TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO 2009/TPE...آ  TPE APPLICATIONS AND TECHNOLOGIES RESPOND

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  • 1

    TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO RECESSION AND GLOBALIZATION

    PRESENTED BY: Bob Eller Robert Eller Associates LLC Phone: 330-670-9566 E-mail: bobeller@robertellerassoc.com www.robertellerassoc.com

    PREPARED FOR:

    TPE 2009 Frankfurt, Germany

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

    Management DECISIONS

    ANALYSIS

    M A

    RK ET

    ECO N

    O M

    IC

    TECH N

    IC A

    L

    Robert Eller Associates LLC CONSULTANTS 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 PVC TPEs

    OTHER E-TPEs

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

    ISOPRENE- BASED MID-

    BLOCKS

    SILICONE

    ACRYLATES

    OTHER COPE

    COPA

    TPU

    p-TPV(d) (PARTIAL CROSS- LINKED)

    f-TPV(d) (FULLY CROSS- LINKED)

    SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

    COMMODITY TPO

    OBC(c) AND NANO CRYSTALLINE OLEFIN ELASTOMER(b)

    SBS

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

    OTHERS r-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

    NEW ENTRANT

    (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: IMF b/mydox/rapra 2008/rapra 2008.xls

    A N

    N . %

    C H

    A N

    G E

    ( A

    T P

    P P

    )

    ADV. ECON.

    EMERG. ECON.

    WORLD

  • 6

    MFG. PURCHASING MANAGERS' INDICES (PMIs)

    0

    10

    20

    30

    40

    50

    60

    70

    Ju l-0

    8 Au

    g- 08

    Se p-

    08

    Oc t- 0

    8

    No v-0

    8

    De c-0

    8

    Ja n-

    09

    Fe b-

    09

    Ma r-0

    9

    Ap r-0

    9

    Ma y-0

    9

    Ju n-0

    9

    Ju l-0

    9

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

    G R

    O W

    TH IN

    D E

    X

    (< 50

    = C

    O N

    TR A

    C TI

    O N

    )

    US INDIA EUROZONE 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, 2009 b/mydox/TPE Frankfurt 2009/TPE sectors.xls

    M A

    N U

    F A

    C T

    U R

    IN G

    , % O

    F G

    D P

    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%

    AU TO

    BL DG

    /C ON

    ST R

    ME DI

    CA L

    AP PL

    /TO OL

    S

    PE RS

    C AR

    E/ CO

    SM ET

    IC S

    FL UI

    D HA

    ND L'G

    /IN D

    W IR

    E/ CA

    BL E

    CO NS

    UM ER

    /H SW

    R SP

    OR TS

    / L EI

    SU RE

    FO OT

    W EA

    R E/

    E &

    CO MM

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

    D E

    M A

    N D

    , %

    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, 2009 r/mydox/Auto Industry/Global Ind Volume TW 081209.xls

    V E

    H IC

    LE S

    A LE

    S , M

    M U

    N IT

    S

    Annual Growth 1990-2000 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

    19 70

    19 72

    19 74

    19 76

    19 78

    19 80

    19 82

    19 84

    19 86

    19 88

    19 90

    19 92

    19 94

    19 96

    19 98

    20 00

    20 02

    20 04

    20 06

    20 08

    20 10

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

    S A

    LE S

    , M M

    U N

    IT S

    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 NT b / myd o x / jec 0 9 / eur o m ix s hi f t .x ls

    S A

    LE S

    S H

    A R

    E ,

    %

    2 0 0 5 2 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

    • Favor