amsterdam, december 8, 2009 akzonobel specialty chemicals …… · 2016-07-22 · spotlight on...

Welcome

Amsterdam, December 8, 2009 AkzoNobel Specialty Chemicals Teach In

A Spotlight on AkzoNobel Specialty Chemicals 2

Today’s Program

1. Brief introduction to AkzoNobel – Keith Nichols

2. Spotlight on Specialty Chemicals – Rob Frohn

3. Surface Chemistry – Frank Sherman

4. Functional Chemicals – Bob MargevichQ&A session

Coffee break

5. Industrial Chemicals – Werner Fuhrmann

6. Pulp and Paper Chemicals – Jan SvärdQ&A session

7. Wrap-up and closing – Rob Frohn

3Brief introduction to AkzoNobel | Specialty Chemicals Teach In

AkzoNobel key facts

2008• Revenue €15.4 billion• 61,300 employees• EBITDA: €1.9 billion1

• EBIT: €1.4 billion1

• Credit ratings: BBB+ (S&P) and Baa1 (Moody’s)

1Before incidentals

Revenue by business area EBITDA1 by business area

Performance Coatings

Decorative Paints

Specialty Chemicals

29%

34%

37%27%

29%

44%


AkzoNobel strategic ambitions

Tied to incentives, both for value creation and sustainability

Leading in value creation• Outgrow our markets• EBITDA margin > 14 percent by end 2011• 0.5 percent improvement in operating

working capital (OWC) level, p.a.

Leading in sustainability• Top 3 Dow Jones Sustainability index• Reduction in total recordable injury rate• Step change in people development


Delivering the EBITDA margin ambition

0

6

12

18EBITDA margin, indicative

Organicgrowth

Operationaleffectiveness

Marginmanagement

End2011

ICIsynergies

2008performance


Key components of the strategicaction planICI synergies• €340 million structural cost savings

• Delivered more rapidly than originally planned

Organic growth• Leveraging our strong emerging markets positions for growth

• Emphasis on focused, bigger, bolder innovation

Margin management• Centralized procurement

• Systematic approach to managing the value chain

Operational effectiveness• Additional restructuring beyond the ICI synergies

• Leaner, more efficient organisation at all levels

7Spotlight on Specialty Chemicals | Specialty Chemicals Teach InA Spotlight on AkzoNobel Specialty Chemicals 7

Spotlight on Specialty Chemicals

Rob Frohn Board member responsible for Specialty Chemicals


Agenda

• Introducing Specialty Chemicals

• Introducing the Business Units

9Spotlight on Specialty Chemicals | Specialty Chemicals Teach In 9

Our Specialty Chemicals portfolio

National StarchIndustrial Chemicals

Surface ChemistryFunctional Chemicals Pulp and Paper Chemicals

Chemicals Pakistan


Specialty Chemicals key facts

2008• Revenue €5.7 billion• 13,300 employees• EBITDA: €891 million1

• 35% of revenue from emerging markets• Major producer of specialty chemicals• Leadership positions in many markets

1Before incidentals

Revenue by business unit Revenue by geography

Europe

Asia Pacific

North America

Latin America

Other regions

Functional ChemicalsPulp and Paper ChemicalsIndustrial Chemicals

National Starch

Surface Chemistry

Chemicals Pakistan

29%

17%15%

14%

8%

17%

44%23%

9%2%

22%


A clear focus

2004 review established the way forward:

• focus on market and technology leadership positions

Resulted in:

• growth platforms

• trimmed portfolio

• reduced cyclicality

Recent acquisitions have further strengthened the portfolio:

• LII Europe (Industrial Chemicals), Levasil (Pulp and Paper), ICI (Surface Chemistry, Functional Chemicals)


The markets we serve

Revenue by market€ billion, 2008

0

1 000

Rubbe

r & pl

astic

s

Paper,

print

ing, p

ublis

hing

Food &

beve

rage

Manufa

cturin

g

Soaps

, dete

rgents

, etc.

