

-200.00

0.00

200.00

400.00

600.00

800.00

1000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F

Global Average GDP Growth (IMF, %)

-1

0

1

2

3

4

5

6

1990 1995 2000 2005 2010 2015 2020

IMF Oct 2016

66

13


IMF Boosts Global Growth Forecast to

3.5% Despite Geopolitical Angst

(WSJ)

‘Sword of protectionism’ hangs over

global recovery, says IMF (FT)

IMF raises China growth outlook but

warns of risk of 'disruptive adjustments‘

(Reuters)

China Vehicles in Use, (millions of units)

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

2000 2005 2010 2015 2020 2025

PC

LCV

M/HCV

67

14

China Vehicles Production Growth, (%)

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

2008 2010 2012 2014 2016 2018 2020 2022 2024

PC CV

Tyre Production Growth

68

15

Impact of Area Expansion: Thailand (Ha)

2012 surge in planting reported in Southern region reference to

Agriculture Statistics, Thailand

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

2006 2008 2010 2012 2014 2016 2018 2020

Planted Area (Ha)

South

Central Plain

North East

North

Impact of Area Expansion: Thailand (MT)

Reported 2012 plating surge might result in huge production

increase near to 6 million tonnes by the end of the decade…

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

2006 2008 2010 2012 2014 2016 2018 2020

Production (MT)

South

Central Plain

North East

North

69

16

Challenges

NR production overcapacity.

Vehicle growth projections in China – are they aligned with

the New Normal economic outlook?

“Regenerated/Reclaimed/Recycled Rubber” in China

reported to be up to 4MMT and backing off virgin rubber

demand.

Prospects

Growing demand but only slow closure of the overcapacity

gap.

Rationalisation and consolidation in the value chain.

Switch from rubber to other agricultural crops – driven by

policies and/or economic reality?

Drive for productivity improvements to help farmers.

Consumption moving towards site of production to minimise

logistics inefficiencies and costs.

70

17

Thank You for Your Attention


71

SueFlynn

Text Box

table of contents

4/17/2017

1

Global Synthetic Rubber Overview

IISRP AGM 201726 April 2017 – Taipei, Taiwan

Agenda

Topics

Global Capacity & Main Players

New Projects & Expansions

Supply & Demand

Challenges & Trends

2 Confidential

Challenges & Trends

72

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2

Agenda

Topics



Supply & Demand

Challenges & Trends

3 Confidential

Challenges & Trends


2016 G loba l Capac i ty

4 ConfidentialSource: World Rubber Statistics 2016 - IISRP

73

4/17/2017

3

Capac i ty Expans ions , kt



2016 Globa l Capac i ty



74

4/17/2017

4




Main P layers


2016 PRODUCTION CAPACITY

1,991

1,520 1,301 1,226

60

220

50

56

23 COMPANIES = 80%

8 Confidential

793 730 725 692 672 593 588 565 510 500 489 454 415 370 325 320 319 310 270

Source: World Rubber Statistics 2016 - IISRP

75

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5




Agenda

Topics



Supply & Demand

Challenges & Trends

10 Confidential

Challenges & Trends

76

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6


G loba l Capac i ty

1,000

2,000

3,000

4,000

5,000

6,000

BR Global Capacity and Demand, kt

11 Confidential


-1,000

02010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Capacity New projects/expansions Iddled Demand


BR Id led fac i l i t ies - Ch ina

Company Capacity kt/yr Idled dateFujian Fuxiang Chemical 50 Dec - 2013

Sinopec Baling Company 60 Dec - 2013

YPC – GPRO Rubber 100 Jan - 2014

PetroChina Jinzhou 50 Mar - 2014

Shandong Wanda Chemical 30 Apr - 2015

Sh d H N M t i l 100 M 2015

12 Confidential

Source: IISRP China

Shandong Huamao New Materials 100 Mar - 2015

Sinopec Shanghai Gaoqiao 120 Jun - 2016

77

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7


G loba l Capac i ty

ESBR Global Capacity and Demand kt

1,000

3,000

5,000

ESBR Global Capacity and Demand, kt

13 Confidential


-1,0002010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Capacity New projects/expansions Closure Demand

Globa l Capac i ty


SSBR Global Capacity and Demand, kt

0

1,000

2,000

3,000

p y

14 Confidential


02010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Capacity New projects/expansions Demand

78

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8


G loba l Capac i ty

EPDM Global Capacity and Demand kt

0

500

1,000

1,500

2,000

2,500

EPDM Global Capacity and Demand, kt

15 Confidential


-500

02010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Capacity New projects/expansions Closure Demand


G loba l Capac i ty

NBR Global Capacity and Demand kt

0

250

500

750

1,000NBR Global Capacity and Demand, kt

16 Confidential


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


79

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9


G loba l Capac i ty

SBC's Global Capacity and Demand kt

0

1,000

2,000

3,000

SBC s Global Capacity and Demand, kt

17 Confidential


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019



G loba l Capac i ty

IR Global Capacity and Demand kt

0

250

500

750

1,000

IR Global Capacity and Demand, kt

18 Confidential


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


80

4/17/2017

10


G loba l Capac i ty

IIR Global Capacity and Demand kt

0

500

1,000

1,500

2,000

IIR Global Capacity and Demand, kt

19 Confidential


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Agenda

Topics



Supply & Demand

Challenges & Trends

20 Confidential

Challenges & Trends

81

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11

Overcapacity ‐ confirmad facilites idled (China)

Demand Slight recovery during 2016 AP & EMEA

GLOBAL HIGHLIGHTS

EMEAAMERICAS ASIA PACIFIC

BR ‐ Polybutadiene Rubber

BR Global Es t imat ion

Supply & Demand

Demand ‐ Slight recovery during 2016 ‐ AP & EMEA

Supply 67% Operating rate ‐ Improving

Demand

GLOBAL SUPPLY & DEMAND CHINA

18% 22% 60%

61%24%15%

Imp

Exp

21 Confidential

Source: IISRP ChinaSource: IISRP Model

2009 2010 2011 2012 2013 2014 2015 2016

Supply Demand Linear (Demand)

Demand

Supply

2016 2015 2014 2013

Overcapacity ‐ Asia Pacific

D d Sli ht d i 2016 A i P ifi

ESBR ‐ Styrene Butadiene Rubber (Emulsion) HIGHLIGHTS

AMERICAS EMEA ASIA PACIFIC

ESBR Global Es t imat ion

Supply & Demand

Demand ‐ Slight recovery during 2016 ‐ Asia Pacific

Supply 65% Operating rate ‐ Stagnant

Demand

17% 21% 62%

19% 18% 63%


Imp

Exp

22 ConfidentialSource: IISRP ChinaSource: IISRP Model

2009 2010 2011 2012 2013 2014 2015 2016


Demand

Production

2016 2015 2014 2013

82

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12

Overcapacity ‐ Asia Pacific

D d I i i ll i

SSBR ‐ Styrene Butadiene Rubber (Solution) HIGHLIGHTS


SSBR Globa l Es t imat ion

Supply & Demand

Demand: Improving in all regions

Supply 67% Operating rate ‐ Improving

Demand

30% 26% 44%

26% 32% 42%


Imp

Exp


2009 2010 2011 2012 2013 2014 2015 2016


Demand

Production

2016 2015 2014 2013

Overcapacity

D d I i AP d EMEA

EPDM ‐ Ethylene‐Propylene‐Diene‐Monomer HIGHLIGHTS


EPDM Global Es t imat ion

Supply & Demand

Demand: Improving ‐ AP and EMEA

Supply 68% Operating rate

Demand

38% 24% 38%

28% 29% 44%


Imp

Exp


2009 2010 2011 2012 2013 2014 2015 2016


Demand

Production

2016 2015e 2014 2013

83

4/17/2017

13

Demand: Sluggish ‐ Growth in AP

68% O ti t

NBR ‐ Nitrile Butadiene Rubber HIGHLIGHTS


NBR Globa l Es t imat ion

Supply & Demand

68% Operating rate

Supply

Demand

5% 32% 62%

17% 27% 56%


Imp

Exp


2009 2010 2011 2012 2013 2014 2015 2016


Demand

Production

2016 2015 2014 2013

Demand: Improving in all regions

83% O ti t

SBS ‐ Styrene Butadiene Block Copolymer HIGHLIGHTS


SBS Globa l Es t imat ion

Supply & Demand

83% Operating rate

Supply

Demand

14% 15% 71%

20% 22% 58%


Imp

Exp


2011 2012 2013 2014 2015 2016


Demand

Production

2016 2015 2014 2013

84

4/17/2017

14

Agenda

Topics



Supply & Demand

Challenges & Trends

27 Confidential

Challenges & Trends

Cha l lenges -Overcapac i ty

Challenges

Key points•SRI 2016 global

28 Confidential

operating rate 70%•Overinvestment in China

•Tire elastomers have been great contributors

85

4/17/2017

15

Challenges

Chal lenges -Overcapac i ty

29 ConfidentialSource: ICIS Magazine March 2016.

Challenges

Chal lenges -Overcapac i ty

10,000

15,000

20,000SR Global Capacity, Supply & Demand

2016 (kton)

30 Confidential

-

5,000

ESBR BR SSBR EPDM NBR SBC's CR IR IIR Global

Capacity Supply Demand

86

4/17/2017

16

Challenges

Chal lenges -Volat i l i ty

Key pointsOil i t


31 Confidential

•Oil prices - extreme volatility

•BD tight supply (outages)

•SR producers increasing prices



Challenges

Chal lenges -Volat i l i ty

32 Confidential

87

4/17/2017

17

Challenges

Chal lenges –NR Market Dynamics

Key points•NR overcapacity

Key points•Oil prices - extreme volatility


33 Confidential

•Majority of demand is driven by Tire Industry

•Enough substitution to be close price with SR

volatility•BD tight supply (outages)

•SR producers increasing prices



Trends

Trends –T i re Sector

Key points•NA and WE expecting growth during 2017 l

34 Confidential

(replacement)•CE, EE & Russia with solid performance on PVTires

•PVTires solid growth in ME

88

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18

Trends

Trends –T i re Sector

35 Confidential

Trends

Trends –Auto Indust r y

Key Points•SRI 2016 global

Key points• LV Assembly expecting CAGR 3%

36 Confidential



•Higher Capital spending of top 10 OEM’s on R&D and M&A.

• Forces transforming mobility

89

4/17/2017

19

Trends


37 Confidential

Source: PwC Autofacts 1Q 2017

Trends


38 Confidential

Source: Capital IQ

90

4/17/2017

20

Trends


39 Confidential

Source: Deloitte University Press

Trends

I ISRP- Webinars

IISRP Webinars: Recent Developments & Applications in Elastomers &

Synthetic Rubber

You are invited to register for IISRP's

"RECENT DEVELOPMENTS AND

APPLICATIONS IN ELASTOMERS AND

SYNTHETIC RUBBER" webinar

40 Confidential

Source: iisrp.com

Presented by: Dr. Walter Ramirez

Chief Innovation Officer, Founder of Innventik

Please join us on Wednesday May 10,2017 at

09:00 CST

In this Webinar, you will gain insight on:

Relevant technology activity, major drivers

and trends

Sustainability: Renewable monomers and

biobased solutions

Dr. Walter Ramirez

is Chief Innovation

Officer and Founder

of Innventik

91

4/17/2017

21

Closing

Conc lus ions

Global SR Consumption Forecast 2017-2021 (kt)

5 000

10,000

15,000

41 Confidential

0

5,000

2011

2012

2013

2014

2015

2016

2017f

2018f

2019f

2020f

2021f

Source: IISRP SR Consumption Forecast

*Includes BR, EPDM, ESBR, NBR, SBS & SSBR

Closing

Conc lus ions

• Challenging margins

• Fierce competition

42 Confidential

92

4/17/2017

22

Closing

Questionswww.iisrp.com

roxanna@iisrp .com

3535 Briarpark Suite250Houston, TX 77042

+1 713 783 1703

43 Confidential

93

SueFlynn

Text Box

SueFlynn

Text Box

table of contents

4/23/2017

1

www.icis.com

Other End Use Market Segment Outlook – Rubber Gloves

No Dock MoungSenior ConsultantICIS Analytics & Consulting

IISRP AGM 2017

Taipei, Taiwan

www.icis.com

ICIS is part of RELX GroupRELX is the world-leading provider of information solutions for professional customers

across industriesReed Business Information provides data, analytics and insight that enable customers to

evaluate and manage risks, and develop market intelligence, supporting more confidentdecisions, improved economic outcomes, and enhanced operational efficiency.ICIS is the world's largest petrochemical market information provider, and has fast-growing

energy and fertilizer coverage. Its aim is to give companies in global commodities marketsa competitive advantage by delivering trusted pricing data, high-value news, analysis andindependent consulting.

94

4/23/2017

2

www.icis.com

Over 9,200 price assessments in 1,200reports covering 180 commodities

More than 30 years of industry insight and data

Over 100,000 industry customers

Customers include virtually every major chemical company

Weekly contact with thousands of market participants

17,000+ annual news stories

700+ global employees

ICIS - Global Presence, Local Insight

www.icis.com

ICIS has Coverage Along the Entire Value Chain

Historical supply & demand database

Forecast supply & demand database

24 hour real-time news

Market insight & analysis

Training & conferences

Single client bespoke consultancyPrice reports

Margin reports

Dashboard

Price alerts Plant capacities, outputs & shutdowns

Price indices

Long term price forecast

Consulting and Long-Term

Supply & Demand

Data Analysis and Short-Term

Supply & DemandMarket NewsPrice Assessments

In the Industry. On the ground. Powered by Data. Driven by Insight.

95

4/23/2017

3

www.icis.comwww.icis.com 5

Rubber Gloves Demand

Raw Materials Demand & Supply

Summary

Agenda

www.icis.com

Rubber Gloves Demand

96

4/23/2017

4

www.icis.com

Demand increased by nearly 4-folds in 2000-2015, an despite changes Europe and North America together account for the majority share of the market.

