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TSRC Corporation | 0
Synthetic Rubber’s Future
in India
Dr. Lee Pei Chou
March 16, 2012
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of TSRC Corporation is strictly prohibited
TSRC Corporation |
TSRC at a Glance
About Synthetic Rubbers
Synthetic Rubber Applications in Automotive Industry
Opportunities of Synthetic Rubber Industry in India
Conclusion
1 1
Contents
TSRC Corporation |
Who is TSRC? Date of Incorporation July 27, 1973
• Largest synthetic rubber company in Taiwan
• Listed on the Taiwan Stock Exchange with market
capitalization US $ 2 billion
Product
E-SBR, BR, NBR, S-SBR, SBC
(SIS, SBS and SEBS) and
Compound
Headquarters Taipei, Taiwan
Manufacturing Sites 9 Sites (Taiwan, China, USA India
&Thailand)
2011 Consolidated
Revenue USD $ 1,900 million
Brand Taipol, Vector, T-Blend
Total Employees 1,300
Web Site www.tsrc.com.tw
2
TSRC Corporation |
TSRC Global Presence
Kaohsiung, ROC
(ESBR, BR, SSBR, SEBS,
SBS, Compound, SIS,
C5-Isoprene, PIP, DCPD)
Indian Synthetic
Rubber Ltd (ESBR)
Dexco Polymers
(SBS, SIS)
Thai Synthetic Rubber
Company Limits (BR)
Taipei, ROC (HQ)
TSRC (LUX)
Polybus Corp.,
Singapore
TSRC(Hong Kong)
Limited., HK
TSRC (Shanghai)
Industries Ltd.
(Compounding)
TSRC(Jinan)Industries
Ltd. (Compounding)
Shen Hua Chemical Industrial Co. (SBR)
TSRC(Nantong) Industries Ltd (SEBS)
TSRC-UBE (Nantong) Chemical Industries (BR)
Lanxess-TSRC(Nantong) Chemical Industrial (NBR)
Nantong Qix Storage Co., Ltd.
Headquarter
Production site
Sales office
TSRC Corporation |
TSRC Plant Capacity
4
Kaohsiung, Taiwan 100
Nantong, China 180
Panipat, India (in 2013) +120
Kaohsiung, Taiwan 60
Rayong, Thailand 72
Nantong, China 72
Nantong, China 30 Kaohsiung, Taiwan 30
Kaohsiung, Taiwan 25
Plaquemine, USA 62
Nantong, China 20
Nantong, China (in 2013) +40
Kaohsiung, Taiwan (in
2014) +30
Gangshan, Taiwan 8
Shanghai, China 10.5
Jinan, China 5
280/400 204
30 30
107/177 16.3 Current /Total
Capacity
TSRC Corporation |
TSRC at a Glance
About Synthetic Rubbers
Synthetic Rubber Applications in Automotive Industry
Opportunities of Synthetic Rubber Industry in India
Conclusion
5 5
Contents
TSRC Corporation |
Natural Rubber and Synthetic Rubber
• Natural Rubber, which is cis-polyisoprene in structure, peaked in Brazil
in the 1870s. Since then, industry in Brazil withered and moved to Asia.
• In 1879, Bouchardat created one form of synthetic rubber, producing a
polymer of isoprene in a laboratory
• In 1909, Bayer succeeded in polymerizing methyl isoprene, the first
synthetic rubber. Methyl isoprene is 2,3-dimethylbuta-1,3-diene.
• In 1910, The Russian scientist created the first large-scale commercial
production of butadiene rubber.
• In 1911, the founding of Ford France and Ford Britain quickly spread
the development of synthetic rubber.
• During World War II, the production of synthetic rubber in the world
expanded greatly, because the world's limited supplies of natural
rubber.
• 2011 natural rubber supply/ demand= 10.7 / 10.5 million metric tons.
The largest demand increases are being seen in China and India.
• Natural rubber and synthetic rubber are both used in tire manufacturing
6 Source: CMAI (2012)
TSRC Corporation |
FA
CT
OR
Factors that Influence Synthetic Rubber
Development
7
• Living standard improvement
• Changes of transportation methods
• Design changes in automotive equipment
• Changes in tire designs and synthetic rubber in other automotive
applications
• Changes in non-automotive usages of synthetic rubber
• Raw material supply and alternative technologies for feedstock
• New regulations on environment, ecology and economy
• New technologies in synthetic rubber or its replacement
TSRC Corporation |
Petrochemical Value Chain
Naphtha
Olefins
Aromatics
Ethylene
Propylene
Butadiene
Isoprene
EDC
EO/ EG
Isopropyl Alcohol/
Acetone
Acrylonitrile
2 Ethyl Hexanol
ABS, BR, SBR,
NBR, SBS
IR, SIS, EPDM
Plasticizers, EPDM
Acrylic Fiber, NBR
PP, EPDM
Dye Stuff &
Intermediates
PVC
PE, EPDM
Glycol Ethers
Ethanolamine
Downstream
product Intermediate
Styrene
TSRC Corporation |
Olefins for Synthetic Rubbers
9
• C2 Ethylene CH2 = CH2
• C3 Propylene CH3 - CH = CH2
• C4s Butadiene CH2 = CH - CH = CH2
CH3
Isobutylene CH2 = C – CH3
• C5s Isoprene, cyclopentadiene, piperylene etc.