Chemica

ls an

d m/m

fibers

Textile

s

Agro-ch

emica

lsPetr

oleum

Extrac

tion

Paints

Pharm

aceu

ticals

Electric

ity, g

as, w

ater

Agricu

lture,

fores

try, fi

sheri

esAero

spac

e

13Spotlight on Specialty Chemicals | Specialty Chemicals Teach In

Excellent geographic spread

Emerging markets are important (35% of revenue)% of revenue, 2008

‘Mature’ Europe

40%

Asia Pacific

22%

Rest-of-world

2%Latin America

9%

North America

23%

‘Emerging’ Europe

4%


Attractive operating margins over the cycle€ billion

0

1

2

3

4

5

6

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009ytd Q3

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

revenue EBITDA margin


Specialty Chemicals – a SWOT analysis

Opportunities

• geo expansion• market consolidation• innovation• sustainability

Opportunities

• geo expansion• market consolidation• innovation• sustainability

Strengths

• market positions• technology• global strength• performance • people

Strengths

• market positions• technology• global strength• performance • people

Threats

• market recession• regulations • raw material & energy volatility

Threats

• market recession• regulations • raw material & energy volatility

Weaknesses

• euro-zone production base• fragmentation

Weaknesses

• euro-zone production base• fragmentation


Key components of the strategicaction planICI synergies• €340 million structural cost savings

• Delivered more rapidly than originally planned

Organic growth• Leveraging our strong emerging markets positions for growth

• Emphasis on focused, bigger, bolder innovation

Margin management• Centralized procurement


Operational effectiveness• Additional restructuring beyond the ICI synergies

• Leaner, more efficient organisation at all levels

In other words, focusing on customers, cost and cash


• Adding value to customers in attractive market segments

• Growing with customers in emerging markets

• Customer focused innovation delivers sustainable growth

• Increasing eco-premium product offerings to meet customer needs

17

Customer focus drives growth


Remote controlled salt conversion units• Cutting-edge remotely-controlled chlorine production units. Gives environmental benefits (no dependence on chlorine transport) with a production capacity of 15,000 tons per year

Customer focused innovation

Continuous Initiator Dosing technology (CID)• Improves reactor output and product quality during the manufacture of PVC

RedisetTM WMX• Allows for lower paving temperatures saving energy and reducing emissions during asphalt paving as well as improving road durability and lifetime

Compozil Fx• System for the largest and fastest paper machines, reduces bothraw material costs and energy usage because of faster drying

Dissolvine® GL• A biodegradable, low-tox, phosphate free chelating agent for a wide range of applications including domestic and industrial dishwashing


Reducing costs and increasing cash flow by margin managementFocus on

• Centralized purchasing


• Sales force training

and

• Value pricing

• Energy efficiency

• Sustainable sourcing


Reducing costs and increasing cash flow by improved operational effectivenessDisciplined approach:

• Improving Operating Working Capital

• Capacity optimization and restructuring

• Productivity gains in mature markets

• Sustainability – leading in safety and people development


Agenda

• Introducing Specialty Chemicals

• Introducing the Business Units


Our Specialty Chemicals portfolio

National StarchIndustrial Chemicals

Surface ChemistryFunctional Chemicals Pulp and Paper Chemicals

Chemicals Pakistan


The chemical industry value chain

‘End’products

Mining, oil, biomaterials

Basechemicals

Chemicalintermediates

Performance/functionalchemicals

Industrial Chemicals

Surface Chemistry

Pulp and Paper Chemicals

Functional Chemicals

Chemicals Pakistan

National Starch


Different business approaches

Different models given the very different product portfolios

• Industrial Chemicals – geographically focused on Western Europe, emphasis on operational effectiveness

• Pulp and Paper Chemicals – global business with a specific emphasis on serving an industry

• Surface Chemistry and Functional Chemicals – global businesses, mostly based on customer intimacy model for each specific product group

• Chemicals Pakistan – national business with a broad offering: chemicals, coatings, fibers, pharma

• National Starch – global business with a specific emphasis on serving an industry


• National Starch – a global, product-focused business with a strong market position.