North America

45%

South & Central America

6%

Europe35%

Former USSR

2%Africa

2%

Middle East1%

North East Asia4%

Asia and Pacific

5%

Regional Shares, 2000

Dramatic Regional Transformation

• In 2010, North America and Europe together accounted for 80% of the total demand

• In 2016, the share decreased to 61%, losing to all other regions

• South & Central America made the most gains, increasing to 13% from 6%

0

50

100

150

200

250

2000 2003 2006 2009 2012 2016

Billi

on p

iece

s

World Total Rubber Gloves Demand

N America S & C America Europe F. USSRAfrica Middle East NE Asia Asia and Pacific

>155 billion pieces increase in 16 years, over 4-folds increase

N America35%

S & C America

13%

Europe28%

F. USSR3%Africa

3%Middle East

3%

NE Asia9%

Asia and Pacific

6%

Regional Shares, 2016

-20%

-10%

0%

10%

20%

30%

0

50

100

150

200

250

2000 2002 2004 2006 2008 2010 2012 2014 2016

Billi

on P

iece

s

World Total Rubber Gloves Demand

Total Growth Rates

The rubber gloves industry is one of the most dynamic of the rubber industries, CAGR 9.3%, 2000-2015.

However, it is not recession proof.

www.icis.com 8

To understand the dynamism of the industry is to understand the changes that have taken place to the population and wealth of the world within the context of the publicly acknowledged awareness and need for protection against communicable diseases. Population is the potential.

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mill

ions

World population rises above 6.0 billion

Asia & Pacific has the largest population: 1.6 billion

Africa joins NE Asia and Asia & Pacific in the 1.0 billion ClubAsia & Pacific’s

populations tops 2.0 billion

India joins China in the 1.0 billion club

South & Central America surpasses North America: 425 million vs 424 million

World population rises above 7.0 billion

There are now more 500 million people in South & Central America

There are 282 million people in the Former USSR

There are 282 million people in the Former USSR

97

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5

www.icis.com 9

Wealth is the ability. Absolute wealth has more than doubled in 1990-2016, however the relative wealth has been lagging behind, increasing by less than 1.5 times.

5,000

6,000

7,000

8,000

9,000

10,000

11,000

20

30

40

50

60

70

80

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

GDP

per C

apita

, US$

, Con

stan

t 201

0

GDP,

US$

Trill

ion,

Con

stan

t 201

0

World GDP per Capita

The wealth of the world reaches US$40.0 trillion for the first time.

World GDP/K is US$7,079 in 1990

World GDP/K shrinks for the first of 3 times in 1990-2016.

World ushers in the 3rd

millennium with GDP/K increasing above US$8,000

Following year, the absolute wealth of the world hits the US$50.0 trillion mark.

Absolute wealth of the world shrinks.

GDP/K of the world decreases by US$275

GDP/K of the world will be US$10,293

US$70.0 trillion mark is breached.

www.icis.com 10

The real story of world population growth has been about the rise of Africa, and the continuation of expansion in Asia.

368

490

356

504

North America

565622 282

284

629

1,164

134236

1,585

2,377South & Central America

Asia & Pacific

1,370

1,619

Africa: Population expands by 85% in 1990-2016.

Asia & Pacific: 50% growth = 792 million NE Asia: Comparatively

slower rate of growth, but still adds 248 million

EuropeFormer USSR

Africa

North East Asia

Middle East

Top = 2016Bottom = 1990

98

4/23/2017

6

www.icis.com 11

20.0

4.3

20.1

2.1 2.3 2.5

16.6

7.1

North America


Europe

Africa

Middle EastFormerUSSR

Asia & Pacific

North East Asia

Absolute Wealth, US$, Trillion

Top = 2016Bottom = 1990

40,862

8,530

32,250

7,4621,964

10,753 10,2593,004

North America


Europe

Africa

Middle EastFormerUSSR Asia &

Pacific

North East Asia

GDP/K, US$

Top = 2016Bottom = 1990

Europe and North America now share the absolute wealth space with North East Asia, but not in relative terms.

• Asia and Pacific increased its absolute wealth by more than 3.5 times

• NE Asia has added an extra US$10.4 trillion, in 1990-2016.• Europe and North America still accounts for the majority share of

the absolute wealth (53% in 2016).

• The GDP/K of the most populous regions are disproportionately small

• Africa’s GDP/K is US$1,964, while that of the Asia and Pacific is US$3,004

www.icis.com 12

Growing population (the number of potential consumers) and wealth (the ability to buy the goods) came together and drove the rubber gloves industry.

0

50

100

150

200

250

0 10000 20000 30000 40000 50000 60000 70000

Piec

es p

er P

erso

n/Ye

ar

US$/Person

GDP K/Rubber Gloves Consumption per Person/Year

99

4/23/2017

7

www.icis.com 13

But, what now? Will the demand continue to grow, and where will it come from?

-5%0%5%10%15%20%25%30%35%40%45%50%

0

100

200

300

400

500

600

1960 1970 1980 1990 2000 2010

Perc

enta

ge

Num

ber o

f Veh

icles

per

Per

son

Total Vehicles in Use, Japan, 1960-2015

Vehicles in Use Growth Rates

200

250

300

350

400

450

500

550

600

650

20,000 25,000 30,000 35,000 40,000 45,000 50,000

Num

ber o

f Veh

icles

per

Per

son

GDP per Capita

Total Vehicles in Use, Japan, 1980-2015

• Yes, but there is an upper limit neither population or wealth growth could breach – example from an older, established industry

• Japan – measured against population, and against wealth both show a ceiling• Cross-sectional example – Japan, France and Germany all show that an upper limit was reached in the early

1990s.

60

80

100

120

140

160

180

200

220

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Inde

x

Passenger Car Sales

Japan Germany France

www.icis.com 14

• There are signs of rubber gloves demand coming close to hitting a ceiling in North America and Europe

• Trend of rubber glove demand per person has more-or-less been flat since the late-2000.

• All other regions are showing firming increasing trend, except for the Former USSR.

• The “gap” between the fastest growing and largest populated regions and the North America and Europe are huge, representing space for potential growth of the regions.

[X VALUE][BUBBLE SIZE]









-20

0

20

40

60

80

100

120

140

160

180

Glov

es/P

erso

n/Pi

eces

Rubber Gloves Consumption per Person – Regional 201620

40

60

80

100

40

60

80

100

120

140

160

2000 2002 2004 2006 2008 2010 2012 2014 2016

Euro

pe

Nort

h Am

erica

Rubber Gloves/Person/Year

N America Europe

0

10

20

30

40

50

60

2000 2002 2004 2006 2008 2010 2012 2014 2016

Rubber Gloves/Person/Year

S & C America F. USSR Middle East

0

2

4

6

8

0

5

10

15

2000 2002 2004 2006 2008 2010 2012 2014 2016

Afica

& A

sia a

nd P

acifi

c

Nort

h Ea

st A

sia

Chart Title

NE Asia Africa Asia and Pacific

100

4/23/2017

8

www.icis.com 15

Some growth scenarios built around the gloves/person/year of regions and constant growth: 2016 gloves data, population, and the assumption that the world consumption will reach one of the higher numbers.

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

US$

Regional – GDP per Capita, 2030North America

South & CentralAmericaEurope

Former USSR

Africa

Middle East

North East Asia

Asia & Pacific

• By 2030, the GDP/K gap between the Africa and Asia and North America and Europe will remain substantial.

• In fact, GDP/K of North East Asia will be lower than Europe’s in 2016.

• This makes the “Europe” and “North America” scenario being achieved highly unlikely within the next fourteen years

y = 7.038x0.4546

R² = 0.9193

05

10152025303540

2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

Piec

es

World - Rubber/Person/Year

0200400600800

100012001400

Europe North America Constant,2016

9.3% Extrapolation

Billi

on P

iece

s

World - Rubber Gloves Demand Scenarios

2025 2030

Most Likely Scenarios

www.icis.com 16

The most likely scenarios are the “Extrapolate” and the “9.3%”, and for the demand to fall within the range between the two.

0

50

100

150

200

250

300

350

400

450

500

0

100

200

300

400

500

600

700

800

2000 2005 2010 2015 2020 2025 2030

GAP,

Billi

on P

iece

s

Billi

on P

iece

s

Rubber Gloves World - Two Scenarios, Pieces

GAP 9.3% Extrapolate

GAP is the difference between the 9.9% (High) and Extrapolate (Low) scenarios.

101

4/23/2017

9

www.icis.com

Raw Materials Demand & Supply

www.icis.com 18

Demand for NBR Latex has been growing rapidly, and the future appears bright.

0

100

200

300

400

500

600

700

800

900

1000

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016

Tota

l, '0

00 To

nnes

'000

Tonn

es

Rubber Gloves World - Rubbers Demand

NBR Latex NR Latex Total

0

500

1000

1500

2000

0

1000

2000

3000

4000

2000 2005 2010 2015 2020 2025 2030

GAP,

'000

Tonn

es

'000

Tonn

es

Rubber Gloves World - Total Rubber Weight

GAP 9.9% Extrapolate

It is assumed that the weight of the gloves will continually decrease through to 2030.

0

500

1000

1500

2000

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

'000

Tonn

es

Rubber Gloves World – NBR Latex Demand

Constant share between natural rubber and NBR has been assumed for 2016-2030.

102

4/23/2017

10

www.icis.com 19

The supply of natural rubber latex is highly concentrated, with Thailand accounting for 88% of it in 2015. However, the gloves industry is adequately supplied with natural rubber latex: it took up only 53% of the total exports.

0

100

200

300

400

500

600

700

800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

'000

Tonn

es

NR Latex Exports - Leading Countries

Guatemala Liberia Malaysia Thailand Vietnam OthersGuatemala

3%

Liberia0%

Malaysia3%

Thailand88%

Vietnam5%Others

1%

NR Latex Exports - Leading Countries, 2015

• Guatemala, Liberia, Malaysia and Vietnam are the other significant sources of Latex

• However, the Latex from Guatemala and Liberia are nearly all consumed outside Asia

• Malaysia and Vietnam, the majority of the exports are going to the non-rubber gloves producing countries.

www.icis.comCopyright © 2016 ICIS – Private & Confidential

There are six countries with NBR latex capacity, all in Asia, but it is more evenly distributed, with Malaysia, South Korea and Taiwan the leading producers.

*Volumes in ‘000 tonnes

16 56

2010 2016

China32 41

2010 2016

Japan

92 136

2010 2016

Malaysia

52

257

2010 2016

South Korea

44173

2010 2016

Taiwan

0 45

2010 2016

Thailand

China9%

Japan7%

Malaysia20% South Korea

31%

Taiwan26%Thailand

7%

NBR Latex Capacity - 2016620,000 Tonnes

103

4/23/2017

11

www.icis.com 21

There is sufficient NBR latex capacity at present, but additional capacity will be required from 2022 onwards. By 2025, incremental demand is expected be large enough to require additional 2 world scale plants.

0102030405060708090100

0

100

200

300

400

500

600

700

2010 2011 2012 2013 2014 2015 2016

Oper

atin

g Ra

tes,

%

'000

Ton

nes

Rubber Gloves World – NBR Latex Market Situation

Capacity Gloves Consumption Operating Rate

0200400600800

100012001400160018002000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

'000

Ton

nes

Rubber Gloves World – NBR Latex Demand and Supply

NBR Latex Range Capacity Average

Confirmed world NBR latex capacity – 2018, 753,000 tonnes

World scale plant (90,000 tonnes) requirements

2

6

www.icis.com

Summary

104

4/23/2017

12

www.icis.com 23

• The rubber gloves industry is a dynamic one, having expanded at CAGR 9.3% in 2000-2016

• The key demand drivers are growing population, and increasing wealth or GDP/K

• At present and in the recent past, the demand has been driven by Europe and North America

• Going forward, the potential lies with Asia, especially Asia and Pacific• NBR latex has been winning market share of the raw material supplies• Of course, new investments will be needed over the medium-to-longer

term in NBR latex capacity

Summary

www.icis.com

THANK YOU

Contact us

ICIS Consulting: Powered by Data. Driven by Insight.

No Dock MoungSenior ConsultantICIS Analytics & ConsultingTel: +65-6780-4833 (DID)

Email: [email protected]

105

SueFlynn

Text Box

table of contents

4/26/2017

1

Global tyre market outlookGlobal tyre market outlook

Robert Simmons

LMC Internationalwww.lmc.co.uk [email protected]

Forecasts Services Independent

LMC is the leading economic & business consultancy for the tyre, rubber and automotive industries

About LMC

• Rubber− Natural rubber− Synthetic rubbers

• Tyres− Sales & production− Size segments− LVs & MHCVs− Motorcycles

• Off-the-shelf reports• Bespoke consulting• Event presentations• Webinars

We do not produce, trade or broker.

LMC’s analysis and advice is entyrely objective.

2 Confidential

• Automotive− Sales & Production− Engine/Transmission− LVs, MHCVs & Buses− Market trend analysis

Oxford Detroit New York Frankfurt Kuala Lumpur Bangkok Singapore Shanghai

106

4/26/2017

2

Future Tyre industry Outlook

Future tyre demand is determined by:• OE tyres

R l t t (th l t t) d d• Replacement tyres (the largest segment) depend upon:

• Vehicle parc (vehicles in use)

• Replacement ratio (how often tyres are replaced)

Both OE and replacement tyre sales are dependent upon on vehicle densities (vehicles per 1,000 population)

Future tyre production

3 Confidential

Future tyre productionTyre trade then determines where tyres are produced.

Import duties are changing global trade and production patterns

GDP per capita determines tyre demand

USA

900

1000

Light vehicle densityRapid growth Mature

MexicoRussia Taiwan

KoreaMalaysia

UKJapan

Spain GermanyFranceItaly Canada

400

500

600

700

800

900

o of

LV

per 1

,000

pop

ulat

ion

4 Confidential

IndiaIndonesia

China

ThailandTurkeyBrazil

Mexico

0

100

200

300

0 10,000 20,000 30,000 40,000 50,000 60,000GDP per Capita

N

107

4/26/2017

3

Emerging markets were the engine of growth but this has slowed

The world changed after financial crisis of 2008/09

10% 10% 8%5 years of slowing growth

2000-12 2010-18

0%

2%

4%

6%

8%

GDP

grow

th (%

)

0%

2%

4%

6%

8%

GDP growth (%

) 3%

4%

5%

6%

7%

GDP

grow

th (%

)

y g g

World

Emerging Markets

5 Confidential

-4%

-2%

2000 2002 2004 2006 2008 2010-4%

-2%

Advanced Emerging World

0%

1%

2%

2010 2012 2014 2016 2018 2020

Advanced

Boost to growth

Growth in the emerging markets has not been uniform

10%

12%

Emerging market growth is picking up in 2017

0%

2%

4%

6%

8%

10%

GDP

grow

th

Emerging

Slow down Asia first

6 Confidential

-4%

-2%

%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019India CIS China S America

Slow down Asia first then Brazil and Russia

108

4/26/2017

4

Growth trends in NA and Western Europe started to weaken in 2016; hugegain in China caused by tax incentive. Softening looks set to go further in2017, but other markets to take up some slack.

