Natpet Schulman Specialty

Plastic Compounds

Helmi Kutbi President, Down Stream Industries Natpet

Bernard Rzepka Executive Vice President, COO

Overview of Partners

NATPET • Joint Saudi Joint Stock Company, established in 1999 • Alujain, Xenel and GOSI are the major stockholders • Produces 400,000 MT/ year propylene/polypropylene in Yanbu Industrial City • Using the prestigious state of the art Spheripol® process from LyondellBasell • Logistic hubs in Europe and Asia to better serve the key markets

A. Schulman (Nasdaq: SHLM) • International supplier of custom performance colors, masterbatch solutions,

specialty powders, engineered plastics used in a variety of consumer, packaging, industrial, and automotive applications

• Corporate headquarters in Akron, Ohio • Reported net sales of $2.1B for fiscal year ended August 31, 2012 • 35 manufacturing facilities • Approximately 3,300 associates • Founded in 1928 by Alex Schulman

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NATPET Schulman Joint Venture • NATPET-Schulman Engineering Plastic Compounds is a 50-50

joint venture based in Saudi Arabia

• JV will build an efficient, cost-effective and state-of-the-art manufacturing facility to produce and globally sell polypropylene compounds by the end of calendar-year 2014

• Will serve a broad range of customers in the Middle East, Africa and India and will capitalize on growing demand for durable goods & transportation products

• A. Schulman is distributing

polypropylene resins for NATPET in Europe to specified customer segments outside of JV agreement

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• By bringing technology and creating employment in the Kingdom, KSA offers incentives for investment :

• 50% to 75% of the investment is advantageously financed via Saudi Industrial Development fund ( SIDF)

• KSA offers the most favourable industrial environment in the ME

• Low energy , labour, raw materials costs

• Impressive development of down stream industries in the KSA and more recently the automotive sector

• Excellent proximity to major markets served i.e. Turkey , India, Europe and Asia

JV in the KSA : Major Drivers

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Polypropylene Usage/ Automotive Plastics

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Automotive Plastic Consumption by Type

All plastics will show steady growth over the forecasted period

Key Markets for Polypropylene Compounds

• Automotive PP compounds are widely used in all application areas (interior, exterior, under the hood and power train)

• Electronics & Electrical Largest consumer is the appliances industry

• Building & Construction Typical applications range from stadium seating to power tools

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Major Trend in Automotive is Light-weighting

According to a recent study by A. T. Kearney the usage of plastics in cars is expected to increase significantly to 18% of the total car weight.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1970

1980

1990

2000

2010

2020

14%

14%

17%

18%

18%

20%

79%

76%

65%

63%

61%

55%

6%

9%

13%

14%

16%

18%

Percentage of total vehicle weight

Others

Metal

Rubber

Plastics

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Major Trend in Automotive is Light-weighting

• Reduces fuel consumption

• Reduces carbon emission

• PP is the polymer of choice for lightweight applications because of its low density

Reduction of car weight by 100kg results in CO2 reduction of about 8.5g CO2 /km.

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Establishing an R&D center for PP compounds in Yanbu:

• Close technical interaction between polymer plant and compounding plant

• Immediate response to market needs by:

– Offering locally developed custom compound solutions (includes the capability to modify the base polymer)

– High efficiency in scale up due to proximity of all elements of the value chain

• Clear focus on PP solutions with the aim to replace other plastics with PP compounds

• Local technical expertise for superior technical support for OEMs and converters in the region

Regional R&D Center

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The JV partners will establish a state of the art R&D center.

Regional R&D Center Timeline

2015 • Laboratory set up in Yanbu

• Mechanical and thermal plastic testing

2016

• Technology transfer via A. Schulman‘s technology centers

• Flame retardants and polymer testing

2017

• Sample production / formulation development

• Color matching capabilities

• Cooperation with technical colleges in KSA

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Examples of Joint Automotive Development

Close collaboration between raw material suppliers and OEMs / their suppliers yield exciting innovations

• Metallic colored materials for use in radiator grill & air inlet grill based on : • SCHULAMID® 66 MT5HI LS

• POLYFORT ® FIPP 10T

• 3D cooling water duct in water injection technology: • POLYFORT ® B

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Supply Chain advantages from the Yanbu Plant

• Excellent proximity to the automotive cluster

• Fast and reliable deliveries

• Stock products on demand for converters

• Made to order capabilities with a flexible lead time schedule

• Flexibility in packaging for custom requests

YANBU PLANT DESIGNED TO BE AN EXAMPLE OF

EFFICIENT SUPPLY CHAIN TO THE INDUSTRY 12

JV Designed to Meet Your Needs

• Positioned in the region with the right products with regional technical support

• Effective supply chain

• Fast development time

• Excellent turnaround time and service

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“As our Middle East markets continue to grow, we believe a strong presence in this critical petrochemical region will be important to achieve our strategic goals and we’re thrilled to have paired with a well-respected and high-quality resin producer.”

-- Joe Gingo

Chairman, President & CEO of A. Schulman, Inc.

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“Our JV expands Natpet’s reach as a key raw material provider to the cluster initiative in the Kingdom, and the fast developing Asian markets. Such a project will help the plastic industry in providing specialized material, brings knowhow to the kingdom, creates jobs, and adds value to the intermediary local petrochemical industry. We are proud to join hands with a leading global player in the engineering plastics compounding business”. -- Khalid Alireza Chairman, Natpet