• Olefins Synthetic Rubber s &
Plastics
TSRC Corporation |
Major Families of Synthetic Rubber (1/2)
10
Material (Abbr.) Properties Applications
Styrene Butadiene
Rubber (SBR)
Moderate abrasion resistance; good
mechanical properties
Tread in car tires, technical rubber
products (conveyor belts, seals,
profiles); floorings; shoe soles and
heels
Polybutadiene Rubber
(BR)
Excellent strength; outstanding
abrasion resistance; crack resistance Car tires, conveyor belts, crash
protection pads
Nitrile Butadiene
Rubber, Acrylonitrile
Butadiene Rubber
(NBR)
Moderate ozone and weathering
resistance; high resistance to oils,
grease and hydrocarbons;
Seals, hoses for hydraulics and
pneumatics; rubber gloves, elastic
threads, blankets for print cylinders
and rolls
Styrenic Block
Copolymer (SBC)
Soft and flexible with excellent track
and adhesive properties, improved
weatherability and UV resistance
Automotive, personal hygiene, and
packaging, adhesives (especially SIS),
sealants and bitumen modification
application, footwear
Ethylene-
Propylenediene
Rubber (EPDM)
Very good aging resistance; resistant
to dilute acids and non-mineral-oil-
based brake fluids;
Body seals in automotive engineering,
roof and pond sheeting, membranes,
seals, construction profiles, hoses,
floor tiles, belts, conveyor belts, roll
covers
TSRC Corporation |
Major Families of Synthetic Rubber (2/2)
11
Material (Abbr.) Properties Applications
Chloroprene Rubber
(CR)
Good mechanical properties; good
ozone, weathering, chemical and
aging resistance; medium oil and fuel
resistance; high fire retardance
Cable sheathings, hoses, seals,
window and construction profiles, drive
belts, diving suits
Butyl Rubber (IIR) Good resistance to acids, hot water,
glycol, high gas impermeability; high
buffering capacity; ozone-resistant;
moderate mechanical properties
Inner plies for tubeless tires, bladders
for tire manufacture, roof sheeting,
tunnel insulation, hot water hoses,
bearing elements with excellent shock
absorption, inner tubes for tires
Polyisoprene (IR) Low water swell, light tensile strength,
Properties largely comparable with
natural rubber, more uniform, cleaner,
transparent.
Baby bottle nipples, tire, footwear,
motor mountings, gaskets, bushings,
extruded hoses
Polysiloxane, Silicone
Rubber (SI)
High temperature resistance; ozone,
chemical & UV resistant, high surface
tension, clear, non-toxic
Seals, wire& cable, medical,
automotive, adhesives
Polyacrylate Rubber
(ACM)
Heat and oil resistant, good weather-
ability, ozone resistant, poor abrasion
& electrical properties
Adhesives, seals, packaging, caulks
TSRC Corporation |
Tires Tread
Asphalt
Modifica-
tion
Footwear Adhesives
Technical
Goods
Plastics
Modifica-
tion
SBR - -
BR - -
NBR - - - -
SBC - - -
EPDM - -
CR - - -
IIR - - - -
IR - - - - -
SI - - - - -
ACM - - - -
Main Applications of Synthetic Rubbers
12 Source: IISRP & TSRC
TSRC Corporation |
World Synthetic Rubbers Supply by Types
13
Supply (2011) by types (15,965 kmta)
SBR, 5,874
BR, 3,578
EPDM, 1,192
NBR, 718
CR, 424
IR, 794
IIR, 1,262 SBC, 2,123
• India is a natural rubber producer, 4th in the world.