World2.1%

4.6%

2015 2016

Global Vehicle market – 7th year of growth

North America

Asia-Pacific minus China

C&E EuropeWestern Europe

China

2%

6%2%

9%6%

-13%

0%

5%

12%

2015 2016

2015 20162015 2016

2015 2016

7 ConfidentialSource: LMC Automotive

ChinaSouth America-1%

-12%

2015 20162015 2016

-21%

Year-on-year change in Light Vehicle sales volume (thousands)

Asia-Pacific 3.3 mn

China +3,100kIndia +220k

Which markets moved most in 2016?

Western Europe

North America

C&E Europe

Italy +290kGermany +170k

Mexico +250k

Russia -180kPoland +70k

Czech Rep. +30k

8 ConfidentialSource: LMC Automotive

MEA

South America

+500kZero-500k +1,000k +1,500k

Brazil -490k

109

4/26/2017

5

The pre-2017 themes of expansion in North America, Western Europe andChina are expected to begin to dissipate this year, while signs of recoveryin Brazil and Russia are also expected to begin to emerge.

World

2.1%4.6% 2.4%

15 16 17F

Global Vehicle market, now for 8th year of growth

North America

Asia-Pacific minus China

C&E EuropeWestern Europe

China6%2% 0%

15 16 17F

9%6%

2%

15 16 17F

-13%

0%

2%15 16 17F

5%

12%

2%

15 16 17F

9 Confidential

ChinaSouth America

Source: LMC Automotive

-12%

6%

15 16 17F

-1%

2% 3%

15 16 17F

For the tyre market, emerging market vehicle sales build parc

Emerging markets• Rapid growth of vehicle sales

leading to parc growth (and hence replacement tyre sales growth) 50

60

600

700

Emerging v developed markets

growth)

Developed markets• Vehicle sales largely for parc

enhancement, little growth in vehicle parc.

• Ageing vehicle parc, average age of vehicles is increasing

20

30

40

50

LV sa

les (

mn

units

)

300

400

500

600

LV parc (mn units)

10 Confidential

With rising vehicle sales and an increasing parc, tyre market growth is dominated by the emerging markets

0

10

2000 2003 2006 2009 2012 2015100

200

Emerging DevelopedEmerging Developed

110

4/26/2017

6

Mature markets: steady LV replacement tyres sales growth

115

00)

13.2 4.0

Strong link between miles driven and fuel price

100

105

110

lace

men

t tyr

es sa

les (

2006

= 1

0

12.4

12.6

12.8

13.0

Mile

s per

veh

icle

('00

0)

2.0

2.5

3.0

3.5 Real fuel price ($ per gallo

11 Confidential

90

95

2006 2008 2010 2012 2014 2016

LV re

pl

US EU

12.0

12.2

2000

2002

2004

2006

2008

2010

2012

2014

2016

1.0

1.5

n)

Miles per vehicle Fuel price

Tyre sizes and speed rating

100%

60

70US Car tyre imports US tyre warranty: Speed rating

40%

60%

80%

Impo

rts (

%)

20

30

40

50

60

Tyre

war

rant

y

12 Confidential

0%

20%

2001 2004 2007 2010 2013

<14 14 15 16 17 17+

0

10

S/T H V WYZAll season Winter

111

4/26/2017

7

MHCV replacement tyres sales growth linked to GDP

35 55%

Fall in retreads has boosted replacement sales

USA115

00)

5

10

15

20

25

30

Repl

acem

ent S

ales

(mn

units

)

25%

30%

35%

40%

45%

50%

Retreads % Total Replacem

ent Sa85

90

95

100

105

110

lace

men

t tyr

es sa

les (

2006

= 1

13 Confidential

0

5

2000

2002

2004

2006

2008

2010

2012

2014

2016

20%

25%

ales

Replacement Sales Retreads (MTD)Retread %

70

75

80

2006 2008 2010 2012 2014 2016

MHC

V re

pl

EU US

China, expanding parc points to higher replacement sales

25,000 60,000

e)

30%

Vehicle sales 4,8,12 yrs ago (given 4 yr replacement cycle) point to substantially higher sales in 2017 and 2018

10,000

15,000

20,000

PC sa

les (

'000

uni

ts)

20,000

30,000

40,000

50,000

ativ

e ve

hicl

e sa

les (

4 ye

ar cy

cl

10%

15%

20%

25%

Growth (%

)

14 Confidential

0

5,000

1999 2002 2005 2008 2011 2014

0

10,000

2015 2016 2017 2018 2019 2020

Cum

ul

0%

5%

Vehicle sales (4 yr cycle) Growth rate

112

4/26/2017

8

But emerging markets miles driven per vehicle are falling

95

1004.4

35

40

Brazil China

60

65

70

75

80

85

90

Mile

s per

veh

icle

(199

6 =

100)

3.4

3.6

3.8

4.0

4.2 Real fuel price (R$ per litre)

15

20

25

30

35

'000

km

per

Veh

icle

15 Confidential

50

55

60

2006

2008

2010

2012

2014

2016

M

3.0

3.2

)Miles per vehicle Fuel price

0

5

10

2003 2005 2007 2009 2011 2013 2015

Brazil: replacement sales are recovering

Sale

s

es

LV replacement tyres MHCV replacement tyres

zil L

ight

Veh

icle

Rep

lace

men

t S

Braz

il M

HCV

Repl

acem

ent S

ale

16 Confidential

2011 2012 2013 2014 2015 2016

Braz

Moving Average Annual

2011 2012 2013 2014 2015 2016


113

4/26/2017

9

Russia: also recovering

lions

)

ales

LV replacement tyres MHCV replacement tyres

V Re

plac

emen

t Tyr

e Sa

les (

Mill

ght V

ehicl

e Rep

lace

men

t Tyr

e Sa

17 Confidential20

06

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

MHC

VMoving Average Annual

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Lig


Indian market has picked up

45

50 14

s)

35%

LV tyre production MHCV tyre replacement sales

15

20

25

30

35

40

45

Tyre

s (m

illio

ns)

4

6

8

10

12

plac

emen

t Tyr

e Sa

les (

mn

units

10%

15%

20%

25%

30%

Radial Tyre Production (%

18 Confidential

0

5

10

2000 2002 2004 2006 2008 2010 2012 2014 2016

SAAR Moving Average

0

2

2005/062007/082009/102011/122013/14

Rep

0%

5%

%)

Rep Tyre Sales Radialisation %

114

4/26/2017

10

With a growing parc

emerging markets lead replacement tyre market growthLV

repl

acem

ent t

yre

sale

s

19 Confidential

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Mature Emerging

Increasing volumes of tyres are traded

700

800

90

100

Tyre trade as grown at 4% per annum over the last ten years

300

400

500

600

00

LV ty

re tr

ade (

mn

units

)

50

60

70

80

90

MHCV tyre trade (m

n un

20 Confidential

0

100

200

2000 2002 2004 2006 2008 2010 2012 2014 2016

L

20

30

40

nits)

Light Vehicle MHCVExcluding intra EU trade

115

4/26/2017

11

Imported tyres are for the replacement market

80%

90%s

Imports are a particulary high proportion of replacement sales in the US

30%

40%

50%

60%

70%

rts %

repl

acem

ent t

yre s

ale

21 Confidential

0%

10%

20%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Impo

r

US LV US MHCV EU LV EU MHCV

Increasing use of duties to protect industry

US duties on China have switched importing origins and have global implications

14 35%US LV tyre imports

4

6

8

10

12

Mon

thly

impo

rts (

mn

units

)

10%

15%

20%

25%

30%

China % total (%

)

22 Confidential

0

2

2007-2009 Safeguarding duties(Sept 2009-Sept2012)

No Duties 2012-2014 Anti-dumping,countervailing duties

(Nov 2014-)

M

0%

5%

ASEAN China East Asia EUNAFTA South America China %

116

4/26/2017

12

Increasing use of duties to protect industry (continued)

The proportion of Chinese LV tyre imports has increased in the EUEU LV tyre imports

10

12s) 50%

60%

2

4

6

8

10

Mon

thly

impo

rts (

mn

units

10%

20%

30%

40%

50%

China % total im

orts

23 Confidential

02007-09 Safeguarding

duties (Sept 2009 -Sept 2012)

No duties (2012-2014)

Antidumping,countervailing

duties (Nov 2014 -)

0%

China East Asia ASEANRussia/Serbia/Turkey Americas OtherChina % total

US LV tyre capacity is expanding

40

50

ons)

10

20

30

40

mul

ativ

e Ca

mpa

city

(mill

io

24 Confidential

-10

0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cu

Bridgestone Continental Cooper GITI Tire Goodyear HankookKumho Sentury Sumitomo Toyo Other

117

4/26/2017

13

Europe capacity increases in low cost areas

10

15

20

25Ca

paci

ty (M

illio

ns)

Russia

10

20

30

40

50

ve C

apac

ity (M

illio

ns)

EU

-5

0

5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cum

ulat

ive

Michelin Continental Pirelli YokohamaCordiant Bridgestone Nokian

14

16

ns)

Turkey

-20

-10

0

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cum

ulat

iv

Apollo Tyres Bridgestone Continental CooperGoodyear Hankook Michelin NexenNokian Pirelli Other

14

16

ns)

Serbia

25 Confidential

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cum

mul

ativ

e Ca

paci

ty (M

illio

Bridgestone Sumitomo Rubber Industries

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Cum

mul

ativ

e Ca

paci

ty (M

illio

Cooper Michelin

Tariffs affected US market in 2016

16

1 6

1.8

70%

80%

MHCV tyre imports Monthly MHCV tyre imports

6

8

10

12

14

Impo

rts (

mn

units

)

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Mon

thly

impo

rts (

mn

units

)

20%

30%

40%

50%

60%

70%

Import tariff on China(%

)

26 Confidential

0

2

4

2010 2011 2012 2013 2014 2015 2016China Non-China

0.0

0.2

0

Avg'

16F'

16 M A M J J A S O N DJ'1

7 F M

0%

10%

China Non-China Import duty

118

4/26/2017

14

Chinese tyre exports

IndiaWorld

LV By country

na L

ight

Veh

icle

Tyr

e Ex

port

s

Africa

East AsiaMiddle East

EuropeN Africa

ASEANS America

India

27 Confidential

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Chi n


-30% -20% -10% 0% 10% 20% 30% 40%

NAFTAE EuropeOceania

Change in Exports

Chinese manufacturers are expanding outside of China

50

60

(mill

ions

)

6

7

8

(mill

ions

)

LV MHCV

0

10

20

30

40

2013 2015 2017 2019 2021

Cum

ulat

ive

Cam

paci

ty (

0

1

2

3

4

5

6

2013 2015 2017 2019 2021

Cum

ulat

ive

Cam

paci

ty (

28 Confidential

Shandong Yinbao Tyre GroupShandong O'Green TyreShandong Linglong RubberSentaida GroupSailun TyreQingdao Fullrun TyreHangzhou Zhongce Rubber

Shandong Yinbao Tyre GroupShandong O'Green TyreShandong Linglong RubberSailun TyreHangzhou Zhongce RubberDouble Coin

119

4/26/2017

15

Summary: light vehicles

North America

South America

North America

South America

Vehicle sales Tyre sales

ASEAN

China

East Asia

India

Europe

Eastern Europe

Middle East

North America

ASEAN

China

East Asia

India

Europe

Eastern Europe

Middle East

North America

29 Confidential

-10% -5% 0% 5% 10% 15%

World

ASEAN

Change in LV sales (%)

2016 2017

-2% 0% 2% 4% 6% 8% 10% 12%

World

ASEAN

Change in LV tyre sales (%)

2016 2017

Summary: Trucks

North America

South America

North America

South America

Vehicle sales Tyre sales

ASEAN

China

East Asia

India

Europe

Eastern Europe

Middle East

North America

ASEAN

China

East Asia

India

Europe

Eastern Europe

Middle East

North America

30 Confidential

-15% -10% -5% 0% 5% 10% 15%

World

ASEAN

Change in MHCV sales (%)

2016 2017

-2% 0% 2% 4% 6% 8%

World

ASEAN

Change in MHCV tyre sales (%)

2016 2017

120

4/26/2017

16

Thank you!

121

SueFlynn

Text Box

table of contents

4/27/2017

1

Innovative Product Applications in the Bicycle Tire Industry

Jack Uang, Ph.D.ConsultantProtrade Asia LimitedApr 27 2017

Proprietary and Confidential 1

www.protrade.org

Apr. 27, 2017

IISRP 58th Annual General Meeting - Taipei

Agenda

• Protrade Introduction• Tire Components• Manufacture of Rubber Hot Patch Sheet • Application of Rubber Hot Patch Sheet

Logo Mark Bar Code RFID Patch RFID/Polyimide (or PET) Film / Rubber Hot Patch Sheet

• Application of Rubber Base Retro-Reflective Sheet Reflective Decal


122

4/27/2017

2

Protrade Introduction


• Primarily focuses on the international trade and distribution of synthetics rubbers, natural rubbers, plastics and related fillers.

• More than 30 years of professional experience with profound knowledge of the petrochemical industry and has deep-rooted relations with world class petrochemical manufacturers and has a multi-national

Overview

customer base.

• A high performance and systematic operation platform enables various product development, sales and logistics arrangement as well as assist the suppliers to offer financial, risk management and technical support.

• Superior financial credibility reassures rapid sales growth and steady earnings.

• A multi-cultural and collaborative organization successfully orchestrated under a committed management team and cohesive operations team.

Confidential Protrade Information 4

• Provide the innovation manufacturing technology and the raw material application to improve production efficiency.