• Revenue €890 million (2008), 2250 employees, active in more than 30 countries

• Leading supplier globally of specialty starches with focus on the food industry. Also serve niche papermaking markets

• Recently acquired Penford’s Australian Specialty Starches business

25

National Starch


Chemicals Pakistan

• Chemicals Pakistan – a country-based, broad product line business. This business is continuing to grow and generate cash.

• Revenue €470 million (2008) with 1,350 employees

• Chemicals Pakistan comprises of a 75.8 percent share in ICI Pakistan Limited

• Earlier this year we divested the Pakistan PTA business


Scope for this session

Pulp and Paper ChemicalsIndustrial Chemicals


Surface Chemistry


The right management team in place

Committed to deliver, each 25+ years of business experience

BobMargevich

FunctionalChemicals

JanSvärd

Pulp andPaperChemicals

WernerFuhrmann

IndustrialChemicals

WaqarMalik

ChemicalsPakistan

FrankSherman

SurfaceChemistry

James P. Zallie

National Starch

29Surface Chemistry | Specialty Chemicals Teach InA Spotlight on AkzoNobel Specialty Chemicals 29

Surface Chemistry

Frank ShermanManaging Director Surface Chemistry

30Surface Chemistry | Specialty Chemicals Teach In

Agenda

1. Business unit overview• Business summary• Key markets and customers• Cost Initiatives• Sustainability

2. Business unit strategy• Growth• Innovation• High Performance


Surface Chemistry key facts (2008)

• Revenue €820 million• 1,500 employees• Global reach with manufacturing and R&D in

every major region• Integrated National Starch specialty polymers

businesses• Unique combination of surfactants, synthetic polymers

and biopolymers• Over 40% of sales from eco-premium products• Leadership positions in attractive market segments

Revenue by market segment Revenue by geography

Asia Pacific

Europe

Americas

Home &Personal Care

Agro &Mineral

Manufacturing

Petroleum & Asphalt

31%

26%

25%

18% 11%

38%51%


Broad palette of product functionalities

Adhesion

Adjuvancy

Anti-agglomeration

Anti-microbial

Cleaning &conditioning

Dispersing

Emulsification/demulsification

Foaming/defoaming

Wetting

Scaleinhibition

Rheologymodification

Filmformation


Liquid droplets not able to penetrate waxy leaf surface

Surfactant formulation –able to penetrate waxy leaf surface

WettingAgro herbicide formulation


Demulsification of North Sea Crude

Oil micelle emulsified in water

Water micelle emulsified in oil

Emulsification and DemulsificationPetroleum production chemicals


Pigment Dispersed in water

DispersingCoatings formulation


Regional AssetsBackward IntegrationOperational Excellence

SurfactantsSynthetic Polymers

Biopolymers

Agrochemicals

Customer Intimacy

Solutions Superior Performance Sustainable Solutions

Hydrocarbon Efficiency

NeedsDemand Forecast

Voice of the CustomerMarket Research

Global SupplyChain

Application Knowhow

TechnologyPlatforms

ValueProposition

ValueCapture

ValueCreation

EnablerHigh Performance Matrix Organization

Personal Care

Oilfield

Asphalt Road PavingMining

Customers

Business modelUnique capabilities = Strong value proposition


*AkzoNobel estimate of target market

• Target Market size* ∼ €1 bln specialty ingredients

• Key Applications: hair and skin care

• Growth Drivers: natural ingredients, environmental regulations, anti-aging benefits, emerging countries

• Market Characteristics: large global formulators, high value-added ingredients and high entry barriers

• Major Customers: Procter & Gamble, Beiersdorf, Schering Plough, L’Oreal, Johnson & Johnson, Unilever, Henkel

Market CharacteristicsPersonal Care



• Target Market size* ∼ €1.5 bln specialty ingredients

• Key Applications: fabric softeners and hard surface cleaners

• Growth Drivers: sustainability, environmental regulations, cost effective formulations, concentrates, and emerging countries

• Market Characteristics: global consumer and institutional cleaning companies, mega retailers

• Major Customers: Unilever, Procter & Gamble, Ecolab, JohnsonDiversey, Reckitt Benckiser