• India is deficient in synthetic rubber production (128 kmta)
• SBR, BR and IIR are 3 major basic polymers; BR 73 kmta and SBR 120
kmta (in 2013) and 100 kmta IIR (2014)
Source: IISRP (2011)
TSRC Corporation |
World Synthetic Rubbers Market by Region
14
Capacity (2011) by region (15,965 kmta) Consumption (2011) by region (14,540 kmta)
N. America, 3049
Latin America,
801
Europe/ ME/ Africa,
2893 Russia,
1621
China, 3539
Japan, 1618
India, 128 Other Asia,
2316
N. America, 1995
Latin America,
854
Europe/ ME/ Africa,
3087
Russia, 539
China, 4678
Japan, 951
India, 501
Other Asia, 1900
India 2005 2010 2015
Capacity 85 113 -
Consumption 233 406 613
Oversupply/ (Shortage) (148) (293) -
Source: IISRP (2011)
TSRC Corporation |
TSRC at a Glance
About Synthetic Rubbers
Synthetic Rubber Applications in Automotive Industry
Opportunities of Synthetic Rubber Industry in India
Conclusion
15 15
Contents
TSRC Corporation |
World Car Sales Outlook
16
1990-99 2000-08 2009 2010 2011 2012f
TOTAL SALES 39.20 49.55 50.42 56.82 58.89 61.39
N. America 16.36 19.01 12.61 13.96 15.22 16.10
Canada 1.27 1.60 1.46 1.56 1.59 1.61
United States 14.55 16.39 10.40 11.55 12.73 13.50
Mexico 0.54 1.02 0.75 0.85 0.90 0.99
Western Europe 13.11 14.48 13.62 12.98 12.80 12.16
Germany 3.57 3.28 3.81 2.92 3.17 3.24
E. Europe 1.18 2.73 2.58 3.14 3.90 4.25
Russia 0.78 1.54 1.47 1.91 2.65 2.95
Asia 6.91 10.97 17.68 22.47 22.50 24.23
China 0.43 3.14 7.32 9.41 10.04 10.94
India 0.31 0.83 1.43 1.87 1.95 2.09
S. America 1.64 2.36 3.93 4.27 4.47 4.65
Brazil 0.94 1.46 2.53 2.69 2.64 2.74
(Millions of units)
Source: Scotiabank, February 27, 2012
TSRC Corporation |
Synthetic Rubber Applications in Automotive
17
Grommet:
• SBR, NBR, IIR,
EPDM or TPV
Bumper:
• SBR, PU
Tire (Trend, Belt Plies,
Side Wall, Carcass,
Inner):
• ESBR, BR, SSBR,
NR, IIR
Bushing
• NR, SBR, BR
Fan Belt:
• ESBR, BR, EPDM,
NBR
Damper:
• SBR, SI, EPDM
Hose:
• NBR, EPDM
TSRC Corporation |
Requirements of Synthetic Rubber in Tires
18
Legislation and Regulation - tire labeling & CO2 emission
targets for cars and trucks
Fuel Economy –Tires play important role; reduced tire rolling
resistance
Safety and Performance- higher temperature resistance and
improved dampening and noise, wet grip, cornering
performance, longevity
Cost
1
2
3
4
TSRC Corporation |
Green Tire Labeling Regulation
Country EU US Japan Korea
Starting
time 2012 November 2010 March 2010 January 2013
Target tires All tires for PV or
CV
Replacement tires
for PV
Summer replacement
tires for PV All tires for PV or CV
Standard
NHTSA
(National Highway
Traffic Safety
Administration)
JIS
(Japanese Industrial
Standard)
Labeling
information
Fuel efficient
class: A~G Fuel efficient
RRC: A~AAA
(9.0 or less) Rolling resistance
Wet grip class:
A~G
Safety
(Wet traction)
G: d, c, b, a
(110% or more) Wet grip
External rolling
noise measured
value (decibel)
Durability
(Tread wear) Noise & tread wear
19 PS:RRC=Rolling Resistance Coefficient; G=Wet Grip; RP=Replacement;
TSRC Corporation |
Tire Drives Automotive Market
20
Safety
Fuel Saving
Longevity
Less Rolling Resistance,
Reduced weight
Better wet grip on
the road, Less
noise
More mileage,
higher abrasion
resistance
More and more regulations demanded enhanced and balanced
performance for Tire
TSRC Corporation |
Green Tire Performance
Low-Rolling-Resistance Tire
Features of
Solution-SBR
(New
Generation)
Key properties
• Different styrene and vinyl levels
• Controlled molecular weight, molecular weight distribution
and branching
• Used in blends for car tire treads to improve grip and rolling
resistance
• Functional groups in polymers allow chemical bonding with
silica filler for winter tires and low rolling resistance tires
• Improved properties and easier processing
• Good resistance to reversion
• Good low temperature flexibility
• Low hysteresis
• Good resilience
• Good abrasion resistance
TSRC Corporation |
TSRC at a Glance
About Synthetic Rubbers
Synthetic Rubber Applications in Automotive Industry
Opportunities of Synthetic Rubber Industry in India
Conclusion
22 22
Contents
TSRC Corporation | 23
Global Population Growth
Million Population GDP
(2011-2015)
2012 2015 2025 AAGR
India 1,205 1,251 1,396 7.8%
China 1,343 1,361 1,394 9.3%
Unit States 313 322 351 2.4%
Indonesia 248 255 278 6.6%
Brazil 205 212 231 3.97%
World 3,314 3,401 3,650 3.3%
Source: US Census Bureau ; GDP from IMF avg 2011 to 2015 (published in Sep, 2011), AAGR= Average Annual Growth Rate
India's current population is 1.2 billion. In the next decade, India will
become the world's most populous country.
