TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO … 2009/TPE... · TPE APPLICATIONS AND TECHNOLOGIES...

1

TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO RECESSION AND GLOBALIZATION

PRESENTED BY:Bob EllerRobert Eller Associates LLCPhone: 330-670-9566E-mail: bobeller@robertellerassoc.comwww.robertellerassoc.com

PREPARED FOR:

TPE 2009Frankfurt, Germany

November 11, 2009mydox/papers/TPE 2009 ppt 110509.ppt

ManagementDECISIONS

ANALYSIS

MA

RKET

ECON

OM

IC

TECHN

ICA

L

Robert Eller Associates LLCCONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES

2

• Macroeconomics/Globalization: Effects on TPE Markets and Technologies

• Western/Asian Differences

• China TPE Market

• Global Automotive Market

• TPE Growth Applications: Evolving Market Dynamics

• Summary

OUTLINE

3

TPE(d) FAMILIES . . .CHANGING STRUCTURE, INCREASED INTRA-TPE COMPETITION

TPE FAMILIES

OLEFINIC(o-TPEs)

STYRENIC(SBCs)(f)

SUPER-TPVs PVCTPEs

OTHERE-TPEs

s-TPO o-TPV HYDRO-GENATED(H-SBC)

ISOPRENE-BASED MID-

BLOCKS

SILICONE

ACRYLATES

OTHERCOPE

COPA

TPU

p-TPV(d)(PARTIALCROSS-LINKED)

f-TPV(d)(FULLYCROSS-LINKED)

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

COMMODITYTPO

OBC(c) AND NANO CRYSTALLINEOLEFIN ELASTOMER(b)

SBS

r/mydox/tpe/TPE Families 101209.vsd // lg/myfiles/visio/TPE Families 101209.vsd

OTHERSr-TPV

(a)

Notes: = Production dominated by resin supplier s(a) Recyclate-based TPV(b) e.g., Notio TM from Mitsui Chemicals(c) e.g., Dow's Infuse TM

NEWENTRANT

(e.g.,KRAIBURG)

*

*

*

*

*

* (d) In Asia, the term "TPE" is often used to describe styrenic TPEs(e) Sometimes referred to as TPE-V(f) Sometimes referred to as TPE-S

4

MACROECONOMIC CONDITIONS/GLOBALIZATION

• At Least 2-year Trough

• Global Mfg. Rebound Since April ‘09: - Government subsidies- Auto scrappage programs- Slowed unemployment claims- Slowed GDP declines

• Manufacturing Shift: West ���� Asia

5

GLOBAL ECONOMIC GROWTH: 2 YEAR TROUGH

0

1

2

3

4

5

6

7

8

9

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

SOURCE: IMFb/mydox/rapra 2008/rapra 2008.xls

AN

N. %

CH

AN

GE

(A

T P

PP

)

ADV. ECON.

EMERG. ECON.

WORLD

6

MFG. PURCHASING MANAGERS' INDICES (PMIs)

0

10

20

30

40

50

60

70

Jul-0

8Aug

-08

Sep-0

8

Oct-08

Nov-0

8

Dec-08

Jan-0

9

Feb-09

Mar-0

9

Apr-0

9

May-09

Jun-0

9

Jul-0

9

SOURCES: FINANCIAL TIMES; ROBERT ELLER ASSOCIATES LLC, 2009b/mydox/papers/TPE sectors 09.xls

GR

OW

TH IN

DE

X

(<50

= C

ON

TRA

CTI

ON

)

US INDIAEUROZONE CHINA

EARLIER START TO RECOVERY IN CHINA/INDIA

RECOVERY START U.S./EUROPE

7

WESTERN/ASIAN DIFFERENCES

• Asia (Esp. China) Rebound:- Faster recovery than Western regions

-- Large, government stimulus programs -- Western downturn hurting exports-- Deep interest rate cuts

CHINA GROWTH

10.02008

2010

2009

2007

Year

9.0

7.8

11.9

GDP Growth, %

Growth due to gov’t. programs and some gain in the domestic economy

Note

Source: Robert Eller Associates LLC – Asia Div., 20 08

8

WESTERN/ASIAN DIFFERENCES (Cont’d.)

• TPE Market Sectors:- Europe and U.S. similar demand distribution- Auto applications dominate (~40% of demand)- Broad demand distribution amongst other mkts.