Market CharacteristicsFabric Care & Cleaning



• Target market size* ∼ €1 bln inert ingredients

• Key Applications: herbicides, fungicides and insecticides

• Growth Drivers: biotechnology, biofuels, environmental regulations, farm policy, farming efficiency and population growth

• Market Characteristics: highly concentrated global agricultural chemical formulators, seasonality, competition from generics

• Major Customers: Monsanto, Bayer, Syngenta, BASF, Dupont

Market CharacteristicsAgricultural Chemicals



Market CharacteristicsPetroleum

• Target Market size* ∼ €1.5 bln specialty ingredients

• Key Applications: oil and gas drilling, stimulation & productionand fuel & lubricant additives

• Growth Drivers: crude oil & natural gas prices, green chemistry, offshore deep-well drilling, secondary oil recovery, lower auto emissions and fuel efficiency

• Market Characteristics: cyclical, complex value chain, high entry barriers and growth of regional customers

• Major Customers: Baker Hughes, MI Drilling, Schlumberger, Halliburton, Lubrizol, Afton, Infineum



Market CharacteristicsIndustrial Markets

• Target Market size* ∼ €1 bln processing aids

• Key Applications: mining, asphalt, textiles, coatings, etc.

• Growth Drivers: infrastructure investment (roads, construction), reduced energy and water use, population growth, ore quality and emerging technologies

• Market Characteristics: customers depend on suppliers for process solutions

• Major Customers: PCS, Omya, GE, Perstorp, Kemphos, Oxiteno


Customers, Cost and Cash•Focusing on specialty markets and products

•Participating in industryrestructuring

•Consolidating operations

•Reducing cost and capital structure

•Margin management20%

25%

30%

35%

40%

45%

50%

2003 2004 2005 2006 2007 2008

Operating Cost as % of Sales

Operating Cost EfficiencyImproving Competitive Position


0

2

4

6

8

10

12

2005 2006 2007 2008 2009 YTD

Total Recordable Injury Rate

0

2

4

6

8

10

12

2005 2006 2007 2008 2009 YTD

Total Recordable Injury Rate

0

200

400

600

800

1 000

2006 2007 2008 2009 2010 Goal

VOC

s, M

etric

Ton

s

Volatile Organic Compound Emissions to Air

0

20

40

60

80

2009 2014

Eco Premium Products,% of Sales

0

20

40

60

80

2009 20140

20

40

60

80

2009 2014

Eco Premium Products,% of Sales

Sustainability in operations and products


Agenda

1. Business unit overview• Business summary• Key markets and customers• Cost Initiatives• Sustainability

2. Business unit strategy• Growth• Innovation• High Performance


StrategyGrowth, Innovation, High Performance

Drive growth by …• Targeting attractive market niche applications

• Promoting sustainable solutions• Investing in developing regions • Pursuing external business development

Drive innovation by…• Leveraging technology across market segments

• Exploiting unique surfactant-polymer technologysynergies

Drive high performance by …• Leveraging AkzoNobel scale & market synergies• Optimizing matrix organization to deliver customer value• Increasing diversity and investing in our people


Personal CareBiopolymer based hair gels

Proprietary Glyphosate AdjuvantsIncreased efficacy and concentration ofglyphosate herbicide

Fabric CareBiodegradable polymer improving the efficiency of fabric softeners

Household CleaningBiodegradable, aqueous cleaning formulationsreducing use of organic solvents

Drive Growth By…Promoting sustainable solutions


Significantly reduces paving temperatures resulting in lower VOCfumes, fuel savings and reduced operating cost

Rediset™ WMX Promoting sustainable solutions


% of revenue, 2008

‘Mature’ Europe

Asia Pacific

Rest-of-world

Latin America

North America ‘Emerging’ Europe

40%30%

11%11%

6%

2%

Plan to Increase our asset base

Drive Growth By…Investing where our customers are growing


A novel ingredient, developed for laundry… adapted to provide solutions in many other applications

Drive Innovation by…Leveraging technology across market segments


With Polymer

Without Polymer

Drive Innovation by...Exploiting surfactant-polymer technology synergies

Oilfield Stimulation Surfactant - Polymer Synergy

0% 1% 2% 3% 4%Surfactant Stimulant Concentration

Visc

osity


Drive High Performance by…

Optimizing matrix organization to deliver customer value

• Global market teams• Regional operating units• BU level functional platforms and

corporate infrastructure

Increasing diversity and investing in our people• Foster cross-regional, -business and –functional

transfers• Develop and promote women and non-Western

leaders • Invest in sales excellence and leadership

development

Leveraging AkzoNobel scale & market synergies• Technology transfer across BUs to provide unique

solutions to customers• Key account management across BUs• Consolidate back-office shared services


Tomorrow’s Answers Today!

