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9 April 2018

allnex 2020 vision...for Decorative and Industrial Wood markets

“Associaciao de Tintas en Portugal” - March 2018

Philippe De Micheli Technical Service & Business Development Director

LRA business EMEA

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allnex 2020 vision...for Decorative and Industrial Wood markets

‒ Market & trends 2018 , Macro-drivers & their impact on technology –

‒ allnex offerings for Decorative Paints & Industrial Wood –

‒ The vision 2020 – Innovation in action –

‒ Conclusion

Agenda

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Market & trends 2018 , Macro-drivers & their impact on technology

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▪ A difficult year 2017 in coating industry→ Weather catastrophes, lack of investments in Europe and US on top of

Chinese environmental actions paralyzed some suppliers & several Force Majeures kept markets tight.

▪ Brent has risen nearly 50% since June 2017 → Brent has passed the 70$/bbl. level for the first time since December 2014.

→ 2018 average oil price will be above 2017 average.

▪ Strong demand & high oil price continue to push up feedstock’s : Propylene… as well as Benzene and Methanol”

→ Propylene +45% - 70% since January 2016. Constraints, production hiccups & tight supply impacting mainly acrylic esters.

→ Benzene +50% & Methanol +45% - 90% since January 2016. Methanol global shortage, strong demand in China and tight European supply/demand situation impacting MMA, Hydroxided, TMP...

→ Tight market for HDO, TMP, Adipic Acid, Peroxides and Epoxy Resin

Market & Trends 2018 -

Market & Trends 2018 -

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▪ Europe and US are in urgent need of investments → Lack of investments– due to prices below re-investment economics – have

caused record Nr. force majeure in 2017 leading to sudden supply hick-ups & price hikes.

▪ China undergoes a major transition → Transitioning from a cost-based, export-led, manufacturing powerhouse, to an

economy based on higher value, safer & environmentally friendly manufacturing.

→ China is no longer a “cheap” source of commodity raw materials, flooding overseas markets with its cheap manufacturing surpluses. It has started exporting inflation.

→ Part of this is an environmental campaign, aiming to solve both the pollution crisis and the oversupply in certain chemical sectors. The government is committed to continuing its implementation in 2018.

→ Expect further supply hick-ups and raw material price increases.

▪ Forecast 2018 remain pessimistic - Upward raw material price trend expected to continue - at least in H1 2018

Macro-drivers -

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▪ Sustainability drivers –→ Regulations on VOC and toxic substances→ Emerging requests for bio-sourced & renewable - at no premium→ Increasing pressure for green/sustainable technologies and labeling –

Market pull from industry initiatives and Green Labels....

▪ Cost drivers –→ Changing substrates (composite wood, plastics...)→ Blending to decrease prices → Increasing focus on ease-of-use & fit-for-use→ Drive for universal systems in DIY market. One binder fits all...

▪ Productivity drivers –→ Reducing number of layers & DFT while keeping same performance→ Broader application window (SB behavior)→ 1K with 2K performance→ Increased durability (>15 years) - low yellowing→ Need for smart coatings (e.g. easy to clean, self-healing, health care...)

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Impact for the technology –

▪ Solvent based systems -→ SB-alkyds market predicted to decline... but arising opportunities for High-Solid

(highly durable/non-yellowing) alkyds.→ New ECHA restrictions enforcing the need for NISO solutions for 2K systems...

▪ Water based systems -→ Need for WB systems having good cost-performance balance→ Need for “longer application window” WB acrylics → Need for WB alkyds & hybrids to mimic solvent based look (gloss and body)→ Increasing opportunities for wood care, impregnation & wood treatment→ Increasing use of blending resins & Hybrids (PU, alkyd- acrylic...) for better

robustness...

▪ Additives -→ Technology shift favor the use of more additives in WB→ Market trends open up opportunities for new and more sophisticated products → Focus on universal materials (dispersants, leveling additives...)→ Strengthening ECHA regulations on cobalt forcing the development of new and

efficient siccative alternatives...

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allnex offerings for Decorative Paints & Industrial Wood

allnex offerings for Decorative Paints & Industrial Wood

Application Product group

Water based

Deco (Trim, DIY wood flooring, deck stain, indoor, outdoor) Furniture

CationicIndoor Epoxy esters Limited products available – stain blocking !

Technology/Function Comments (e.g. based on market trends)allnex offerings

Thermoplastic acrylics Very cost competitive market

Self-crosslinking acrylics SB Behavior - superior performance

Alkyds Gloss, solvent base appearance, sustainability

PUDLimited products available No identify opportunity for differentiated materials.