• TPE Demand in West Impacted By:- Recession conditions - Severe auto production downturn - Consumer end market production shift to Asia

9

EXHIBIT 3 GERMAN MANUFACTURING AS % OF GDP

15%

20%

25%

30%

35%

1990 1995 2000 2005

SOURCES: UNICREDIT RESEARCH; ROBERT ELLER ASSOCIAT ES LLC, 2009b/mydox/TPE Frankfurt 2009/TPE sectors.xls

MA

NU

FA

CT

UR

ING

, % O

F G

DP

GERMAN MANUFACTURING AS % OF GDP

10

GLOBAL AUTOMOTIVE MARKET

• Largest single market for olefinic and styrenic TPEs, even in China

• Global automotive vehicle production fell sharply in 2008/2009

• Global recession/high fuel prices/carbon footprint awareness create new auto TPE paradigm: - Fleet composition shift to smaller vehicles - Extensive use of government incentives

(scrappage/CO2) � short-term sales stimulus- Strong support for electric drive/battery vehicles - Moderate fuel economy (CAFE) shift in U.S.

11

EXHIBIT 2 DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

AUTOBLD

G/CONSTR

MEDICAL

APPL/TOOLS

PERS CARE/C

OSMETIC

SFLU

ID H

ANDL'G/IN

DW

IRE/C

ABLECONSUMER/H

SWR

SPORTS/ LEIS

URE

FOOTWEAR

E/E &

COMM

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009 b/mydox/TPE Frankfurt 2009/TPE sectors/xls

DE

MA

ND

, %

NA

EUR

DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs

12

GLOBAL VEHICLE SALES OUTLOOK

0

10

20

30

40

50

60

70

80

90

1975 1980 1985 1990 1995 2000 2005 2010 2015

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009r/mydox/Auto Industry/Global Ind Volume TW 081209.xls

VE

HIC

LE S

ALE

S, M

M U

NIT

S

Annual Growth1990-2000 2.4%2000-2005 3.6%2005-2015 1.3%

2000: 57

2009: 9% DECLINE

FOLLOWED BY RECOVERY IN

2010/2011

42% in 15 emerging markets; 58% in Europe/U.S./Japa n

2015:77MM

13

U.S. AND EUROPE LIGHT VEHICLE SALES

6

8

10

12

14

16

18

20

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

SOURCE: DEUTSCHE BANK, 2009B/mydox/auto industry/NA and EUR sales.xls

SA

LES

, MM

UN

ITS

U.S.

EUROPE

14

THE OIL PRICE ROLLER COASTER: AUTOMOTIVE TPE DEMAND

Source: Foreign Affairs , Sept./Oct. 2009

Have the 2008 fuel price spike and tipping point permanently shifted:

• fleet composition?

• lightweighting incentives?

• break-even volumes?

15

REGIONAL DIFFERENCES IN o-TPV USAGE IN AUTOMOTIVE

2.0

1.4

China

2.6

2.1

Global

kg/Vehicle

1.52010:

2005: 0.9

India

o-TPV Penetration in Auto Still Low in China/India

16

AUTO TPE GROWTH APPLICATIONS

• China/India auto o-TPV growth opportunity

• Auto lightweighting: - Driven by fuel price increases - TPO growth in exterior panels (e.g., Ford Kuga)

• Rubber challenge continues - High heat and oil resistance - Body/glazing seal substitution continues

• Reduced cost luxury auto interiors (small car effects)

• TPO solar opportunities (PV roof/wall shingles)

• Halogen-free, flame retardant (mobile electronics)

17

W . E U R O P E A N V E H IC L E M A R K E T S H A R E S H IF T

0

1 0

2 0

3 0

4 0

5 0

6 0

A/B C /D

F L E E T M A R K E T S E G M E NTb / myd o x / jec 0 9 / eur o m ix s hi f t .x ls

SA

LES

SH

AR

E,

%

2 0 0 52 0 0 9 (E S T )

S o u rce s : JD P o w e r ; D e u tsch e B an k ; R o b e r t E lle r Ass o c . L L C , 2009

TPE 2009 ppt.ppt

18

NEW AUTO PARADIGM: TPE EFFECTS

• Drives up the value of weight savings: 10% wt. reduction � 7% fuel economy improvement

• Further restructuring of auto supply chain

• Encourage parts consolidation

• Encourage PP compound demand (esp. glass fiber/PP) � stimulates use of olefinic TPEs

• Favors TPE systems applications

19

EXHIBIT 9: MACROECONOMIC DRIVERS, NEW PARADIGMS, A ND AUTOMOTIVE TPE OPPORTUNITIES

Note: (a) DIRECT COMPOUNDING = D-LFT, AT-PRESS FIL LER ADDITION, ETC.