53Safe Harbor Statement | Specialty Chemicals Teach InA Spotlight on AkzoNobel Specialty Chemicals 53


Bob MargevichManaging Director Functional Chemicals

54Safe Harbor Statement | Specialty Chemicals Teach In

Agenda

1. Business unit overview• Business unit description• Key growth activities• Sustainability

2. Business unit strategy• Customers• Cost• Cash

55Functional Chemicals | Specialty Chemicals Teach In

Meet the new Functional Chemicals

• Effective January 1, 2010 Polymer Chemicals will be merged into Functional Chemicals

• Very diverse product offering, used in many end-use applications

• Our Functional Chemicals business makes chemical intermediates, performance chemicals and end-products

• Our portfolio will include cellulosic specialties, chelates, ethylene amines, metal alkyls, micronutrients, organic peroxides, polysulfides, redispersable powder polymers, salt specialties and sulfur products

• These chemicals are used in everyday items such as detergents, vinyl, automotive parts, agricultural products, pharmaceutical products, food products, wallpaper adhesives, plastic bags and cosmetics


Functional Chemicals key facts

2008• € 1.7 billion sales1

• Approximately 4,100 employees• 38 manufacturing locations• 6 R&D locations• 5 JV’s (Chelates, Sulfur Derivatives and Organic

Peroxides)• Worldwide presence in all businesses (except Salt

Spec.)

Revenue by segment/market Revenue by destination1

Asia Pacific

Europe

Americas

Food

Building

Agro

Cleaning

Other

35%

6%5%

48%

7%

18%

51%

31%

1Combined sales Functional Chemicals and Polymer Chemicals


Strong global positions

Salt Specialties

N. Europe

Elotex OrganicPeroxides

Sulfur Products

Paint application

Bermocoll Chelates

Polysulfides

CMC

MetalAlkyls

Ethylene Amines

‘End’products

Mining, oil, biomaterials

Basechemicals

Chemicalintermediates

Performance/functionalchemicals


The New Functional ChemicalsReaching customers globally

Functional Chemicals & Polymer Chemicals


Polymer Chemicals

Sales offices

Production sites


Key growth drivers

Geographic expansion• Construction Chelates and Ethylene Amines sites and associated infrastructure in Ningbo, China

Industry consolidation• Participation in industry consolidation (Organic Peroxides, Sulfur Products)

GDP growth in emerging markets• Broad product offering supplied to basic and specialized end-use applications

Green Chemistry• Dissolvine GL – Green alternative to EDTA, NTA, Phosphonates and Phosphates• Fuzebox – Sustainable breakthrough in corrosion protection and chrome replacement in automotive industry


Diversity & Inclusiveness and management development• Developing the talents of our people by advanced programs

Sustainability in practice

Cradle to cradle• Investigation environmental impact of processes and products versus competition in all aspects

Green Chemistry• Polysulfides – Energy savings construction material• Peridur – Leads to lower energy consumption in production of steel

Health• Salt Specialties One Grain Technology - One-on-one full salt replacement that brings pure NaCl and salt replacers into a single salt grain• Ferrazone - Iron source to treat iron deficiency anemia


Agenda




Customers

• Very broad customer base: apart from 100’s of markets and 1000’s of customers, we serve bigger customers like Chevron Philips, Johnson Diversey, BASF and DOW

• We follow our customers globally (e.g. Ningbo, China)

• Global own sales coverage in all markets

• B2B sales channel

• Key customer technical development agreements


Dissolvine® GL – Clean and Green

Market requirement for a readily bio-degradable chelateClose cooperation with big soapers