• Operation Offices: Taipei, Seattle, Houston, Shanghai, Qingdao, and Mumbai.

• Warehouses: Shanghai, Xiamen, Qingdao, Guangzhou, Mumbai, Houston, Taichung, and Kaohsiung.

123

4/27/2017

3

Global FootprintManagement Center: TaipeiOperation offices: Taipei, Seattle, Shanghai and MumbaiDedicated sales agents spread across 19 cities

North America -−Toronto−Dallas

Europe -−Rotterdam

East Asia -−Seoul−Qingdao−Beijing−Chongqing−Dongguan−Quanzhou−Taichung

5

Dallas−Houston−New Orleans South and Southeast Asia -

−Kolkata−Bangkok−Ho Chi Minh−Kuala Lumpur−Jakarta−Singapore

−Kaohsiung

Factories

Reprocessing and Repacking Facilities

• Located in Taichung and Pingtung, Taiwan

• Its annual output is around 4,000 MT per year

• Product portfolio: EPDM SSBR BR SBR NBR IIR

6

• Product portfolio: EPDM, SSBR, BR, SBR, NBR, IIR, CIIR and BIIR

124

4/27/2017

4

2016 Sales Volume by Countries and Key Customers

MALAYSIA,

THAILAND, 1.67%

INDONESIA, 1.26% OTHERS,

4.96%

CHINA, 44.58%TAIWAN,

7.39%

KOREA, 6.38%

VIETNAM, 3.74%

CANADA, 3.06%

MALAYSIA, 2.33% BELGIUM,

2.18%

7

INDIA, 12.07%

UNITED STATE, 10.38%

Confidential Protrade Introduction

ETIC

RUB

BER • CR

• IIR, HIIR, • XL-IIR• IR

SEBS

• EPDM • SSBR• ESBR• BR

NBR , PLA

STIC

S,

LER,

OIL

• Thailand: RSS3, STR 10/20

• Indonesia: SIR 10/20

• Vi t SVR3L SVR10

• EVA,• PE, LDPE, HDPE, POE • PVC• Carbon Black

Sili A iAL R

UBBE

R

Main Products and Applications

SYNT

HE • SEBS• SBS• TPV

• NBR• Hot SBR• SIS RE

SIN FILL• Vietnam: SVR3L, SVR10

• Malaysia: SMR10/20

• Silica, Amine• TDAE, RAE, Aromatic Oil• C5, C9, HHCRNA

TUR

Tires Shoes Automotive Parts

Thermoplastic Elastomers Golf


Plastic Modification Cable and WiresAsphalt Modification Conveyor BeltsAdhesive

125

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5

Tire Components


A bicycle tire consists of three basic elements:

A. CarcassB. Bead Core C. Rubber Tread


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6

A. Carcass is the “framework” of the tire

h l l bb d b h d d1. The textile material is rubber coated on both sides and cut at a 45 degree angle. With this angle placed in the rolling direction, the carcass provides the tire’s necessary stability.

2. Depending on the quality requirements of the tire, the carcass materials are woven in various densities.


B. Bead core of the tire determines

d d h1. Its diameter and ensures a secure seat on the rim.

2. Generally the bead core of a tire consists of a wire bundle.

3. In folding tires, the wire is replaced with a hoop of aramid fibersfibers.


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7

C. Rubber Tread of a Tire Consists of Several Components

1 Natural and synthetic rubber1. Natural and synthetic rubber2. Fillers, e.g. carbon black, chalk, silica3. Softeners, e.g. oils and lubricants4. Anti-aging agents (aromatic amines)5. Vulcanizing aids, e.g. sulphur6. Vulcanization catalyst and accelerators; e.g. zinc oxide

Pi t d d7. Pigments and dyes

Depending on the compound, the rubber content is around 40-60%. The filler amounts to 15-30% and the remaining components approx. 20-35%.


Manufacture of Rubber Hot Patch Sheet


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8

• Manufacture of Rubber Hot Patch Sheet


Application of Rubber Hot Patch Sheet


129

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9

• Application of Rubber Hot Patch Sheet

k1. Logo Mark2. Bar Code3. RFID Patch4. RFID / Polyimide (or PET) film /Rubber Hot Patch Sheet


Logo Mark Printed on theRubber Hot Patch Sheet

PREPARING A VULCANIZABLE RUBBER SHEET

13: Surface Coating Layer12: Printing Ink Layer11: Rubber Hot Patch Sheet

PRINTING INK ON THE OTHER SIDE OF THE VULCANIZABLE RUBBER SHEET TO FORM A PRINTING INK LAYER ON THE OTHER SIDE OF THE VULCANIZABLE RUBBER SHEET

COATING A RUBBER ADHESIVE ON THE ONE SIDE OF VULCANIZABLE RUBBER SHEET


11: Rubber Hot Patch Sheet14: Rubber base Pressure Sensitive Adhesive15: Release carrier

SURFACE COATING ON SURFACE OF PRINTING INK LAYER TO FORM A PROTECTIVE COATING TO OBTAIN A RUBBER LAMINATE

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Process of Rubber Hot Patch Application

A company processApply rubber h t

Place Expand green

Remove curved h

Install air filled inner Additional

5pcs were

Place 6 pcs into

B company process

Green tire

hot patch decal on green tire

green tire into #1 tooling

tire to be curved shape in #1 tooling

shape green tire from #1 tooling

tube into curved shape green tire

5pcs were done with same previous process

#2 tooling for vulcanization

Apply rubber hot patch decal on green tire

Place 1

1 2 3


Green tire

Place 1 pcs into tooling for vulcanization

Printed Logo on Bike Tire

Logo Decal applied on Thin Sidewall

Logo Decal applied on Thick Sidewall


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11

Printed Logo on Bike Tire

Curved shape Install air filled inner tube


Process of Rubber Hot Patch Application


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12

Bar Code / RFID


PET Base Bar Code Rubber Base Bar Code

Rubber base Bar Code can be completely compatible with Tire

• Surface Coating Layer• Printing Ink Layer• Rubber Hot Patch Sheet

bb b S i i


• Rubber base Pressure Sensitive Adhesive

• Release carrier

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RFID Patch

This RFID (Radio Frequency Identification) patch has been developed to be embedded within the tire during the manufacturing process


Rubber base RFID can be completely embedded into the sidewall of tire

RFID / Polyimide (or PET) film / Rubber Hot Patch Sheet

sidewall of tire

• Logo Printed Layer• Rubber Hot Patch sheet • Rubber Base Pressure Sensitive Adhesive • Polyimide Film• Printing Circuit and Antenna • Rubber base Pressure Sensitive Adhesive• Release carrier


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- The Advantage of RFID, Bar Code with Rubber Hot Patch Sheet

• Logo Mark printed on the surface of rubber hot patch sheet to show the location of RFID chip

• Better protection of printed circuit and antenna

• Circuit and antenna are on the high temperature resistant Polyimide film which can withstand well especially at high temperature vulcanization process


Rubber Base Retro Reflective Decal


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Type of High Visibility Materials

Phosphorescent


- Needs to be exposed to light (i.e. glow in-the-dark)- Short lived/No daytime benefit


Chemiluminescence


- Chemical Reaction(i.e. light sticks)- Short lived/No daytime benefit

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Fluorescent


- Good daytime, dawn, & dusk benefits- Poor at nighttime


Retro Reflective


- Requires light source- Dawn & dusk benefits- Great nighttime benefits-poor daytime

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Retro Reflective Decal underSun Light and Flash Light

Daytime under sun light Reflective mark are illuminated by car headlight in night time


Retro Reflective Decal on Car Tire

Reflective decal under sun light Reflective decal under flash light


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Retro Reflective Decal onMotorcycle Tire

Retro Reflective Decal Under Flash Light

Retro Reflective Decal After Vulcanization on


Retro Reflective Decals onBike Tire

Under Sun Light Under Flash Light


139

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19



140

SueFlynn

Text Box

table of contents

4/17/2017

1

Overview of recent updates on Chinese environmental regulations

222 Y ’ D LApril 27, 2017

Chen HuStaff Scientist

Keller and Heckman LLP

222 Yan’an Dong Lu

Shanghai 200002 China

+86 21 6335 1000

[email protected]

A Global Law Firm with a Scientific Advantage

IndianapolisIndianapolis

ParisParis

• Offices worldwide, including the following: Washington DC office founded in 1962 Brussels office opened in 1992

Washington DCWashington DC

ShanghaiShanghaiSan FranciscoSan Francisco

BrusselsBrussels

2 Copyright © 2017 | www.khlaw.com Keller and Heckman LLP

Brussels office opened in 1992 San Francisco office opened in 2001 Shanghai office opened in 2004 Paris office opened in 2015

• We serve clients in 26 countries

141

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2

K&H Shanghai Office

• Virtually all of our practice in China (and Asia generally) is regulatory in nature, with a special emphasis on chemicals, food and food packagingg g


With specific regard to China, K&H has prepared many applications for product approval and represented clients before the following Chinese

K&H Shanghai Office

p gagencies:

• Ministry of Environmental Protection (MEP)• China Food and Drug Administration (CFDA)• National Health and Family Planning Commission (NHFPC)• General Administration of Quality Supervision Inspection


• General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)

• Ministry of Agriculture (MOA)

142

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3

China Regulatory Matters!

• Existing CRMs are available on the K&H website here:

http://tinyurl com/jlb2hkr


http://tinyurl.com/jlb2hkr

• We also distribute alerts on other countries in the region, referred to as “Asia Regulatory Matters!”

Agenda

• Environment laws recently amended or adopted Environmental Protection Law Law on the Prevention and Control of Atmospheric Pollution Law on the Prevention and Control of Atmospheric Pollution Environmental Protection Tax Law National Hazardous Waste Inventory

• Chemical control regulations State Council Decree 591


Hazardous chemical regulations (SAWS Orders) New Chemical Regulation (MEP Order 7)

• Q & A

143

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4

Economic Development vs. Environmental Protection


China’s Top 6 Environmental Concerns


144

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5

Environmental Protection Law

• Amended Environmental Protection Law entered into force on Jan. 1, 2015: First amendment since 1989

• The most stringent Environmental Protection Law Heightened consequences for violating China’s

environmental laws

Increased transparency and whistleblower protection


p y p

Non-governmental organization (NGO) lawsuits are supported

• Harsher punishment against polluters

Consecutive daily penalties with no upper limit MEP Order 28 (Measures for continuous penalty on a


MEP Order 28 (Measures for continuous penalty on a daily basis)

Suspension or shut down of business MEP Order 30 (Measures for limiting and halting

production for remediation)

Seizure of facilities and equipment


MEP Order 29 (Measures for Seizure and Detention)

Administrative detention (up to 15 days) MPS Notice [2014]853 (Interim measures for transfer

of environmental violations cases for which administrative detention may be applied)

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6


• Disclosure of discharged pollutants by key pollutant-discharging enterprises Basic information;I f ti ll t t di h Information on pollutant discharge;

Status of pollution prevention and control facilities; Environmental impact assessment of construction and other environmental protection administrative licensing;

Environmental emergency response plans Other environmental information


• Protection of Whistleblower Identities of whistleblowers shall be kept confidential

Local authorities encourage whistleblowers by awarding


• NGOs are allowed to initiate environment lawsuit against polluters on behalf of the publicpublic

• Qualification of NGOs

Registered with the civil affairs department at or above the municipal level

Specialized in environmental protection


Specialized in environmental protection activities continuously for more than 5 years

No illegal record

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7


• Impact on synthetic rubber and tire industry

• Increased production cost to meetIncreased production cost to meet environmental protection requirements

• Elimination of outdated technologies• Upgrade of pollution control measures• Intensive law enforcement by authorities

• Industrial self-guidance also focus on environmental protection


environmental protection• Green Tire Technology Specification (March 2014)• Access Conditions for the Tire Industry (October

2014)

Law on the Prevention and Control of Atmospheric Pollution


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8

• 2nd amendment since 1987, effective on Jan. 1, 2016

Law on the Prevention and Control of Atmospheric Pollution

• Highlights Strengthens the responsibility of local government Deals with the pollution problem of coal Adds product quality standards for atmospheric

environmental requirement Stipulates special provisions on motor vehicles


Stipulates special provisions on motor vehicles Establishes joint prevention and control of air

pollution system Increases the intensity of punishment on violations

Environmental Protection Tax Law

• Passed by the National People’s Congress on Dec. 25, 2016

• Will take effect on Jan. 1, 2018

• Environmental Protection Tax will replace the current Pollutant Emission Fee (at same or higher rates)

• Scope of taxable pollutants Atmospheric pollutants


Water pollutants Solid waste Noise

148

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9


Object Taxable Unit Tax Rate (CNY)

Atmospheric pollutants (61 + 4 + 6 items) Pollution equivalent 1.2 to 12

Taxable items and rates

Water pollutants (44 items) Pollution equivalent 1.4 to 14

Solid waste

Coal gangue Metric ton 5

Tailings Metric ton 15

Hazardous waste Metric ton 1000

Smelting slag, fly ash, slag, and other solid waste (including semi-solid and liquid waste)

Metric ton 25

1 to 3 dB over standard 350 per month


Noise Industrial noise





16 dB or more over standard 11200 per month


• Examples of taxable items for rubber industry• Various metals (Hg, Cd, Cr (total), Cr (VI), As, Pb, Zn, etc.)• Suspended solidsp• BODs• CODcr• Petroleum pollutant• Ammoniacal nitrogen• Sulfides• Phenylamines


• Phenylamines• Aromatic hydrocarbons (benzene, toluene, xylenes, etc.)• Phenols (phenol, cresol, 2,4-dichlorophenol, etc.)• Phthalates (DBP, DOP)• And more

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10

National Hazardous Waste Inventory

• The amended version was published by MEP and took effect on Aug. 1, 2016

• Hazardous waste includes Solid waste (including liquid waste) that Are corrosive, toxic, flammable, reactive and/or

infectious

Cannot be excluded from having hazardous properties, may negatively impact environment or h h lth d d t b d


human health, and need to be managed as hazardous waste

Medical Waste Chemicals listed in Catalog of Hazardous Chemicals

Chemical Control Regulations

• State Council Decree 591• State Council Decree 591

• SAWS Orders (Hazardous Chemicals)

• MEP Order 7 (New Chemicals)


( )

150

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11

Explosion in Tianjin


• Two explosions on midnight of August 12, 2015

Explosion in Tianjin

• 165 deaths and about $1.1 billion in damage

• Auto-ignition of nitrocellulose, followed by explosion of ammonium nitrate and other chemicals

• The storage service provider conducted illegal


g p goperations of hazardous materials

• Local officials failed to enforce regulations strictlyNitrocellulose Ammonium nitrate

151

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12

State Council Decree 591

• Regulation on the Safe Management of Hazardous Chemicals Umbrella regulation on control of chemicalsUmbrella regulation on control of chemicals Took effect on December 1, 2011

• Applies to the manufacture, operation, use and transport of hazardous chemicals, etc. Catalog of Hazardous Chemicals Licensing requirements


Licensing requirements Company/substance-specific registration

• Basis for regulation of new chemical substances

Hazardous Chemical Regulations

• Multiple agencies are involved State Administration of Works Safety (SAWS)

takes the leading role

• Catalog of Hazardous Chemicals (2015) Effective on May 1, 2015 Includes a total of 2,828 chemicals that have

physical, health and/or environmental hazards

• Implementation Guidance for the Catalog


• Implementation Guidance for the Catalog Trial version Published and effective on Aug. 19, 2015 Immediate reaction to the Explosion in Tianjin

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13


• Production, operation and use licenses Hazardous chemicals in the Catalog

Activity License SAWS Order #

* Only certain chemicals used by certain industries, of which the quantity is above threshold (synthetic rubber industry is included)

y

Manufacture Production 41

Sale, distribution, storage Operation 55

Use* Use 57


• Registrations (SAWS Order 53) Hazardous chemicals in the Catalog Any chemicals that are classified as hazardous (SAWS Order 60)


• A lot of hazardous chemicals are used by rubber industry

• Olefins (ethylene, propylene, isoprene, butene, etc.)( y p py p )

• Aromatics (benzene, styrene, etc.)