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

AUTO SALES DECLINE,SLUGGISH RECOVERY

GLOBAL RECESSION

OEM MARKETSHARE SHIFT

SUPPLY CHAINCONSOLIDATION,REORGANIZATION

SHIFT OF TECHNICAL CHOICES

AVOIDCAPEX

LEAN SUPPLYCHAIN CHOICES(REDUCE UNITOPERATIONS,

SYSTEMS COST)MAXIMIZEEXISTING

TECHNOLOGY

- DIRECT COMP'DG.(a)- 2-SHOT MOLDING- IN-MOLD FOAMING- TPV, SEBS BODY/ GLAZING SEALS

IN-MOLDDECORATIONSURFACINGMETHODS

- FUEL EFFICIENCY- CO2 DISCHARGE LEGISLATION

FUEL PRICEINCREASE (DEMAND,

TAXATION)

- ELECTRIC DRIVE- HYBRIDS

GLOBAL FLEETCOMPOSITION

SHIFT TO SMALLERVEHICLES

INCREASEDVALUE FOR

LIGHTWEIGHTSOLUTIONS

INCREASED VALUEFOR PERCEIVED

INTERIOR LUXURY

BATTERYRELATED

SUBSTITUTES

LGF-PP BODYSTRUCTURE

TPOOUTERSKINS

WIRE/CABLEJACKETING

SOFT TOUCHVIA SEVERAL

TECHNOLOGIES

EMERGINGMIDDLECLASS

ECONOMICALLYTRAILING

CLASS

- LOW COSTVEHICLE DESIGNS

- 2-WHEELERS

TPODEMANDSHIFT TO

EMERGINGREGIONS

THERMO-FORMED

TPO SHEET,LOW COSTTOOLING

r/mydox/auto industry/MacroE Auto TPE 09.vsd // lg/myfiles/visio/MacroE Auto TPE 09.vsd

ENERGY/ENVIRONMENTAL DRIVERS EMERGING MARKET SHIFTS

MACROECONOMIC DRIVERS, NEW PARADIGMS, & AUTO TPE OP PORTUNITIES

20

CHINA TPE MARKETS

• China: Key role in global TPE demand/demand growth

• Unique Characteristics: - Largest regional TPE market - Highest regional growth rate (’09 – ’14) - Western transplant compounders/resin suppliers

must compete with domestic suppliers -- Significant domestic cost/market access

advantage - Highly export oriented- Rapid domestic market growth (limited focus

to date by Western transplant compounders)

21

EXHIBIT 4: DURABLE GOODS OWNED PER 100 URBAN HOUSE HOLDS IN CHINA

SOURCES: CHINA NATIONAL BUREAU OF STATISTICSROBERT ELLER ASSOCIATES LLC 2009

r/mydox/China/China Durable Goods 09.ppt

0

20

40

60

80

100

120

140

160

180U

NIT

S/1

00 H

OU

SE

HO

LDS

1990 1995 2000 2006 2007

MotorcycleRefrigeratorAir ConditionerColor TVComputerMobile TelphoneCar

DURABLE GOODS OWNED PER 100 URBAN HOUSEHOLDS IN CHI NA

22

CHINA TPE MARKETS: QUALITY TIERING

• Accommodates Different Target Market Segments

• Domestic Quality Tiers (Global/Local):Substantially under-served by Western TPE compounders

23

CHINA TPE MARKETS: GLOBALIZATION AND LOCALIZATION COMPETITION

• Globalization: - Meet global specifications and quality standards- Serve global OEMs from China - Mfg. base starting to shift to other regions

• Localization: - Global compounders in China localize raw

materials supply chain - Target domestic Chinese OEMs and transplant

OEMs- (Often) using different TPE compounds for

domestic customers

24

CHINA DOMESTIC TPE COMPOUNDER ADVANTAGES vs. TRANSPLANTS

• Utilize local raw materials; broader range of raw material types and sources

• Lower labor costs than Western transplant compounders

• Lower capital depreciation costs (by factor of 4-10X)