Elotex: Water resistant films in mortars

Market requirement to increase wet properties of Redispersable Polymer Powders


Ningbo: Strengthening local presence in ChinaNingbo, phase I (approved, €275 million

investment)• Infrastructure (2009)

• Chelates (2009)

• Ethylene Oxide (2010)

• Ethylene Amines (2010)

• Organic Peroxides (2010)


Costs

• Restructuring of our business for 5 – 8 years (cost reduction). Build up excellent track record

• Synergy on cost and quality expected from merger

• Operational Excellence projects at all sites

• One SAP system to stimulate standardization

• Central Purchasing of raw materials and transportation

• Energy reduction projects


Cash

• Renewed focus on OWC reduction

• Strong cash generative capacity

• Despite strong growth initiatives in 2009 & 2010, we expect to be cash positive in both years


Focus activities 2010

• Improve Health & Safety performance

• Strict adherence to all Business Principles

• Full integration of Polymer Chemicals into Functional Chemicals

• Management of Ningbo growth projects

• Strict Margin Management

• Cost reduction through restructuring

• Reduction of Working Capital

• Continue Operational Excellence


Thank you!

and… Please Be Safe!


Q&A

Rob FrohnBoard member responsible for Specialty Chemicals

Frank ShermanManaging Director Surface Chemistry

Bob MargevichManaging Director Functional Chemicals

Industrial Chemicals | Specialty Chemicals Teach In 71A Spotlight on AkzoNobel Specialty Chemicals 71

Industrial Chemicals

Werner FuhrmannManaging Director Industrial Chemicals

Industrial Chemicals | Specialty Chemicals Teach In 72

Agenda

1. Industrial Chemicals overview• Value chain, products and markets• Key growth activities• Sustainability



Industrial Chemicals key facts

2008• Revenue €970 million, excluding joint ventures• 1,800 employees, manufacturing plants in seven

countries• Chlor-Alkali, Energy, Salt, Monochloroacetic Acid • Primarily focused on Europe

Revenue by segment/end-market Revenue by destination

Chemicals & m/m fibersManufacturingRubber & plasticsFoodPaperAgroPaint

92%

Asia PacificEuropeAmericas

5%3%

53%4%

9%

5%

10%4%

11%

4%

Other


• Purity:

• Rock salt : 96 – 99%

• Solar salt : 99,5%

• Vacuum salt : 99,9%

• Applications: Chemical Transformation, Specialties, De-icing

Primary building block: High Purity Salt

water raw brine

450 - 500 m


Value chain of integrated businesses

Chlor

Alkali

20% captive

80% public grid

Electricit

y

Process

Steam

Salt

• MCA

• Chloromethanes

• Water Treatment

• Ethylene Amines jv

ENERGY• Process steam• 300 MW base load generation (AN share)

SALT• 4.200 kt CT

(via waterways)• 800 kt Specialties

• 500 kt De-icing

CHLOR-ALKALI • 1.100 kt chlorine

(via pipelines)• 1.200 kt caustic lye

• 300 MW base load requirement

DERIVATIVES • Worldwide business positions with the exception of water treatment

50% captive

50% merchant

20% captive

80% merchant

merchant

business


Operations & Market Positions

LeMoyneTaixing

OhmiSkoghall

Mariager

DelfzijlDeventer

RotterdamArnhem

BitterfeldHengelo

Ibbenbüren

Frankfurt

Amersfoort

Europe Worldwide

MCA 1

Chlorine (merchant) 1

Caustic lye (merchant) 1

Salt (chemical transformation) 1

Manufacturing

Joint ventures

R&D


• Growing with the customer

• Value chain extension

• Secondary use of caverns

• mTA (meso-Tartrate) anti-caking agent

• Small salt conversion units

• Participation in industry consolidation

Key growth activities


Sustainability

ENERGY• Co-generation ( 50%

higher fuel efficiency)• Renewable fuels

- Biomass

- Energy from waste

- Fuel cells & windparks

SALT• Secondary use of

caverns• Advanced anti-

caking agent (meso-Tartrate)