TSRC Corporation |
• 5 times- the number by which GDP will have multiplied by 2030
• 2.5 billion square meters of roads will have to be paved, 20 times
the capacity added in the past decade
• In absolute terms, India is 9th in the world in terms of nominal
factory output (its $1.22 trillion)
• The per capita income is near Rs 38,000 reflecting improvement in
the living stands of an average Indian.
Indian Opportunity
24 Source: McKinsey & Company (2010); Auto industry India 2011
TSRC Corporation |
Indian Consumption SR & NR Forecast
25
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NR, Tyre Sector 661 680 722 783 850 897 950 1010 1046 1093 1152 6%
NR, Non-Tire
Sector 283 284 295 308 329 342 358 383 397 414 447 5%
Sub-total 944 964 1,017 1,091 1,179 1,239 1,308 1,393 1,443 1,507 1,599 5%
SR, Tyre Sector 145 143 156 164 166 178 189 210 214 221 248 6%
SR, Non-Tire
Sector 261 285 342 414 452 513 570 625 636 661 687 10%
Sub-total 406 428 498 578 618 691 759 835 850 882 935 9%
Total of Rubber
Consumption 1,350 1,392 1,515 1,669 1,797 1,930 2,067 2,228 2,293 2,389 2,534 6%
Unit: 000’ metric ton
Source: IRSG (December)
TSRC Corporation |
• Today, automobile sector in India is one of the key sectors of the
economy in terms of the employment. Mega trends shaping the
Indian passenger vehicle industry'.
• The market value of automobile industry is more than US $ 8b, 5%
contribution of Indian GDP and will be double by 2016
• 7th position automotive producer in the world with being #1 in two
wheelers and #4 in commercial vehicles
• Withstanding a growth rate of 13% per annum and an annual
production of more than 2 million units
• The country's passenger vehicle sales and production is expected
to grow by 14 to 16% over 2011 to 2021, reaching over 9 to 10
million units annually.
• India becomes not only a regional base for small car production,
but also an exports hub to other emerging markets. The automotive
sector has been contributing its share.
Indian Automotive Industry Overview
26 Source: McKinsey & Company (2010); Auto industry India 2011
TSRC Corporation |
Snapshot of Indian Tire Industry
• Strong domestic manufacturing capabilities (39 tire companies and 60 tire
plants; tire turnover (est.) US $ 6b in 2010)
• Self sufficiency in all categories of tires
• 62% of total Natural Rubber (NR) produced in India is consumed by the tire
sector.
• Vibrant sales and service network across the country
• Strong attractions for foreign investment
27
Category 2004-2010
CAGR (%)
2010-2014
CAGR (%)
Truck & Bus Tyres 9.1 10.0
Passenger Car Tyres (Radial) 18.2 16.0
Light Truck Tyres 8.9 11.0
Total 4 Wheelers 11.6 12.0
Source: Automotive Tyre Manufacturers’ Association (ATMA) (2010)
TSRC Corporation |
Synthetic Rubber Shortage in India
28
No Production Gap in Tire Industry
▪ SBC
▪ BR (Green Tire)
▪ SBR (Green Tire)
▪ EPDM
▪ IR
▪ SBR (Tire Grade)
▪ IIR
▪ Rubber Chemicals
▪ Steel Tire Cord
▪ Nylon Tire Cord
▪ Polyester Tire Cord
TSRC Corporation |
Conclusion
29
Economics • Fast economy and population growth will accelerate
automotive industry
• Rapid development in Infrastructure and pavement
• Local auto and tire manufactures are ready for the synthetic
rubber to boost
• Tire production in tandem with auto growth
• Value chain already established
Automotive
Synthetic
Rubber • Currently India relies heavily on import of synthetic rubber
• Consumption of synthetic rubber will go up remarkably
• Commodity rubbers, such as SBR, BR and SBC first, followed by
specialty types
• GDP Auto Industry Tire Industry Rubber Industry
• Population Market Size Total Economy
WORKING DRAFT
Last Modified 08/08/2011 1:46:57 PM Taipei Standard Time
Printed
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