• Lower packaging costs

• Lower shipping costs

• Government subsidies

• Government funded R&D institutes

25

QUALITY/PERFORMANCE TIERING IN THE CHINA TPE MARKET

Low End

Local

Glocal

Global

Low

Local standards

Near Global

High

QUALITY

Low

Local requirements

Near Global

High

PERFORMANCE

HighHigh

Near GlobalModerate

LocalLow

LowNone

PRICESERVICE

Source: Robert Eller Associates LLC, 2009

26

QUALITY TIERING OF CHINA MARKETS

Source: Robert Eller Associates LLC, 2009

Low End *

Local *

Glocal *

Global

MARKET SEGMENT

Products produced for global market, meeting global quality and performance standards at global pricing

Products produced for domestic and export markets w ith near global quality and performance standards, with near global pricing

Products produced for the local market, meeting loc al performance, quality, and price requirements

Products marketed based solely on price, with low concern for quality and performance

PRODUCT/QUALITY DEFINITION

Note: * = Will gain share in global recession

27

EXAMPLES OF TPE QUALITY TIERING

Source: Robert Eller Associates LLC, 2009

Not usedTSRCHotaiGLS Thermoplastic Elastomers/ PolyOne

SEBS Compound Supplier

o-TPV Supplier

SEBS Resin Supplier

Typical Compounding Extruder Supplier/Type

Toothbrush Supplier

-ExxonMobil(Santoprene)

-DSM (Sarlink)

Kraton

Coperion ZSK: designed & mfd. In Germany

Colgate Palmolive

GLOBAL

TSRC

Coperion STS: designed & partially made in Germany, remainder made in China; Cost ~40% of ZSK

San Xiao

GLOCAL

1-time use (e.g., hotel amenities)

San Xiao

Coperion CTE: designed & mfd. In China; Cost ~15% of ZSK

Wide specBaling

Shandong Dawn-BH Elastomer Co. (Dawnprene)

LOW ENDLOCAL

28

CHINA INVESTMENT BY WESTERN COMPOUNDERS

• Accelerated prior to recent downturn

• Some majors elected not to invest in local manufacturing facilities: - Kraton - Dynasol - ExxonMobil - DSM

• Recent lifting of import duties from Singapore into China suggests Singapore will continue to see investment by Western (and Japanese) TPE suppliers

29

TPE GROWTH APPLICATIONS RESULTING FROM EVOLVING MARKET DYNAMICS

• Automotive Lightweighting

• The Rubber Challenge Continues

• Solar Opportunities

• Halogen-free, Flame Retardant (HFFR)

• Bio-based TPEs

• Breathability

30

-Uses 2-3 co-extruders to produce o-TPV/PP compound, rigid/flexible profiles

- Krauss Maffei is equipment supplier- Used on VW Golf VI- DSM TPE is o-TPV supplier

-Compression set-Dimensional stability-Foamability?-Surface quality

o-TPV-Triple co-extruded glazing profiles

->3 coextrusions possible

Auto

- Solar is growth sector-Meet HFFR regulations-Heat resistance

o-TPVGaskets

- Solar is growth sector-Meet HFFR regulationsSEBS, o-TPVWire/CableSolar Modules

- e.g., TPSiV (Dow Corning)-Silky touch super TPVEarplugs, cell phones

- f-PPE is key HFFR incumbent- Meet RoHS/WEEE requirements - See REA database

-Meet HFFR regulations-Low smoke -Low oxygen index

SEBSWire/CableMobile Electronics

- XLPE, PVC are key incumbents-High temperature, flame retardant requirements

SEBS, TPO/TPV, TPU

Wire/Cable

- DuPont, Multibase, Nippon Zeon, - Kraiburg (recently)- COPE challenge?

-Heat and oil resistancesuper TPVsHeat/Oil resistant applications, gaskets, etc.

- From LyondellBasell, Dow, ExxonMobil

-Soft touch with sufficient stiffness/impact

TPOFiber reinforced soft touch

- SEBS TPEs challenging EPDM in this high performance application

- o-TPVs also challenging EPDM

-Glass bonding with single component overmolding

-High flow properties

SEBSWindshield seal

- Kraiburg for BMW-Injected adhesive to bond engineering plastic layers

SEBSTailgate spoiler

SOURCE/NOTEKEY TPE PROPERTIESTPE TYPEAPPLICATIONSECTOR

EXAMPLES OF RECENT NEW TPE APPLICATIONS

(Cont ’d.)