• Halogens (chlorine, fluorine, etc.)

• Silicones


• Silicones

• Adjuvants (peroxides, phthalates, amines, sulfur and sulfur derivatives, etc.)

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14

New Chemical Regulation

• MEP Order 7 (“Provisions on the Environmental Administration of New Chemical Substances”)

First adopted in 2003 amended on October 15 2010 First adopted in 2003, amended on October 15, 2010

Responsible by MEP

“Guidelines for New Chemical Substance Notifications” (implementing rule with technical guidance)

Will b f th d d i th f t


Will be further amended in the near future

New Chemical Regulation

Inventory of Existing Chemicals in China (IECSC) A relatively small inventory (~ 45,000 substances) Some chemicals currently used in rubber industry (particularly those recently

developed) are not listeddeveloped) are not listed

Notifications are required before manufacture/import of new chemicals

Enforcement actions are limited at present, but will be strengthened


154

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15


Thank you!

Chen Hu, Staff ScientistK ll d H k LLPKeller and Heckman LLP

The Bund Center222 Yan’an Dong Lu

Shanghai 200002 China+86 21 6335 1000

155

SueFlynn

Text Box

table of contents

4/25/2017

1

CHINA TIRE INDUSTRY INTRODUCTION

Zhaofeng LiNational Engineering Research Center for Rubber and Tire

April 27,2017

Content

2.2.

3.3.

General Situation of China Tire Industry1.1.

The Progress of China Tire Labeling

Influence of Tire Labeling on Synthetic Rubber

4.4. Outlook

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2

General Situation of China Tire Industry

1.06 1.2 1.37 1.54 1.72 1.94

1

1.5

2Unit :a hundre

China tire market is huge;

The pursuit of quantity to quality ;

Bi i fl i ASEAN

0

0.5

2011 2012 2013 2014 2015 2016

Car Ownership

d million

GreenGreenR&DR&D

Big influence in ASEAN;

Internationalization(Market, Expert, Resources).

GreenGreen

QualityQualityBrandBrand

R&DR&D

Convert


“Green”Fuel Efficiency

Low Rolling Resistance

High Wet Grip

1.55 ≤ G

NoiseN ≤ LV (72dB)-3

Material Manufacturing

157

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3


The overall scale of China tire industry is expanding,

Promoting the development of macro economy.With the rapid development of automobile industry, driving the development of tire industry.During the “twelfth five-year ”, tire industry developed at high speed with the development of economy.

From 2005 to 2016, production increased from 250 million to 610 million.Accounts for a third of the total output all over the world, ranking first in consecutive ten years since 2004.

More than 2000 tire product categories, meet the demands for customers at home and abroad.

Include truck tire, light truck tire, car tire, agricultural tire and off-the road tire.

562

610565

Units: M

2014

380

483

420

529

456

201320122005 2006 2007 2008 2009 2010 2011

350330280250

562

2015 2016

Million

1%

1%

1%

1%

Company distribution in the top 75

China


Ranking(2015) Company1 d

44%

5%4%4%3%

1%1% 1%

10%Taiwan,ChinaIndiaAmericanJapanRussiaKoreaTurkey 1 Bridgestone Corp.

2 Group Michelin3 Goodyear tire & Rubber4 Continental AG5 Pirelli & Cie Spa6 Sumitomo Rubber Ind.7 Hankook tire Co.8 Yokohama Rubber Co.9 Cheng Shin Rubber10 ZC Rubber

6%13%

6%5% Turkey

FranceGermanyArgentiaIranIndonesiaOthers

158

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4

2016 Quantity（million）

Total production 610

Radial tire production 565

The largest tire manufacturer;

Higher ratio of radial tire ;


70%85% 89% 91% 92% 92.60%

60%

80%

100%

Radial tire production 565

PCR 444

TBR 121

Enhanced the manufacturing level of tire;

Accelerate the process of intelligent.

39%

0%

20%

40%

60%

2001 2007 2010 2013 2014 2015 2016

Ratio of radial tire

Intelligent


China Tire

Intelligent

R&D

QUALITY

Tire Industry

International GREEN TIRE

159

4/25/2017

5

China tire industry face transformation and upgrading Energy efficiency and environmental protection go to be the trend


Green tire industryself-discipline standard, technical specificationsP hi Chi Ti L b l

EU/US tire Label

Product Upgrade

National tire industry policy/ related laws clearly requires Developing Green tire

Pushing China Tire Label

Automobile requirement improve

High PerformanceEnergy Efficiency

p g

Structural 0vercapacity

Short High-end Products


HighDevelopment Demand

High Performance

Tire

Synthetic

Rubber

160

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6

Synthetic rubber production technology transformed from introduction, digestion to

independent research and development, R&D level improve continuously.


68

10

Rubber consumption(t)

Unit: m Item Home Import Export

Imports and exports for rubber

The quality of synthetic rubber and performance rising continuously.

024

2015 2016

NR consumption(t)

Synthetic rubber consumption(t)

million

Item Home Import Export

Weight(million tons) 3.20 1.49 0.21

Value(billions of dollars) / 29.06 4.3

Rubber consumption in china


(EC)NO 1222/2009— Include “Energy efficiency”, “Wet grip performance ”,

“Noise properties”

The (EC)NO 1222/2009 require the passenger car and Light and Truck tires sales in EC must post tire label regulations , which enforce on Nov. 1, 2011.

Quantified and classified the energy efficiency, wet grip performance, noise properties, which pointed out the technological development trend of green tire industry.

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7


Japan Korea

USA Brazil

Japan/ISO 15222,ISO28580,include “Energy efficiency” “wet grip performance ”

Voluntary labeled on 2010

Korea/ISO 28580,ISO15222,EC 228/2011,Include “Energy efficiency” “wet grip performance ”/Voluntary on Dec. 2011 and mandatory implement on Dec. 1, 2012

US/UTQGS,DOT, Smartway Tire fuel economy consumer information plan, carry out on 2010

Brazil/INMETRO Compulsory certification standards /Yet Formed Expected in 2020

TIMELINES

China Rubber Industry Published “Standard for


2014 2016 2017 2018

China Rubber IndustryAssociation Start tostudy the green tireindustrialization research.

Published Standard forgrading of tire parameters”,“Management proceduresFor the labeling of tires”

Mandatory

2012

CRIA organized experts and Key enterprises to study and publishChina’s first “Green Tire TechnologySpecification”, which finished the study of China tires labeling

VoluntaryFigure China tire label

162

4/25/2017

8

M k t Ti L b l Green


Market Tire Label Green Tire

4% 4%

Green tire consumption structure(2017) Europe

i

With the worldwide get aconsensus on energy savingand emission reduction,


44%

31%

17%

Aisa

North AmericaSouth AmericaOthers

green tire will graduallyreplace ordinary tiresmarket share in the future.

The green tire develop

The European green tire markettrend to be saturated, Asia and NorthAmerica become the main growthareas of green tire market.

The green tire developrapidly in China, the greentire market breakthrough20% on 2016, it willaccount for more than60% of the nationalmarket on 2020.

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9

PCR（205/55R16） TBR（11R22.5）tire weight, kg 9.85 56.47NR, kg 2.16 21.26SBR, kg 1.68 0.033BR kg 0 67 1 27

14.32% 3.63%

Rubber content in PCR

NRSBR


BR, kg 0.67 1.27IR, kg - 0.51HIIR, kg 0.17 1.40Others, kg - 0.66Total weight, kg 4.68 25.133Rubber content, % 47.51 44.51Synthetic rubber content, % 25.58 6.86proportion of synthetic rubber% 53.85 15.41

Rubber content in TBR

46.15%

35.90%

SBRBRHIIR

rubber%

Rubber content are nearly around 45% in PCR and TBR.

The ratio of synthetic rubber is as high as 53.85% in PCR.

The highest rubber content in PCR is SBR.

High demands for high-performance synthetic rubber.

84.59%

0.13%5.05%

2.03% 5.57% 2.63%NR

SBR

BR

IR

HIIR

Others


StructureMaterials

Rubber

FillerChemicals

Thread

Distribu-tion

Synthetic Rubber

NR

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10

SBRBR

NiBRNiBR

NdBRNdBRIIR

Advanced New Material


LOW ROLLING RESISTANCEHIGH WET GRIP

LOW ROLLING RESISTANCEHIGH WET GRIP

ESBR SSBR CoBRCoBR

LiBRLiBR

…………

IIR

HIIRCIIR

BIIR

GENERATION 1

GENERATION 2

GENERATION 3

……

Outlook

Energy-EfficientGreen

Liquid Mixing Technology Raw Materials

Advanced Materials

Recycling

Envirnomental Intelligent Manufacturing

Recycling

RFIDSmart Factory

165

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11

OutlookReduce 15m

!

NERCRAT developed a kind of new material used in high- performance green tires, which canprompt transformation and upgrading of China tire industry.

Outlook

Fuel Saving0.56L/100 km

166

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12

WE ARE JUST ON THE WAYThank you!

WE ARE JUST ON THE WAY

167

SueFlynn

Text Box

table of contents

1

Tony Phoo

Senior Economist, NE Asia

April 2017

Global outlook 2017Asia – The Standout Region

What our clients think – 2017

2

For your business, which market worries you the most for 2017 ?

Source : Standard Chartered Research Source : Standard Chartered Research

168

2

Global growth outlook – 2017

3

Ppt contribution to global GDP growth

US

US

Euro area

JP CN

China

AXCJAXCJ

Latam

MENA

SSA

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2000 2016F 2017F

Source : Bloomberg, Standard Chartered Research

100

150

200

250

300

350

0

20

40

60

80

100

120

140

Jan-14 Jan-15 Jan-16 Jan-17

Brent spot, USD/bbl (LHS)

CRB Index (RHS)

Rebounding commodity prices drive growth recovery

4

Source : Bloomberg, Standard Chartered Research Source : Bloomberg, Standard Chartered Research

Recovery in global trade driven mainly by rising commodity/fuel prices; trade volumes have flat-lined

169

3

Global growth recovery – Slow and uneven

5

Source: CPB, Standard Chartered Research

US and Asia imports: Strong; MENA and euro area: Weak

Global growth is closely related to trade

Source: Bloomberg, Standard Chartered Research

94

95

96

97

98

99

100

101

102

103

104

Jan-

90

Jan-

95

Jan-

00

Jan-

05

Jan-

10

Jan-

15

US growth may be running out of steam?

