Acrylic Acid & Esters - OrbiChem

1 Acrylic acid & EstersKeiji Wakatsuki, Tecnon OrbiChemTecnon OrbiChem Marketing Seminar at APIC 2012 Kuala Lumpur, 17 May 2012 Source: Tecnon OrbiChemAPIC 2012 Acrylic acid & Esters - FUNDAMENTALS World supply/demand balance becoming longoConsolidation in recent years by major global producers, but new Chinese capacity additions exceed demand growth oSAP demand growth is strong, particularly in the developing worldoPaints and coatings demand is weak-to-modest High propylene prices are challenging production economicsoUS faces high propylene prices and imports of downstream acrylatesoChina importing propylene to produce Acrylic acid and acrylates not viable long-term Technology trends are toward bio-based feedstock but issues of land use for food vs.

2 Chemicals may limit this US investment growing due to shale gas expansions01,0002,0003,0004,0005,0006,00 07,0008,00020082009201020112012201320142 0152016201720181,000 Metric TonsSource: Tecnon OrbiChemAPIC 2012 WORLD Acrylic acid SUPPLY & DEMANDC onsumptionCapacity05001,0001,5002,0002,5 0020082009201020112012201320142015201620 172018 Source: Tecnon OrbiChemAPIC 2012 CHINA Acrylic acid SUPPLY & DEMAND1,000 Metric TonsConsumptionCapacitySource: Tecnon OrbiChemAPIC 2012 Acrylic acid CAPACITY ADDITIONSC ompanyLocationktpaDateJiangsu JurongTaixing, China160 Dec 2011 Sanmu GroupTaixing, China160 Jan 2012 FPCM ailiao, Taiwan160 CancelledZhejiang SatelliteJiaxing City, China60 eJan 2012LG ChemYeosu, S Korea160 Mid 2012 CNOOCH uizhou, China160 Jun 2012 Jiangsu JurongTaixing, China160 Late 2012 SAMCJ ubail, Saudi Arabia160Q2 2013 Oita ChemicalOita, Japan80 eMay 2013PT Nisshoku AcrylindoCilegon, Indonesia80 Aug 2013 Nippon ShokubaiHimeji, Japan80 Aug 2013 BASF YangziNanjing, China160 e2014 Shandong KaitaiZibo, China80 e2014 Formosa ChemicalNingbo, China160 eQ1 2014 BASF Camacari.

3 Brazil160 End 2014 Jiangsu JurongTaixing, China1602014 JSC Gazprom NeftekhimRussia802015 Zhejiang SatelliteJiaxing City, China3202012-2015e = Expansion of existing capacity05001,0001,5002,0002,5003,0003,5 002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$/tonSource: Tecnon OrbiChemAPIC 2012 Acrylic acid vs PROPYLENE PRICESA crylic acid (del China)Propylene(exw Taiwan)02004006008001,0001,2001,4001,600 1,8002,0002,20020082009201020112012$/ton Source: Tecnon OrbiChemAPIC 2012 ASIA, W. EUROPE & US PROPYLENE PRICESAsia(exw)W. Europe(del)North America(del)APIC 2012 NEW PROCESS DEVELOPMENT Nippon Shokubaiis developing a new Acrylic acid process based on glycerine obtained from bio-diesel fuel production Future commercialisation in Southeast Asia Driving forces of technology development:oEnvironmental concerns (renewable raw materials)oHigh propylene price (high crude oil/naphtha prices)Source.

4 Tecnon OrbiChemVegetable Oil- H2O+ O2 GlycerineAcroleinAcrylic acid (By-product)+O2 Bio Diesel FuelPropylene (Existing process)China25%North America25%Northeast Asia19%East Europe1%West Europe22%Middle East & Africa2%South & Southeast Asia6%APIC 2012 Acrylic acid PRODUCTION BY REGION - 2011 Source: Tecnon OrbiChemTotal: Million TonsChina24%Northeast Asia21%Middle East & Africa2%East Europe0%North America26%South America1%West Europe21%South & Southeast Asia5%APIC 2012 Acrylic acid CONSUMPTION BY REGION - 2011 Source: Tecnon OrbiChemTotal: Million TonsAPIC 2012 CONCLUSIONS Acrylic acid and Acrylates supply/demand and economics present challenges for the future but new capacity will be curtailed due to propylene shortages and costs Strong demand for SAP in particular will support growth Bio-based developments stalled by food vs.

5 Fuel/chemicals land-use debate Investment opportunities exist in this area but propylene feedstock and technology challenges are barriers to entry Downstream opportunities in SAP are limited due to feedstock availability. Growth in paints and coatings demand is limited by sluggish economies in some regions, particularly West Europe Source: Tecnon source of expert chemical industry knowledg