31

- Kraton- TPU is major incumbent

-Breathable/impermeablemodified(sulfonated)

SBC

-Desalination-Breathable fabrics

Membrane,Breathable

-Biodegradability SEBS?TPU?

Biodegradable TPEs

Consumer Disposables

- Kraton - Film/sheet applications- NotioTM (Mitsui Chemicals) competes

-Fine dispersion/ transparency -Impact modification -Avoid oil -Scratch resistance

SEBSImproved grades for PP modification

- Merquinsa- Kraiburg- GLS/PolyOne

-Food contactTPU, SEBSBio-based TPEsMultiple sectors

- More advanced in Europe than U.S. -Compression set -UV resistance -Processability

SEBS, o-TPVGasketsBuilding/ Construction

- Highly dependent on government regulations

-PVC substitution -Kink resistance-Low modulus -Processability -Heat sterilization

SEBS, TPO-IV sets -other applic.

Medical

- Example of TPO expanding from auto

-PV on TPO substrateTPOShinglesSolar Modules

SOURCE/NOTEKEY TPE PROPERTIESTPE TYPEAPPLICATIONSECTOR

EXAMPLES OF RECENT NEW TPE APPLIC. (Cont’d.)

Source: Robert Eller Associates LLC, 2009

32

TPO/o-TPV: MAJOR AUTO GROWTH SECTOR

• New soft touch candidates/fabrication technology

• TPO demand stimulation from reinforced PP compound growth

33

HATCHBACK DOOR: GROWTH APPLICATION FOR TPOs

Vehicle: Ford Kuga (2010)Application: Roof spoiler, tailgate outer panelGrade: LyondellBasell Hifax TRC 280XMolder: Plastal

REA Notes: - Inner panel is LGF-PP compound

(Stamax from SABIC)- Design transfer to U.S. (2010)Photo: Robert Eller Associates LLCr/mydox/papers/spetpo2009pix.ppt

34

HATCHBACK DOOR INNER: GROWTH APPLICATION FOR LGF-PP

Part: Hatchback door inner panelMaterial: 40% LGF-PPStatus: PrototypeMolder: PlastalProcess: D-LFT (injection)Equipment: Krauss MaffeiNote: Competes with LGF-PP compound

Photo: Krauss Maffeir/mydox/papers/spetpo2009pix.ppt

35

AUTO SOFT TOUCH REINFORCED TPO/o-TPV

• Small vehicle share increase:

- drives towards higher quality interiors without high cost of multi-step processes

- new generation of glass fiber reinforced, molded-in color TPOs with soft touch surface for interiors:

-- improved scratch and mar -- low knit line visibility -- low gloss -- compete with soft touch paints/

thermoformed or slush molded skins

36

• E-LF-PP gives high load bearing and impact absorbency • Translation potential for rear seat backrest

Source: Weber Automotive; ESORO AG

• 20% stiffness increase vs. earlier version

• LGF-PP move into body structures

• Early use of E-LF-PP (endless long fiber polypropylene)

• Mineral-filled TPO exterior skin

MERCEDES SMART FORTWO TAILGATE: PRECURSOR FOR LGF-PP AND TPO IN BODY STRUCTURES?

37

Source: Weber Automotive; ESORO AG

Metallic front and rear elements

Double shell floor

DESIGN CONCEPT FOR E-LGF-PP BASEDCOMPACT CAR BODY STRUCTURE

Thermoset competition?

38

Source: Robert Eller Associates LLC, 2009

EXAMPLE OF LGF-PP & E-LF-PP DIRECT PROCESS

39

SOME TPE LIFE CYCLE POSITIONS

• Early Growth Auto TPOs: - Soft touch - Exterior body panels - Body structures?