6

Sources: Bloomberg, Standard Chartered Research

30

40

50

60

70

80

90

100

110

120

Jan-

80

Jan-

85

Jan-

90

Jan-

95

Jan-

00

Jan-

05

Jan-

10

Jan-

15

HH debt % GDP

The OECD leading index for the US shows underlying momentum is softening

Source: OECD, Bloomberg, Standard Chartered Research

10

22

27

21

50

80

37

45

39

24

106

36

58

12

92

120

73

91

Mar 19 - Jan 20

Jul 21 - May 23

Jul 24 - Oct 26

Nov 27 - Aug 29

Mar 33 - May 37

Jun 38 - Feb 45

Oct 45 - Nov 48

Oct 49 - Jul 53

May 54 - Aug 57

Apr 58 - Apr 60

Jan 61 - Dec 69

Nov 70 - Nov 73

Mar 75 - Jan 80

Jul 80 - Jul 81

Nov 82 - Jul 90

Mar 91 - Mar 01

Nov 01 - Dec 07

Jun 09 - present

1945-2009 business

cycle avg:

Avg. of past 3

cycles: 95 months

Sources: Standard Chartered Research

170

4

EU faces political challenges in the next 12 months

Netherlands

Denmark

Hungary

Poland

Germany

Austria

Greece

France

Italy

Netherlands: Voters challenged their parliament’s adoption of the EU-Ukraine association agreement; general election in March 2017

Denmark: December 2015 referendum rejected closer ties with the EU. ‘Drexit’ supported by second-largest party (nationalists)

Hungary: 2 October referendum vote against EU migrant quotas will become government policy (despite low turnout)

Poland: Right-wing Law and Justice Party (PiS) took office in October 2015; referendum on policy related to immigration possible

Germany: Elections due in September; there is rising support for Alternative for Germany (AfD), a far right-wing party

Austria: Far right failed to win the re-run of presidential election (4 December), but could benefit if early elections are called this year

Greece: Low level of positive sentiment towards the EU, chance of early elections

France: Strong support for National Front’s Marine Le Pen ahead of 2017 presidential elections (in round 1, April; but polls suggest not round 2, May)

7

Italy: ’No’ vote in December referendum on constitutional reform raised the chance of early elections; high probability of populist Five Star Movement winning

(100)

0

100

200

300

400

500

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

14

Jan-

16

SA BRPH THIndon INSK TW

Accumulated foreign equity inflow, USD bn (Monthly)

Monetary policy & international capital flow

EM Asia and LATAM are major recipients of international capital flows, USD bn


8


171

5

USChina

Euro area AXJC

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Forecast

-2

0

2

4

6

8

10

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

10Y

ave

2017

CN IN VN MY PH ID HK SG KR TH TW

Domestic External

Asia – The standout region

Source: IMF, Standard Chartered Research

9

China and AXJC will likely contribute c.60% of global growth in 2017 (contributions to global growth, ppt)

External sector plays a marginal growth role for most of Asia (GDP growth contributions, ppt)

Source: Official sources, Standard Chartered Research

Source: CEIC, Standard Chartered Research 10

China is now the top trading partner for Asia, followed by the EUTotal merchandise trade as % of nominal GDP; 2014

CN

US

EU

JP

0%

5%

10%

15%

20%

25%

30%

35%

200%

ID MY PH SG TH HK KR TW IN AU

176%

CN

US

EU

JP

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

100%

ID MY PH SG TH HK KR TW IN AU

94%

US has largely ceded its role as Asia’s top trading partner to ChinaTotal merchandise trade as % of nominal GDP; 2000 (2003 for IN, 2006 for PH and 2012 for ID)

US is still but less important / China is the real elephant in the room

172

6

China – A tough re-balancing act

11Source: CEIC, Mckinsey, Standard Chartered Research

Cross-country comparison of debt to GDP ratio, Q2-2014 (Mckinsey)(% of GDP )

54

77

113

38

81

65

43

56

73

86

65

54

67

69

125

105

68

77

121

108

74

101

70

36

61

65

56

5

76

93

89

183

117

80

89

31

55

44

183

139

104

132

92

234

258

269

274

283

286

321

335

374

402

435

517

0 100 200 300 400 500 600

Germany

US

Australia

China

South Korea

Greece

Italy

France

Spain

UK

Japan

Households

Non-financial corporations

Financial institutions

Government0

10

20

30

40

50

60

70

80

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

China Taiwan Thailand Japan

Korea Singapore World

Hi-tech % of total exports

Secondary industry

Tertiary industry

30

35

40

45

50

55

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14

Tertiary industry’s contribution to GDP Share of GDP, %

Source: CEIC, World Bank, Standard Chartered Research

Global leverage metrics – Heatmap

•* Difference between 5-year CAGR of credit growth and 5-year CAGR of nominal GDP growth; a gap of more than 5ppt is our threshold for a red flag; # China, India data is as of December 2015, all other numbers as of June 2015; Source: Bloomberg, BIS, IMF, World Bank, Standard Chartered Research 12

Colours indicate leverage and potential stress: red = high, yellow = moderate/sustainable, green = low; (%, unless otherwise indicated, non-financial debt unless otherwise stated)

Arrows indicate change from Q3-2012: ↑ Moderate increase ↑↑ Fast increase ↓ Decrease

CN# IN# ID KR MY PH TW TH AR BR MX RU ZA TR HK SG AU JP FR DE ES UK US

EconomyTotal credit/GDP 232%↑ 138% 66% 228% 193% 88% 137%↓ 165% 90%↑ 158% 87% 94%↑ 119% 112%↑ 293%↑↑ 259%↑ 239%↑↑ 409% 278% 182%↓ 279%↓ 245%↓ 251%

Credit-GDP growth gap (5-yr avg, bps)* 537↓ 80 436↑↑ -6↓ 200↓ 98↑ -112↓ 339 397↑↑ 190↑ 465↑ 713↑↑ 290 481↓ 748↑↑ 283↓ 307↑ 142↓ 258↓ -220↓ 30↓ -127 29↓

Private non-financial

Total borrowings/GDP 166%↑ 69% 40% 191% 137% 51% 100%↓ 122%↑ 47% 92% 37% 75%↑ 72% 79%↑ 293%↑↑ 160%↑ 204%↑ 166%↓ 182% 109%↓ 179%↓ 157%↓ 148%

Credit-GDP growth gap (5-yr avg, bps) 462↑↑ 220↑↑ 884↑↑ -48↑ 229↑↑ 544↓ -136↓ 460↑↑ 503↑↑ 280↑ 546↑ 588↑↑ -5 1,231↑ 755↑↑ 535↑↑ 172↑↑ -61↓ 200↑ -243↓ -388↓ -385↓ -143

DSR 19%↑ 12% 6% 21%↑ 15%↑ 15%↑ 27%↑↑ 15%↑ 0%↑ 0%↑

- Corporates

Business borrowings/GDP 126%↑ 56% 23% 105% 50% 44% 57%↓ 52% 41% 67% 23% 57%↑ 35% 58%↑ 226%↑↑ 84%↑ 81% 101%↓ 125% 55% 108%↓ 71%↓ 70%

Debt/equity 83% 81% 71%↑ 61%↑ 53%↓ 74%↓ 37% 52%

Debt/EBITDA 3.2x↑ 3.4x 1.4x↓ 2.8x↓ 0.7x↓ 1.6x↓ 5.4x↑ 0.0x↓

EBITDA/interest expense 5.2x↑ 3.7x↑ 5.9x↑ 7.1x↑ 6.6x↑ 7.2x↑ 3.0x↑ 7.3x↑

DSR 55% 63% 37% 40%↓ 44% 41% 51% 55%

- Household

Household borrowing/GDP 40% 13% 17% 86% 87% 7% 42%↓ 71% 6% 25% 15% 19% 37%↓ 21% 67% 75% 123%↑ 65%↓ 56% 54%↓ 71%↓ 86%↓ 78%↓

Credit-HH income growth gap (ppt) 9.1↓ 5.5↑ 3.7↓ 3.4 5.1↓ 18.5↑ 0.7 2.7↓ 5.7 0.4↓ 6.0↑ 1.2

Borrowing/household income 62%↑ 23% 29% 147% 198%↑ 16% 63%↓ 104% 94% 152% 173% 113% 107%↑↑100%↑↑ 89%↑↑ 134%↑↑103%↑↑

Debt service ratio 6%↑ 3%↑ 5%↑ 15%↑ 22%↑ 3% 6% 13%↑ 8%↑ 15%↑ 18%↑ 10%↓ 8%↑ 7%↑ 7% 12%↑ 8%↑

GovernmentGovernment debt/GDP 66% 69% 26% 37% 56% 36%↓ 37%↓ 43% 43% 66% 50% 19% 47% 33%↓ 0%↓ 100%↓ 35% 244% 96% 73%↓ 100%↑ 88% 103%

Int. payments/Govt. revenue 3% 12%↑↑ 8%↑ 6% 2% 18%↑↑ 5%↑ 6% 5%↑ 4% 9%

Debt service ratio 2%↓ 14%↓ 4%↓ 7%↓ 1%↓ 8%↓ 5%↓ 12% 6%↓ 107%↓

External debt

External debt/GDP 6%↓ 17%↓ 33%↓ 16%↓ 44%↓ 19%↓ 33%↑↑ 22%↓ 20%↓ 19% 35% 21%↓ 27%↓ 32%↓ 77%↑↑ 84% 45%↓ 39%↓ 115% 78%↓ 106%↓ 111%↓ 74%

Total ext. debt (incl fin. sector)/GDP 16%↑ 24%↓ 37%↓ 31%↓ 70%↓ 26%↓ 33%↑↑ 35%↓ 25%↓ 38% 37% 43%↓ 44%↓ 59%↓ 447%↑↑ 447%↓ 113%↓ 67%↓ 201%↓ 130%↓ 149%↓ 272%↓ 90%↓

FCY share of total external debt 63%↑ 75%↑↑ 85%↑↑ 71%↑↑ 47%↑ 97%↑↑ 72%↑↑ 93%↑↑ 28% 35%↑

External debt/FX reserves 0.2x↑ 1.0x↓ 2.5x↑↑ 0.6x↓ 1.3x↑↑ 0.7x 0.4x↑↑ 0.6x↑ 4.2x↑↑ 0.9x↑↑ 2.1x↑ 0.9x↑↑ 2.1x 2.2x↓ 0.7x↑↑ 1.0x↑ 13.1x↓ 1.3x↓ 90.5x↓ 68.6x↓ 32.6x↓ 34.6x↓

M2/FX reserves 5.8x↑↑ 5.2x 3.0x↑ 5.2x 4.1x↑↑ 2.0x↑↑ 3.0x 3.3x↑ 3.3x↑↑ 1.9x 3.6x↓ 1.9x↑ 4.8x↑↑ 4.2x 4.3x↑ 1.5x 32.1x↓ 6.3x↑ 35.4x↑

Short-term (< 1Y) share of external debt 58%↑ 24%↓ 9%↓ 18%↓ 20%↓ 5%↓ 92%↑ 29%↓ 28%↓ 2% 16%↓ 8% 11% 16% 32%↓ 69%↓ 2%↓ 67% 33% 29%↓ 33%↓ 48%↓ 23%↓

Private-sector share of external debt 77%↑ 73% 51% 51%↓ 55%↑ 42%↑↑ 99%↑ 73%↑ 31%↓ 36%↓ 46% 83% 39% 60% 99%↓ 100% 62% 41%↑↑ 34%↓ 24%↓ 28%↓ 75%↓ 48%↓

Moody's' External Vulnerability Indicator 18.9 74.3 56.6 45.1 119.9 30.2 39.9 45.2 107.7 26.9 68.5 28.2 93.0 178.2

173

7

Leverage in Asia – External vulnerability index

13

India, Malaysia and Taiwan are more exposed than in 2007 (Moody’s External Vulnerability Indicator, EVI)

China, Korea and India are least exposed on the external debt front (external debt/GDP, %)

Source: Moody’s, Standard Chartered Research Source: BIS, Bloomberg, CEIC, National sources, Standard Chartered Research

KR

TH

IDPH

MY

IN

CNTW

0

20

40

60

80

100

120

140

160

180

200

1997 2007 2017F

783 493

EVI : (Short-term external debt + Currently maturing long-term external

debt + Total non-resident deposits over one year) /Official FX reserves

FCY

LCY

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Chi

na

Kor

ea

Indi

a

Thai

land

Phili

ppin

es

Indo

nesi

a

Japa

n

Aus

tral

ia

Mal

aysi

a

Will VN accession to TPP and RCEP influence your decision to invest?

Manufacturing is main beneficiary of FDI

Why did you invest in Vietnam ?

Vietnam is the most preferred alternative to the PRD

VN’s international reach if TPP is concluded (multiple of own-country data)

174

8

ASEAN – Growth in the fast lane

15

Compounded growth in PPP terms, 2013-2020 Growth, %

Source: World Bank, Standard Chartered Research

ASEAN and China better placed vs. rest of worldPopulation in millions

ASEAN is still relatively ruralUrbanisation, % (X axis) versus GDP per capita, USD (Y axis), 1961-2011

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

5 10 15 20 25 30 35 40 45 50 55

Cambodia

Indonesia

Lao PDR

Philippines

Thailand

Vietnam

World

50%

Source: UN, Standard Chartered Research

ASEAN – A potential consumer market too

16

Significant growth in the urban population Millions

Rise in ASEAN’s urban population to dwarf current populations of major cities (millions)

289

368

0 0.4 1.3 1.9 5.5 5.97.1

11.311.5

33.9

200

220

240

260

280

300

320

340

360

380

400

2013

Bru

nei

Sing

apor

e

Cam

bodi

a

Laos

Thai

land

Mal

aysi

a

Mya

nmar

Phili

ppin

es

Viet

nam

indo

nesi

a

2020

+79mn

78.9mn

0

10

20

30

40

50

60

70

80

90

Incr

. in

ASE

AN

urb

anpo

pula

tion

- 202

0

Shan

ghai

Del

hi

Toky

o

Lond

on

New

Yor

k

Total = 67.9mn

Total = 25.9mn3

Source: IMF, Standard Chartered Research

175

9

ASEAN – Consumer opportunities

17

BN

KHCNHK

IN

ID

JP

KR

LA

MY

MMPH

SG

TW

TH

US

VN

1,000

30010

0

100

200

300

400

500

600

700

800

900

2 4 6 8

No.

of m

otor

veh

icle

s pe

r 100

0 pp

le

CAGR in PPP terms % (2013-2020)

Size of market

Increase of 23mn cars by 2020 if

penetration increases to TH’s

level by 2020

Increase of 9mn cars by 2020 if it

closes penetration gap to MY’s level by 50% by 2020

BN

KH

CN

HK

INID

JPKR

LA

MY

MM

PH

SGTW

TH

US

VN2,000

500

10

0

10

20

30

40

50

60

70

80

90

100

2 4 6 8

No.

of i

nten

et u

sers

100

ppl

e

CAGR in PPP terms % (2013-2020)

Size of market

Number of motor vehicles per 1,000 people No. of cars (y-axis); growth in PPP terms (x-axis)

Number of internet users per 100 people No. of users (y-axis); growth in PPP terms (x-axis)

Source: World Bank, Standard Chartered Research

Regional economic integration – The way forward

18

'Belt' refers to the Silk Road economic belt, which links China to Europe via central Asia & Russia; the Persian gulf & Mediterranean Sea via Central and Western Asia; Southeast & south via Indian ocean – consist of network of land & rail routes, oil and natural gas pipelines, and other infrastructure projects that will stretch from central China through Central Asia, reaching Moscow, Rotterdam & London'Road' refers to the '21st century maritime Silk Road', which extends from China's coastal ports to the South China Sea, Indian Ocean, Africa and Europe & South Pacific Ocean. The Road is the maritime equivalent, consisting of a network of ports and other coastal infrastructure projects that will dot the map from South and Southeast Asia to East Africa and the Mediterranean Sea.

176

10

Rising anti-globalisation sentiment – A 1930s style trade war ?

