1 TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO RECESSION AND GLOBALIZATION PRESENTED BY: Bob Eller Robert Eller Associates LLC Phone: 330-670-9566 E-mail: [email protected]www.robertellerassoc.com PREPARED FOR: TPE 2009 Frankfurt, Germany November 11, 2009 mydox/papers/TPE 2009 ppt 110509.ppt Management DECISIONS ANALYSIS MARKET ECONOMIC TECHNICAL Robert Eller Associates LLC CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES
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TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO RECESSION AND GLOBALIZATION
PRESENTED BY:Bob EllerRobert Eller Associates LLCPhone: 330-670-9566E-mail: [email protected]
PREPARED FOR:
TPE 2009Frankfurt, Germany
November 11, 2009mydox/papers/TPE 2009 ppt 110509.ppt
ManagementDECISIONS
ANALYSIS
MA
RKET
ECON
OM
IC
TECHN
ICA
L
Robert Eller Associates LLCCONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES
2
• Macroeconomics/Globalization: Effects on TPE Markets and Technologies
SOURCES: FINANCIAL TIMES; ROBERT ELLER ASSOCIATES LLC, 2009b/mydox/papers/TPE sectors 09.xls
GR
OW
TH IN
DE
X
(<50
= C
ON
TRA
CTI
ON
)
US INDIAEUROZONE 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, 2009b/mydox/TPE Frankfurt 2009/TPE sectors.xls
MA
NU
FA
CT
UR
ING
, % O
F G
DP
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.
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EXHIBIT 2 DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
AUTOBLD
G/CONSTR
MEDICAL
APPL/TOOLS
PERS CARE/C
OSMETIC
SFLU
ID H
ANDL'G/IN
DW
IRE/C
ABLECONSUMER/H
SWR
SPORTS/ LEIS
URE
FOOTWEAR
E/E &
COMM
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009 b/mydox/TPE Frankfurt 2009/TPE sectors/xls
DE
MA
ND
, %
NA
EUR
DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs
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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, 2009r/mydox/Auto Industry/Global Ind Volume TW 081209.xls
(competes with EPDM and o-TPV) - HFFR/PVC replacement
(mobile electronic wire and cable growth)
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AUTO TPO LIFE CYCLE POSITIONS
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
HIGH
MEDIUM
LOW
RE
LAT
IVE
VA
LUE
ADV. R/D; INTRODUCTION GROWTH MATURE
LIFE CYCLE POSITION
r/mydox/papers/Auto TPO Life Cycle 09.vsd // lg/myfiles/visio/Auto TPO Life Cycle 09.vsd
NOTES:
FIBER REINFORCED SOFT TOUCH
BODY STRUCTURES(a)
AIRBAG DOORS
IP SUBSTRATE
THERMOFORMED DOORTRIM SKINS(B)
BUMPERFASCIA
CLADDING
EXTERIOR BODY PANELS
2-SHOT SKIN/FOAM/SUBSTRATE
= ESTIMATED FUTURE DIRECTION
THERMOFORMEDIP SKINS(b)
(a) LGF-PP = LONG GLASS FIBER PP; E-LF-PP = ENDLESS (E.G., TAPE REINFORCED) LONG FIBER PP
(b) INCLUDES THIN PP (TPO) FILM TECHNOLOGY INTRODUCED IN EUROPE (BY JCI, OTHERS)
41SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
TE
CH
RE
QU
IRE
ME
NT
S
DEVELOPMENT INTRODUCTION EARLY GROWTH
r/mydox/TPE/SBC TPE Life Cycle 09.vsd // lg/myfiles/visio/SBC TPE Life Cycle 09.vsd
NOTE: (a) SOFT TOUCH GROWING IN AUTOMOTIVE
MATURE
BODY/GLAZING
SEALS(AUTO, B/C)
BIODEGRAD-ABLE
GRADES
HFFR
HIGH
MED
LOW
SBC TPE LIFE CYCLE EXAMPLES
PVCREPLACE-
MENT
FOOTWEAR
SOFT TOUCHNON-AUTO(a)
SOFTTOUCHAUTO
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SUMMARY
• Global TPE Demand: affected by end use market shift to Asia
• Auto: - High share of demand and growth - Severe recession demand effects - China auto growth will stimulate demand - New auto paradigm- New applications will stimulate TPO, o-TPV,
SBC
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SUMMARY (Cont’d.)
• China TPE Market: - Export/slowdown impacts- High growth domestic (glocal/local markets) - Western vs. domestic compounder competition
• High Heat/Oil Resistance: stimulated by new entrant?
• HFFR/Low Smoke: wire and cable stimulates several TPEs
• TPE Profitability in the New Paradigm – REA’s client focus
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ABBREVIATIONS
c-TPO – compounded TPOCAFE – Corporate Average Fuel Economy (U.S.)COPE – copolyester-type TPEGDP – gross domestic product HFFR – halogen-free, flame retardantLGF-PP – long-glass fiber reinforced polypropyleneLGF-TP – long-glass fiber reinforced thermoplastic MNC – multinational company or compoundero-TPV – olefinic TPVPP – polypropylener-TPO – reactor TPOSBC – styrene block copolymer type TPE (may be SEBS or SBS) TPE – thermoplastic elastomer (all classes of thermoplastic
elastomer; SBC, TPO, o-TPV, TPU, etc.); note in some regions (e.g., Asia), “TPE” is used to refer to SBC-type TPEs
• Global Power Position: Emerging power, comparable to U.S. at start of 20th century
• Economic Expansion: Outpaces West - 8.9% in 3Q/09 vs. 3.5% in U.S. - Provides economic leverage - Will soon overtake Japan as global #2 economy - Larger than U.S. economy by 2040-2050
• Largest Global Exporter - 1 year trade surplus = US$250BN - U.S. largest export target