• Early Growth SBCs: - Bio-based (also TPUs) - Body/glazing seals

(competes with EPDM and o-TPV) - HFFR/PVC replacement

(mobile electronic wire and cable growth)

40

AUTO TPO LIFE CYCLE POSITIONS

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

HIGH

MEDIUM

LOW

RE

LAT

IVE

VA

LUE

ADV. R/D; INTRODUCTION GROWTH MATURE

LIFE CYCLE POSITION

r/mydox/papers/Auto TPO Life Cycle 09.vsd // lg/myfiles/visio/Auto TPO Life Cycle 09.vsd

NOTES:

FIBER REINFORCED SOFT TOUCH

BODY STRUCTURES(a)

AIRBAG DOORS

IP SUBSTRATE

THERMOFORMED DOORTRIM SKINS(B)

BUMPERFASCIA

CLADDING

EXTERIOR BODY PANELS

2-SHOT SKIN/FOAM/SUBSTRATE

= ESTIMATED FUTURE DIRECTION

THERMOFORMEDIP SKINS(b)

(a) LGF-PP = LONG GLASS FIBER PP; E-LF-PP = ENDLESS (E.G., TAPE REINFORCED) LONG FIBER PP

(b) INCLUDES THIN PP (TPO) FILM TECHNOLOGY INTRODUCED IN EUROPE (BY JCI, OTHERS)

41SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

TE

CH

RE

QU

IRE

ME

NT

S

DEVELOPMENT INTRODUCTION EARLY GROWTH

r/mydox/TPE/SBC TPE Life Cycle 09.vsd // lg/myfiles/visio/SBC TPE Life Cycle 09.vsd

NOTE: (a) SOFT TOUCH GROWING IN AUTOMOTIVE

MATURE

BODY/GLAZING

SEALS(AUTO, B/C)

BIODEGRAD-ABLE

GRADES

HFFR

HIGH

MED

LOW

SBC TPE LIFE CYCLE EXAMPLES

PVCREPLACE-

MENT

FOOTWEAR

SOFT TOUCHNON-AUTO(a)

SOFTTOUCHAUTO

42

SUMMARY

• Global TPE Demand: affected by end use market shift to Asia

• Auto: - High share of demand and growth - Severe recession demand effects - China auto growth will stimulate demand - New auto paradigm- New applications will stimulate TPO, o-TPV,

SBC

43

SUMMARY (Cont’d.)

• China TPE Market: - Export/slowdown impacts- High growth domestic (glocal/local markets) - Western vs. domestic compounder competition

• High Heat/Oil Resistance: stimulated by new entrant?

• HFFR/Low Smoke: wire and cable stimulates several TPEs

• TPE Profitability in the New Paradigm – REA’s client focus

44

ABBREVIATIONS

c-TPO – compounded TPOCAFE – Corporate Average Fuel Economy (U.S.)COPE – copolyester-type TPEGDP – gross domestic product HFFR – halogen-free, flame retardantLGF-PP – long-glass fiber reinforced polypropyleneLGF-TP – long-glass fiber reinforced thermoplastic MNC – multinational company or compoundero-TPV – olefinic TPVPP – polypropylener-TPO – reactor TPOSBC – styrene block copolymer type TPE (may be SEBS or SBS) TPE – thermoplastic elastomer (all classes of thermoplastic

elastomer; SBC, TPO, o-TPV, TPU, etc.); note in some regions (e.g., Asia), “TPE” is used to refer to SBC-type TPEs

TPO – thermoplastic polyolefinTPU – thermoplastic polyurethane

45

46

CHINA: STRATEGIC RIVAL OF WEST?

• Global Power Position: Emerging power, comparable to U.S. at start of 20th century

• Economic Expansion: Outpaces West - 8.9% in 3Q/09 vs. 3.5% in U.S. - Provides economic leverage - Will soon overtake Japan as global #2 economy - Larger than U.S. economy by 2040-2050

• Largest Global Exporter - 1 year trade surplus = US$250BN - U.S. largest export target

(trade deficit = US$575BN [12% Wal-Mart])- Flood of cheap, Chinese-manufactured goods

swamping global economies (job implications)

47

CHINA: STRATEGIC RIVAL OF WEST? (Cont’d.)

• Largest Creditor Nation (holding $2 trillion in USD assets) -Provides huge trade leverage over U.S. -Could threaten dollar exchange rate

• Voracious Raw Material Demand (political implications)

• Dominant Economic Player in SE and NE Asia

• Key Global Power (influence on global disputes, e.g., N. Korea and Iran)

• Massive Military Modernization Program

• Building Port Facilities in Pakistan, Sir Lanka, Myanmar � ? major global naval power