19

Top five global exporters

Top five global importers

Source: World Trade Statistical Review, 2016, Standard Chartered Research

20

Disclaimers:免責聲明:

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177

SueFlynn

Text Box

table of contents

4/17/2017

1

THE JAPAN STEEL , .WORKS LTD

Twin Screw Extruder Technology of


de-volatilization. & dewatering for rubber & elastomer application

The Japan Steel Works, Ltd.

2 Confidential

The Japan Steel Works, Ltd.Yoshitaka Kimura

178

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2


MASTER BATCH

FILLER/GF COMPOUND

POLYMER ALLOY

Application

SPECIAL COMPOUND

RECYCLING

COLORING

REACTION

3 Confidential

DIRECT MOLDING

FOOD

DEWATERING

DEGASSING DEVOLATILIZING

REACTIVE


Dewatering

4 Confidential

179

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3


Polymerization Isolation Product

Steam stripping Squeezer Expander DryerPorous product

Dewatering Process

Polymerization

Process Flow

Steam stripping Squeezer Expander DryerCrumbPowderPellet

TEX Dryer

Solid product

Polymerization(Case of Solution Process)

Short L/D

Long L/D

New Concept

5 Confidential

TEX

Devolatilizing ProcessTEX

Solid product

PelletSheetLong L/D

New Concept + α


Conventional Process

Condensation

Recycling line

Polymerization Isolation90% water

10% water

Steam

JSW R305V (Expander)

6 Confidential

Expansion (Expander)Final drying (Dryer)

0.5 - 2.0% water

0.1 - 0.5% waterDewatering(Squeezer)

JSW R305S (Squeezer)

180

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4


New Concept - Production of Porous product -

Combining Squeezer and Expander TEX + (Dryer)

New concept of Rubber Finishing (Dewatering) SystemIf you want porous products…

Advantages•Porous product•No surging•Energy saving•Space saving

Condensation

Pre-dewatering90% water

50% water 0.5 - 2.0% waterSteam

•High productivity•Short residence time •Low temperature•Low maintenance cost

7 Confidential

Polymerization Isolation

Dewatering & Expansion(Short Twin Screw Extruder) Final drying (Dryer)

0.1 - 0.5% waterPorous product



Principles of TEX Dewatering & Expansion process

Rubber Slurry Dewatering zone

Temperaturecontrol zone

Expansion

S4

Pressure

Rubber Slurry

Conveying

Pressurize

S1 S2

Water WaterDewatering zone:Separate water from rubber slurry by mechanical compression and shear. Discharge the separated water through dewatering screens on barrels.Moisture content 3 ~ 10wt%.

S3

Water

S4

Water + Steam

t

Dewatering screen

Water

8 Confidential

Temperature control zone:Increase rubber temperature by shear of screw for expiation at outlet of the extruderExpansion at extruder outlet:Moisture in the rubber is vaporized by rubber own heat. The rubber is pelletize by dry face pelletizer. Moisture content after expansion: <3.0wt%

181

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5



9 ConfidentialDewatering & Expansion Video

Combining Squeezer, Expander and Bed Dryer TEXIf you want solid products…


New Concept +α - Production of Solid product -

Squeezer Expander Dryer

Solid product

JSW TEX250

Pre-dewatering

90% water

50%

Condensation

Steam

10 Confidential

Solid product50% water0.1 – 0.5% water

Dewatering, Devolatilizing & Extruding(Long Twin Screw Extruder)

Polymerization Isolation

Steam

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6


New Concept +α - Production of Solid product -

Principle of TEX Dewatering & Drying

V

Dewatering Zone

Drying Zonewith Vacuum Pelletizing

Rubber SlurryVacuum

PelletizerS1 S2 V1 V2

G/PWaterWater+Steam

t

S3

Steam

Dewatering zone:

y

Discharged solid product

11 Confidential

Separate water from rubber slurry by mechanical compression and shear. Discharge the separated water through dewatering screens on barrels. Moisture content < 3.0wt%.Drying zone with vacuum:Vaporize moisture under vacuum. Optimum conveying screw and venting port required

0 25

0.3

0 2

0.3

kg) Approx. 40%down

6.85.0

6.0

7.0

Ton/

h)

Tripled


Advantage of TEX Dewatering & Expansion

0.25

0.150.1

0.2

Esp

(kW

h/

Conventional Extruder

TEXDewatering& Expansion

TEXDewatering & Vacuum

0

2.3

3.4

1.0

2.0

3.0

4.0

Thro

ughp

ut(T

Conventional Extruder

TEXDewatering& Expansion

TEXDewatering& Vacuum

0

p

12 Confidential

& Expansion & Vacuum

Comparison in Energy consumption

Drying process included

& Expansion & Vacuum

Throughput comparison with Φ250 machine

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7


Advantage of TEX Dewatering & Expansion

13 Confidential


Devolatilizing

14 Confidential

184

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8


Polymerization Isolation Product

Steam stripping Squeezer Expander DryerPorous product

Dewatering Process

Polymerization

Process Flow

Steam stripping Squeezer Expander DryerCrumbPowderPellet

TEX Dryer

Polymerization(Case of Solution Process)

Short L/D

Long L/D

New Concept

15 Confidential

TEX

Devolatilizing ProcessTEX

Solid product

PelletSheetLong L/D

New Concept + α


P l & V l til tt

Polymerization Devolatilization

Devolatilizing Process

Polymer & Volatile matters,Monomers SolventsAdditivesCatalyst

＞No-reaction monomers ＞Sub-reaction components＞Low molecular weight components ＞Solvents etc.

Remove

16 Confidential

PolymerPolymer solution

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9

Monomers Catalyst

Additives Solvents

Combustion

RefiningRecycling

RefiningRecyclingPolymer &

Volatile matters


Typical Devolatilizing Process flow with Extruder

Reactor

Solvents

Dust separator

Condenser

Liquid separator (density)

Distillation (Boiling point)

Vacuum pump

Recycling

RefiningRecycling

Centrifugal H t

Low pressure separator Volatile matters

17 Confidential

TEX with Multi- vents

Pump

Refining，Recycling

Pellets

Dust separator

gdryerDewatering

unit

Heat exchanger Gear

pump Polymer

PelletizerVolatile matters

TEX400αTHE JAPAN STEEL , .WORKS LTD

18 Confidential

Barrel dia. : 443 mm

L/D : 38.5

Motor : 4000 kW

Material: Synthetic Rubber+10%Solvent

186

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10

The mechanism of devolatilization in extruder has basically 3 models.

Model Mechanism

Vacuum


Mechanism of Devolatilizing in Extruder

1. Flushing is applicable for the concentrate polymer included a lot of volatiles.

2. Surface renewing is the typical model of devolatilization in extruder, and it is carried out by rotation of screw.

SurfaceRenewing

Flushing

19 Confidential

3. Bubbling is method of devolatilizationby expanding the surface area with stripping agents.

Bubbling

Water Vacuum


APolymer & Volatiles Mechanism of the FlushingA. Volatile matter is melted into the polymer

so as not to be foamed.

Flushing Mechanism

HopperRear vent

VolatilesB B. It foams by its own temperature at low

pressure. C. The foam ruptures and gets off polymer. D. Residual foam is broken by shear

stress between screw and barrel.

The effect of the flushing is influenced by,1. Temperature2 Pressure (Vapor Partial)

20 Confidential

Shear

Flushing C D

2. Pressure (Vapor，Partial) 3. Viscosity4. Surface tension5. Free volume in extruder e.t.c

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11


Mechanism of the surface renewalIn case of twin screws and double flights, the surface renewing is carried out at three portions by rotation of screw, (Ⅰ,Ⅱ,Ⅲ）.

A

BC

Ⅲ

A

B

Surface Renewal Mechanism

( , , ）. Considering the active surface for devolatilization, there are three areas.

The surface of,A. A filled polymer in screw channels. B. Polymer film between screw and barrel. C. Polymer film between two screws.

A BC

Ⅰ

ⅡC

P l fl

21 Confidential

Major factors on the effect of the surface renewal1. Throughput2. Screw speed 3. Screw configuration4. Temperature e.t.c

Polymer flow

Screw revolutionRenewing speed

Mechanism of the foamingA. Stripping agent ( For example, water,

nitrogen, alcohol and etc.) is injectedinto polymer at mixing zone. Volatiles


Forming Mechanism

B. Stripping agent is dispersed into polymer with mixing screw.

C. The dispersed stripping agents are expanded by own temperature and pressure drop due to be low viscosity.

D. The expanded it’s bubbles break by vapor pressure and shear stress.

The effect of the foaming is influenced by

B C

Stripping agent

A D

22 Confidential

The effect of the foaming is influenced by,1. Pressure (Vapor, Partial, Mixing)2. Temperature 3. Screw speed 4. Mixing screw configuration5. Substance of stripping agent

e.t.c

B C

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300

RE 200 rpm

Test machine: TEX65XCT-38.5AW-4VCommercial machine: TEX280HCT-38.5SW-4V (9.1 t/h)Material: L-LDPE+5wt%HEXICENE


Typical Flow

1000

10000

100000

L HE

XICE

NEIN

L-L

DPE

ppm

)

200220240260280

POLY

MER

TEM

PERA

TUR

(C)

200 rpm250 rpm

23 Confidential

VacuumL-LDPE(HEXICENE 5wt%)

VacuumVacuum WATERINJECTION

WATERINJECTION

10100

1000

RESI

DUAL

CONT

ENT (p 200 rpm

250 rpm


Thank you!

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table of contents

4/17/2017

1

Wh Will S it R t t th R bb

2017 IISRP AGM

ihsmarkit.com

When Will Sanity Return to the Rubber Feedstock Markets

April 2017

© 2017 IHS Markit

Bill Hyde, Senior Director Olefins and Elastomers

+1 281 213 3729

[email protected]

CHEMICALFINANCIAL

MARKETS DATA& SERVICES

Addressing strategic

challenges with

interconnected

April 2017

ENGINEERING & PRODUCT DESIGN

ECONOMICS &COUNTRY RISKENERGY

AUTOMOTIVE

capabilities

IHS Markit provides leaders from multiple industries with the perspective and insights they need to make the bestchoices and stay ahead of their competition.

© 2017 IHS Markit

MARITIME& TRADE

AEROSPACE,DEFENSE &SECURITY

DIGITAL & WEB SOLUTIONS

OPERATIONAL RISK& REGULATORY

COMPLIANCE

TECHNOLOGY,MEDIA &

TELECOM

190

4/17/2017

2

Optimizing your workflows, with our deep petrochemical insights and capabilities

CHEMICAL

Business Management

• Build Value-based commercial strategies

• Identify growth opportunities• Maximize price settings

Engineering and R&D

• Select process technology for new plants

• Benchmark chemical process competitiveness

• Diminish risk of your capital investment plans

• Estimate capital costs

Financial Analysis

• Complete accurate and timely competitor analysis

• Make accurate and confident evaluations of future investments

• Benchmark success of projects /business units

• Understand best method to deploy capital

© 2017 IHS Markit

Purchasing

• Make informed buying decisions• Negotiate effective supply contracts• Source chemical raw materials • Optimize your supply portfolio

Sales & Marketing

• Identify the right selling opportunities• Cultivate better customer relationships • Negotiate more profitable contracts • Optimize your customer and

product portfolio

Strategic Planning

• Deliver a credible business strategy• Identify market opportunities• Validate investment plans • Access the competitive landscape

© 2017 IHS Markit. All Rights Reserved.

Let’s address the elephant in the room – recent butadiene market dynamics

• Pricing insanity beginning

April 2017

g y g glast year…the world flipped upside down

• Regional spreads historically large

• Chain margins uneven

© 2017 IHS Markit

191

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3

Butadiene price insanity

250%

Regional butadiene price trends

2000

Regional butadiene price spreads

April 2017

50%

100%

150%

200%

Jan

uar

y 20

11 =

100

%

-500

0

500

1000

1500

Do

llars

per

Met

ric

To

n

© 2017 IHS Markit

0%Jan-11 Feb-12 Mar-13 Apr-14 May-15 Jun-16

Northeast Asia North America West Europe

Source: IHS Global C4 Olefins & Elastomers

-1000Jan-11 Feb-12 Mar-13 Apr-14 May-15 Jun-16

US - WEP NEA - WEP

Source: IHS Global C4 Olefins & Elastomers

Chain margins skewed

2000

Key price differentials in Asia

April 2017

0

1000

Do

llars

per

Met

ric

To

n

L ti t

High operating cost

© 2017 IHS Markit

-1000Jan-11 Aug-11 Mar-12 Oct-12 May-13 Dec-13 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16

Asia Natural Rubber - SBR Asia SBR - BD

Source: IHS Global C4s & Elastomers

Low operating cost

192

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4

What turned the world upside down?