• Innovative crystallization technologies

CHLOR-ALKALI • Electrolysis efficiency

- From mercury tomembrane

- Zero gap technology

• Small salt conversion units

DERIVATIVES • High concentration

hypochlorite

• CO2 based chemicals

Chlor

AlkaliElectr

icity

Process

Steam

Salt

• MCA

• Chloromethanes

• Water Treatment

• Ethylene Amines


Agenda

1. Industrial Chemicals overview• Value chain, products and markets• Key growth activities• Sustainability



Fulfilling our customers’ needs and dreams

Functionality and hassle free delivery


Long-term business alliances

Chlor-Alkali Rotterdam:At the heart of our customers

AkzoNobel

Incinerator

Shin-EtsuEDC / VCM

HuntsmanMDI

HexionECH

Cl2

HCl

HCl

HClWaste

External waste

EDC

CausticHypo

Delamine

WasteWaste

Steam

Salt

Electricity


Costs - The Delfzijl cluster

Salt mining Salt production CA MCA

Ethylene Amines

3rd party customers

Energy

Ethylene AminesEnergy

Chlor-AlkaliMCA

Salt


• Scale and state of the art technology

• Integrated manufacturing chains (horizontal/vertical)

• Restructuring paying off

• Realigned chlor-alkali set-up

• Realignment of MCA supply chain

• Outsourcing of services

• Focus on Operational Excellence

• Flexible and efficient management of energy, the lifeline of our business

Costs


• Low OWC levels

• Favorable investment turnover

• Strong positive contribution to cash flow

• Plants in excellent shape

• Maintenance concept based on life cycle

• Chlor-Alkali 75% on membrane

• Energy mainly off-balance

Cash


Business leadership

Cost leadership

• Chemical Transformation Salt • Downstream products • Caustic lye

Marketleadership

• Existing sites

• New clusters

Business

Leadership


Thank you!

87Safe Harbor Statement | Specialty Chemicals Teach InA Spotlight on AkzoNobel Specialty Chemicals 87


Jan SvärdManaging Director Pulp and Paper Chemicals


Agenda



89Pulp and Paper Chemicals | Specialty Chemicals Teach In

Pulp and Paper Chemicals key facts

2008• Revenue €1.0 billion

• 2,700 employees

• Production in 27 countries

• Pulp and Paper Chemicals, Specialty Products

• A global supplier to the pulp and paper industry

Revenue by segment/end-market Revenue by destination

Asia PacificEuropeAmericas

PulpPaperSpecialties

55%31%

14% 15%

45%

40%


A valuable brand in the pulp and paper industry

Eka was established in 1896 and has grown to become a brand which is associated to quality, safety, innovation and knowledge in the pulp and paper chemicals business.



Chemicals increase the sustainability, quality and value of paper


Function

Water treatment

CoatingRetention Sizing Wet strengthBleaching Deinking

Application CoatingPaper machinePulp manufacturing Pulp

Where Eka adds value

Eka Chemicals adds value

Eka Chemicals Vision:

Be the preferred supplier of bleaching and performance chemicals to the worldwide pulp and paper industry


Eka Chemicals 31%

Eka is the world’s leading supplier of pulp bleaching chemicals

Kemira13%

Erco ww16%

On site12%

Arkema3%

Others9%

Tronox4%

Canexus13%

Global Sodium Chlorate Market Supply 2008


Eka is an innovative player in retention

What do we mean when we say Retention?We want to minimize the loss of valuable components

Example of poor retention


Paper produced with Eka retention systems

1980 - 2008

Eka Chemicals is growing faster than the market

0

10

20

30

40

50

60

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Million Tons Paper & Board


-1%

6%

5%

4%

3%

0% 10% 20% 30% 40% 50% 60% 70%

0%

1%

2%

80% 90% 100%

Demand growth is moving to emerging markets

Demand growth by region through 2024, %/a

Share of consumption in 2008, %

Source: RISI World Pulp and Recovered paper Forecast, August 2009

Average 2.4%/a

China

Res

t of A

sia

East

ern

Euro

peME

A

Latin

Am

eric

a

Western Europe Japan

North America


We are active wherever pulp and paper is produced

Eka Chemicals production

Eka Chemicals sales offices or sales representatives

Production sites

The majority of pulp and paper production is still based in mature markets

Recent investments


We invest where the growth is!

