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Zhengli Polymer Technology Co., Ltd.
Enhanced oil recovery and wastewater treatment in China
April 2011
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Disclaimer
This sample presentation includes forward-looking that are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate and may differ materially from actual future events or results. Likewise, certain confidential information has been removed from this sample presentation, resulting in this sample presentation not being a complete representation of the subject company and its future plans. All statements other than statements of historical fact contained in this presentation that address activities, events or developments that may occur in the future constitute forward-looking statements. Forward-looking statements may include projections, as well as statements regarding future plans or economic performance, or the assumptions underlying any of the foregoing.
The poster of this sample presentation does not assume responsibility for the accuracy or completeness of such forward-looking statements. As such, readers are cautioned not to place undue reliance on such forward-looking statements.
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A polymer with applications in oil extraction
and wastewater treatment industries
Zhengli Polymer is a Leading Chinese Producer
of High-Quality Polyacrylamide (PAM)
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4
Zhengli Polymer at a Glance
Revenue: $XX.X million;
net profit: $X.X million
(2010)
Production capacity of
11 kilotonnes (“kt”)
30+ variances of PAM
~200 employees
Established in 1995 in
Zhengzhou, Henan Province
#1 PAM producer in
Central Western China
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PAM is in High Demand
417,000
Consumption
CAGR of 17% (2006 to 2009)
tonnes of PAM is consumed in China annually1 >
PAM is more than a
$1.2Billion industry in China
1 Source: China National Functional Polymer Industry Committee,
China National Chemical Information Network (2009)
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PAM Application #1: China’s Oil Problem
Rapidly rising
demand for oil (10-year CAGR of 6.5%*)
Declining oil output
from ageing wells
Increasingly reliant upon imported oil
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* 1999 to 2009
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PAM and Enhanced Oil Recovery
can be recovered using
PAM flooding compared
to conventional
techniques
50% more oil
>$30-$40
economical to use PAM
for tertiary oil extraction
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PAM and Enhanced Oil Recovery
of oil produced
globally is through
tertiary extraction
Only 3%
China is the technological leader
for EOR using PAM 8
Source: International Energy Agency
Only 15% of oil produced in
China is currently
extracted using PAM
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PAM Application #2: Wastewater Treatment
In China,
pollution
affects
75% of
rivers &
lakes
90% of
ground-
water
Chinese government is responding
with increased spending and
stricter regulations
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Wastewater Treatment
PAM
is the
solution!
60% of global PAM consumption
outside of China is used for
water treatment
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Wastewater Treatment
PAM WT Consumption in China
(000’s tonnes)
2006
A new
market for
Zhengli
Polymer
140
0 2007 2008 2009 2010E
120
100
80
60
40
20
CAGR
= 36%
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Zhengli Polymer: A Proven Business Model
Strong brand equity
Strong R&D and product
development capabilities
Long-term industry
relationships
Low-cost producer of high-
quality PAM for multiple
applications
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Financial Highlights
Revenue
(CAD millions)
2006 2009 2010 2006 2009 2010
Net Income
(CAD millions)
2007 2008 2007 2008
CAGR
XXX%
CAGR
XX%
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Growth Strategy
Develop new oilfield
customers
Develop new products
Continue to grow oil
extraction business
Expand wastewater
treatment business
Build strategic alliances
Leverage brand equity in
oil business
Direct sales to end users
M&A?
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Growth Strategy
Continue to expand production capacity
1 Annualized production capacity commencing Q3 of 2011.
2 Annualized production capacity by the end of 2012.
2012E1 2011E1 2010 2006
6 kt
11 kt
18 kt1
28 kt2
Medium-
term plan
to expand
capacity to
68 kt in <5
years
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• Track record of profitable growth
• Well entrenched in enhanced oil recovery market
• Established foothold in fast-growing wastewater treatment industry