April 2017

• Strong 2H16 demand from Chinese automotive sector

• Operating issues

• Tight inventories

© 2017 IHS Markit

Tight inventories

• Weak natural rubber

Agenda

April 2017

• Petrochemical Trends

• Ethylene

• Propylene

• Butadiene

© 2017 IHS Markit

• Styrene

• Price Outlook

• Conclusions

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6

Increasing complexity in the ethylene value chain

Demand shocks (GDP) or shifts (product substitution)

Catalytic from methane: Add-on vs

ld l

April 2017

Coal to MEG (skipping EO)

Coal to VCM (skipping EDC)

shifts (product substitution)

Polyolefins recycle, PE/PVC/PET

Supply/demand from NGLs and Naphtha:

• Feed switches • Capacity / production

impact

new world scale

Gas to methanol to olefins

Ethylene

© 2017 IHS Markit

Co-product impact: On purpose propylene via PDH, metathesis, coal,

methanol

Coal to olefins

North America ethylene capacity growth*

Starting Company Location Total Growth**

Q1-17Dow Plaquemine, LA 250

Equistar Corpus Christi TX 363

April 2017

Equistar Corpus Christi, TX 363

Q2-17 Oxy/Mexichem Ingleside, TX 550

Q3/4-17 ChevronPhillips Cedar Bayou, TX 1,500

Dow Freeport, TX 1,500

Q1-18 ExxonMobil Baytown, TX 1,500

Q2/3-18 Indorama Lake Charles,LA 420

Q4-18 Formosa Point Comfort, TX 1,250

Q1-19Shin-Etsu Plaquemine, LA 500

Sasol Lake Charles LA 1 550

© 2017 IHS Markit

Sasol Lake Charles, LA 1,550

Q1-20 LACC Lake Charles, LA 1,000

Q2-22 Shell*** Monaca, PA 1,500

Total additions 11,883

*Firm 2017 through 2021/22 **000 metric tons *** Shell Monaca, PA was last to FID

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7

Unconventional Feedstocks for Crackers in China

April 2017

ShenhuaNingmei

I &II

Yitai Coal Erdos

YankuangYulin

ShenhuaErdos

Tongyi PC

Donghua

YitaiXinjiang

ShenghongPC

Hengli PC

SP Chemicals

WanhuaChemical

Tianjin

Dongying

© 2017 IHS Markit

CTL

NaphthaCracker

Zhejiang PC I & II

SinochemQuanzhou

Sinopec Gulei

Sinopec Hainan

Sinopec/KPC

CNOOC-SHELL

E/P Cracker

Ethylene capacity additions outpace demand growth in near term

10000

Ethylene capacity additions and demand growth

April 2017

2500

5000

7500

Th

ou

san

d M

etri

c T

on

s

© 2017 IHS Markit

02016 2017 2018 2019 2020 2021

Other Middle East China North America Global Demand Growth

Source: World Analysis - Ethylene

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8

China’s aggressive chemical expansion program from a North American perspective…

250

China & North America base chemical capacity (million metric tons)

April 2017

100

150

200

North America ChinaBy 2009, capacity was equal to North America; by 2025 will exceed by 150 MM metric tons

© 2017 IHS Markit

0

50

90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24

Source: IHS Markit

Propylene

April 2017

© 2017 IHS Markit

197

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9

Propylene demand growth is faster than global economic growth

4

Propylene Global Demand Elasticity

April 2017

-1

0

1

2

3

GD

P E

last

icit

y

© 2017 IHS Markit

-3

-2

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: World Analysis - Propylene

Demand is hungrier than traditional supply can provide….On-Purpose fills the gap

125

World: PG/CG Propylene Production by Process

April 2017

25

50

75

100

Mill

ion

Met

ric

To

ns

© 2017 IHS Markit

02000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Stm. Crackers FCC Splitters On-Purpose Demand

Source: World Analysis - Propylene

198

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10

Butadiene

April 2017

© 2017 IHS Markit

Ethylene cracker coproduct volume trends down

100%

Steam cracker butadiene to ethylene production ratio trends

April 2017

90%

95%

2016

= 1

00

© 2017 IHS Markit

85%2016 2017 2018 2019 2020 2021

World North America West Europe Middle East China

Source: World Analysis - Butadiene

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11

Annual growth rates 2016 - 2021 for key C4 olefins commodities

Does it balance?

April 2017

1.6

2.42.6

2.2

4.13.7

© 2017 IHS Markit

Crude C4 Butadiene PBR eSBR sSBR ABS

Source: World Analysis - Butadiene

Styrene

April 2017

© 2017 IHS Markit

200

4/17/2017

12

Styrene market has rebalanced with slower expansions

3.0

Capacity Expansions vs. Demand Growth

Oversupply in 2010

April 2017

1 0

0.0

1.0

2.0

Mill

ion

Met

ric

To

ns

Oversupply in 2010

Slow Expansions

More Expansions

© 2017 IHS Markit

-1.02010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

China Americas Europe

Middle East Asia (Exclude China) Hypothetical Addition

Hypothetical Closure World Demand GrowthSource: IHS Markit

Increasing self-sufficiency in China impact Asian styrene supply

9012

China's Styrene Self Sufficiency

April 2017

50

60

70

80

4

6

8

10

Mill

ion

Met

ric

To

ns

Sel

f S

uff

icie

ncy

, %

© 2017 IHS Markit

30

40

0

2

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Imports Production Self SufficiencySource: IHS Markit

201

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Pricing / economics

© 2017 IHS Markit

Commodity prices trend gradually upward

April 2017

140%

Commodity Price Trends

40%

60%

80%

100%

120%

2011

= 1

00%

© 2017 IHS Markit

0%

20%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Oil Ethylene Propylene Butadiene Styrene

202

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14

Conclusions

April 2017

• Ethylene markets trend longer in near term, but supply tightness is on horizon

• On purpose propylene sets price with incremental supply in China

• Butadiene markets return to more fundamental drivers, but volatility risk is high

• Styrene is returning to longer supply

© 2017 IHS Markit

• Prices trend generally higher but not dramatically as oil is relatively calm

April 2017

© 2017 IHS Markit

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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 Hendrick Lam Farewell Address: Ladies and Gentlemen, It certainly was a great honor for me, my company and my country to host the 58th AGM of the International Institute of Synthetic Rubber Producers. I trust that you not only enjoyed the formal program as hosted by the IISRP, but that you all also enjoyed our hospitality and the few sights and events that we could offer in the limited time. I truly hope this very brief visit will have served to whet your appetite to return. In coming to the end of my term as President of the Institute, I sincerely wish to thank you for entrusting me with the leadership of our Institute during the past year. It has indeed been a privilege to work with the Executive Committee, the working Committees and our Institute office bearers and I wish to extend to you all my sincere appreciation for affording me this most exciting experience. As you are all well aware, the IISRP essentially functions by way of its working committees. This in turn is heavily dependent on our member companies making available some of their key staff to serve as members of these committees. I am thoroughly aware of the burden this places on our member companies and therefore wish to use this opportunity to thank all the companies that do make available their employees for this most important task and when I thank you, I am certain that I do this on behalf of all the member companies. Ladies and Gentlemen, the industry is becoming a truly global business by expanding across the globe to many countries formerly not involved in SR production. The many different nationalities present here bears testimony to this. However, one of the greatest changes we see is associated with the regulatory environments in which we operate and which are placing ever greater compliance demands on us. As these changes occur, our industry more and more realizes that we need to address these challenges jointly and speak with one, professional voice. This then is really where the IISRP comes into its own and offers to its members a globally recognized voice speaking to stakeholders at all levels on behalf of virtually the total world synthetic rubber industry. Over the years I have developed a very high regard for the most professional way in which this regulatory stakeholder interface is managed to the benefit of the members of the IISRP and I believe this to be an area that will only increase in importance as the industry moves forward.

204

The past year was in many respects a challenging year for our industry as we battled to manage the global downturn in commodity prices and the imbalance in supply-demand of our products resulting from the effect of this downturn on the separate geographies. Despite this, our industry and this Institute today is as strong and cohesive as ever and very well placed to support our mission statement i.e. “To promote and further the interests of the manufacturers of synthetic rubber polymers”. My best wishes therefore to the incoming president and executive in moving forward this industry and this Institute. I wish you all a safe journey back to your home bases and look forward to seeing you all next year in Madrid. Table of Contents

205

2017-2018 PRESIDENT-INTERNATIONAL

Enrico Lucchese

Enrico Lucchese is Marketing Manager for Tyre, Styrenics Modification, & Latex within the Elastomers Business Unit at Versalis (Eni). His background in the elastomers business is quite comprehensive ranging from technical, commercial, to management key positions. In his 30 years career within the petrochemical industry, started in 1986 at Enichem Elastomeri, he has been progressively involved in technical service and product management responsibilities until he moved to holding stewardship of the SBR, BR and TPR businesses as Business Manager. In this capacity, he has been instrumental to ensuring the consolidation and development of the elastomers division. The company capitalized on Mr. Lucchese’s broad competence when, in 2007, after a major reorganization, he was appointed Elastomers Marketing Manager of the total product portfolio at Polimeri Europa, including responsibilities for Technical Service & Application Development. Later, with the company renamed Versalis, he has served as Marketing Manager Tyre, Styrenics modification, Moulded Foams & Paper. By the same token, and maintaining related global sales responsibilities to major key accounts, he is recognized for his role in the Elastomers Marketing of the automotive application segment. In 2014, he brought a significant contribution as focal point for the market and sales development of the Matrìca (JV with Novamont) bio-based product portfolio. A milestone accomplishment for Mr. Lucchese in the last few years is his strategic role in the company internationalization process, both in the licensing field of Versalis’ proprietary technologies and in the setup of new Joint Venture initiatives, commercial collaborations, within either specific elastomers areas or related synergic businesses. Enrico Lucchese holds a degree in Chemistry. Mr. Lucchese is also: - Vice Chairman of the Board of the European Section of the International Institute of Synthetic Rubber producers (IIRSP), - Vice Chairman of the European Statistical Section of the International Institute of Synthetic Rubber producers (IIRSP), - Member of the Industrial Panel of Associates of the International Rubber Study Group (IRSG), since 2010. An interesting footnote in Mr. Lucchese’s career is his 2 years’ experience in Costa Rica as lecturer and researcher at local university for the Department for International Development Cooperation of Italian Foreign Affairs, which he joined in 1983 after graduation.

206

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Business Program Attendees

First Name Last Name Company Wayne Stair Americas International Werner Krauss Albemarle/Rockwood Lithium Ted Romans Americas International Len Trocano Anderson International Fan, Jun Anderson International Samuel Stone Anderson International Hui Mu Anderson International/China Vitaly Rogachevsky Argus Media Masafumi Takamori Asahi Kasei Takaaki Matsuda Asahi Kasei Takayuki Nomoto Asahi Kasei Tierra Huang Cabot China Andrea Angeletti Conser Ying Li CSRIA Fumihiko Koga Denka Pete Herzog Dexco Polymers Ho-Sung Kang Dow Asia Greg Nelson East West Copolymer Ludovico Balbo Eigenmann and Veronelli Warren Lee En Chuan Chemical Industries Taka Murata ETIC Yo Hibiya ETIC Chris Senyk FMC George Sandor FMC Lithium Daniel French French Oil Mill Machinery Jason McDaniel French Oil Mill Machinery T.M. Lim French Oil Mill Machinery Alex Lee French Oil Mill Machinery Mark Archey French Oil Mill Machinery Kelly Reynolds Golden Tex Lester Tyra Goodpack Allen Lin Goodpack Tim Palmer Goodpack Thomas Ong Goodpack Akio Kuno Goodpack Japan Heming Cheng Goodpack Logistics Ken Hertl Goodyear Tire & Rubber Tim Taylor Goodyear Tire & Rubber Jay Kim GPS Angela Lee GPS Magali Trehet GPS Jean-François Baus GPS Hakjoo Kim Hankook Tire Juergen Trimbach Hansen & Rosenthal No, Dock Moung ICIS, Reed Business Information Bill Hyde IHS Markit Anthony Song IHS Markit Mary O' Connor IISRP

207

First Name Last Name Company Haruyoshi Ueda IISRP Sue Flynn IISRP Juan Salinas IISRP Harry Sun IISRP Robin Boyd IISRP Roxanna Petrovic IISRP Rumiko Yoshida IISRP Tom Trowbridge IISRP Counsel Sanjaya Bhatnagar Indian Synthetic Rubber Salvatore Pinizzotto IRSG Michael Weidokal ISA Masayoshi Tokihisa Japan Steel Works Reiko Iwamura Japan Steel Works Yoshitaka Kimura Japan Steel Works Peter Rossi JNC America Hayato Hirano JSR Yuji (Tony) Hongu JSR Masato Hirai JSR Takashi Wakabayashi JSR Satoshi Matsuzawa JSR Noboru Oshima JSR (retired) Cliff Thompson JX Nippon Chemical Kevin Asada JX Nippon Chemical Lukas Oosthuizen Karbochem Pierre Brink Karbochem Chen Hu Keller and Heckman Clay Humphries Kimbell(Anderson) Jong Hoon Baek Kumho Petrochemical Kyoung In Chon Kumho Petrochemical Gwang Hoon Kwag Kumho Petrochemical Masaki Ikuji Kuraray Jun Inoue Kuraray Brian Chapman Kuraray America Joerg Oertel Kuraray Europe Bowei Lee LCY Chemical Joey Lin LCY Chemical TH Hong LCY Chemical Romy Lee LG Chemical Robert Simmons LMC International Andrea Balanzoni Lotte Versalis Elastomers Zhaofeng Li NERCRAT John Robinson NFM Welding Engineers Christopher Tucker NFM Welding Engineers Jacob Kohl NFM Welding Engineers Philippe Audibert Nynas Marcus Chua Nynas Herbert Fruhmann Nynas Alvin Yao Nynas Jason Wong Nynas Chenta Chen Protrade Asia Jack Uang Protrade Asia Solomon Shih Rockwood Lithium

208

First Name Last Name Company Elisabeth Gorman Rockwood Lithium Faisal AlBahair SABIC Bernd Pluimers SASCO Chemical Larisa Bondar Sibur Holding Li, Hongbo Sinopec Chaomei Chen Sinopec Lou, Zhengfang Sinopec Qingshen Wang Sinopec Guojun Zheng Sinopec Zhang, Yong Sinopec Xiuxia Yang Sinopec Genhong Zhang South Hampton Resources Tony Phoo Standard Chartered Bank Mark Mueller Stemaco Walter Mueller Stemaco Stefan Mueller Stemaco Erica Chang Taiwan Rubber & Elastomer Industries Association Hung, Chung-Lu Taiwan Rubber & Elastomer Industries Association Takayuki Nakanohara Thai Synthetic Rubbers Suehiro Masarou Thai Synthetic Rubbers Thawat Chansorn Thai Synthetic Rubbers Hideyuki Itose TOSOH Akira Omura TOSOH Sandra Straube Trinseo Ralf Irmert Trinseo Deutschland Alice (Wan-Ling) Yuan TSRC Roger Chiu TSRC Kevin Liu TSRC Hendrick Lam TSRC Chin- Bao Lu TSRC Joseph Chai TSRC Wei-Hua Tu TSRC (retired) Toshihiro Hiraki UBE Shigeru Mori UBE Lucio Spelta Versalis Marco Chiappani Versalis Graziana Carianni Versalis Enrico Lucchese Versalis Henrique Gemperle Welding Engineers Hiroyuki Hirakawa Zeon Kazuhiro Takahashi Zeon

Table of Contents

209

Social Program Attendees

First Name Last Name Company Diana Irmert Germany Jinni Gemperle Switzerland Margaret French United States Tonya Taylor United States Stephanie Archey United States Kim Trocano United States Karen Humphries United States Pam Hertl United States Lorena Salinas United States

Table of Contents

Our Next AGM Will Take Place in Madrid, Spain

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