Deco outdoor

Solvent borne

Competitive market. long oil alkyds blockbusters New high solid, durable, non yellowing for outdoor

Alkyds

Broad portfolio SB and WBOur major “combined” strengths in Alkyds & WB acrylics

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The vision 2020 – Innovation in action –

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Key Features

▪ Fast drying▪ High gloss▪ Outstanding water and chemical resistance▪ Excellent weathering resistance, ▪ Excellent wood penetration ▪ Substrate adhesion

Vision 2020 – innovation in action - Decorative Wood

▪ New Oil-modified multi-domain acrylic dispersions.

→ VOC & surfactant free acrylic “technology platform” – patented technology.

→ Closing the gap between alkyd and acrylic resin technologies.

→ Fulfilling requirements of several applications e.g.: Deck stain, Trim, Stain blocking primer and Multi substrate adhesion primers on difficult substrates such as HPL (high pressure laminates).

→ RESYDROL® SF 8010 (flexible) & RESYDROL® SF 8011 (harder) for deck stains. These new materials bring extended weathering and durability, excellent wood penetration and easy application and maintenance through superior film erosion control.

→ RESYDROL® SF 8000 for interior trims, multi adhesion & anti bleeding (versatile use)

▪ Trim exterior (meets Joinery/Blocking)

→ New SETAQUA® 6799 Surfactant free dispersion of acrylic monomers for trim exterior(meets Joinery).

→ Specific benefits for Deco are the surfactant free stabilization mechanism allowing broader formulation latitude, excellent application properties when brushed or rolled, good balance of exterior and interior properties and the possibility to formulate zero-VOC systems.

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Early blocking500µm

Early Water

Cold check

Kӧnig hardness

EN-927-6 (QUV)

Dirt pick-up

Key Features

▪ Excellent early water resistance▪ Excellent block resistance▪ Excellent outdoor durability▪ Very low dirt pick-up▪ Non yellowing ▪ Transparency

Vision 2020 – innovation in action - Decorative Wood

‒ Market reference‒ SETAQUA® 6799

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Vision 2020 – innovation in action - Decorative Wood

▪ Hybrid/trybrid technology for 1K air drying DTM – New technologies highlighting performance improvements over more conventional approaches.

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▪ New Cobalt free drier technology

→ ADDITOL® dry CF series - Based on a “twin aromatic heterocyclic nitrogen accelerated Manganese” – Designed for premium performance – patented technology.

0

1

2

3

4

5Set dry

Through dry

Hardness

Discoloration

Skin formationWB compatibility

SB compatibility

Anti-corrosionsystems

Performance afterStorage

Cobalt metal drier

Mn complex drier

Fe complex drier

allnex next gen drier

Vision 2020 – innovation in action - Decorative Wood

Key Features

▪ Excellent performance stability under ageing – CF series do not have the drop in performance

▪ Good resistance to skinning – similar to cobalt systems

▪ Universal use ▪ Low discoloration tendency▪ Improved corrosion resistance for

DTM applications ▪ Improved yellowing over traditional

cobalt containing driers▪ Early hardness development

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allnex strategic focus – Vision 2020 – Industrial Wood

▪ ACURE™ (SB NISO) technology for Wood coating.

→ ACURE™ is built on (very fast) Michael Addition Chemistry. The ACURE™ system changes the game with a new (patented) blocked catalyst and kinetic control system .

Key Features

▪ Faster dry & much longer pot life

▪ Cures at lower T° & thicker films per application

Customer benefits

▪ Reduced paint waste & faster return to service

▪ Extended painting seasons (efficiency improvements in painting processes)...

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allnex strategic focus – Vision 2020 – Industrial Wood

▪ L-QUAT system (WB NISO) for Tannin and knot bleeding

→ The L-QUAT system is a 2K system based on an epoxy-functional acrylic dispersion, combined with an acrylic emulsion containing both tertiary amino and carboxylic acid groups.

→ L-QUAT was compared with conventional tannin-blocking primers based on several types of anionic binders and has been proven to have superior properties on soft wood.

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4. Conclusion –

Conclusion

▪ allnex offers a full portfolio of products for Decorative Paints & Industrial Wood.

▪ Our main offerings include Alkyds and WB acrylics but we also provide specific chemicals including PUD’s and cationic epoxy esters having unique features for stain blocking resistance.

▪ allnex sees tremendous potential in developing technologies reducing VOC-content, energy consumption and toxicity aspects of coatings.

▪ We are developing a new generation of regulation compliant and sustainable range of resins & additives. This is including surfactant and ADH free WB acrylic resins, new cobalt free efficient drier alternatives, NISO solutions for SB and WB systems, new hydrid resins for DTM (Direct to Metal) and much more...

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Innovation remains a key driver for differentiation at allnex

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9 April 2018

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