Different regions demand different strategies and we have more than 20% of our turnover in emerging markets

Traditional Paper and Board markets

(N. Am, W. Europe, Japan, S. Korea)

Regions with high growth in demand(China, other SEA, Brazil)

Regions with low costs and available

raw materials(S. America, Indonesia, Russia)

Paper & Board

PulpMajor asset restructuring and cost reductions in the supply chain

Growth investments in pulp and paper chemical plants and in technical support organization


Paper is more than just newsprint

We are particularly strong in the packaging board segment


World demand growth by product segment through 2024

Source: RISI World Pulp and Recovered paper Forecast, August 2009

2,5%

2,0%

1,5%

1,0%

0,0%

90%80%70%60%50%40%30%20%10% 100%

3,5%

Other

Containerboard

Tiss

ue

New

sprin

t

0%

0,5%

-0,5%

4,0%

3,0%

Printing and Writing

Demand growth, %/a

Share of consumption in 2008, %

Average 2.4%/a


1970 1980 20001990 2010

New Eka Technologies leading to increased partnerships

We file more than 15 patents every year

New bleaching product for

mechanical pulp

New bleaching product for chemical

pulpNew bleaching

technology replacing chlorine

New products improving printability

of paper

New bleaching sequence reducing energy consumption

New wet strength

products for food contact applications New water treatment

technology replacing traditional biocides

Chemical Island

Remote controlling

ChemicalsManagement

New paper chemical technology for

retention

New nano-particle retention systems for

high speed paper machines

Chlorine dioxide concept

Remote monitoring of chemical plants


Our sustainability priorities

Fiber

Energy

Water


Our products reduce customers’ use of fiber, water and energy Eka Products Our Priorities Eka solutions

High filler concept

Compozil FX

Reduced grammageconcept

Eka integrated solutions improve the total sustainability performance of our customers

Chemical Islands

Eka Purate

Fiber

Water

Energy

• Eka NP 2180

• Eka Purate

• Eka Compozil


Before treatment

White water tank for packaging board treated with Eka Purate

Treated with Eka Purate®


Agenda




Knowledge in customers’ operations

Key success factors


Key success factors

Attractive employer for highly skilled people in all regions


Key success factors

Innovative and focused R&D


Smart use of IT

Key success factors


Key success factors

Strong product lines with superior cost position


Technology accepted in all regions of the world

Key success factors


We do business with the largest pulp and paper companies

Almost all large paper producers are also large pulp producers

Sou

rce:

Fis

her I

nter

natio

nal

0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000

Norske

Mondi

Sappi

Smurfit-Stone

SCA

Smurfit Kappa

Nine Dragons

Abitibi Bowater

Nippon Paper

Oji

Asia Pulp&Paper

Georgia-Pacific

UPM

Stora Enso

International Paper

Paper & Board Capacity 1000 t/a

North AmericaWestern EuropeEastern EuropeLatin AmericaAsia PacificRest of the World

Source Fisher International


Pulp mill responsibility

Delivery points

GENERATOR

WATER

ClO2-gas

REDUCINGAGENT

H2O2

ACID

SODIUMCHLORATE ClO2

STORAGE

ClO2CONCENTRATION

ANALYSIS

AB

SOR

BTI

ON

The traditional way of making ClO2(chlorine dioxide)


WASTE PRODUCTS

GENERATOR

WATER

ClO2-gas

ClO2STORAGE

AB

SOR

BTI

ON

New delivery pointClO2

Pulp & Paper Chemicals responsibility

Close collaboration with the customer is a must to reduce costs

Eka ClO2 concept moves delivery point

REDUCINGAGENT

H2O2

ACID

SODIUMCHLORATE

ClO2CONCENTRATION

ANALYSIS


Changing delivery point – a way of working closer with the customer

Tres Lagoas opened in April 2009; one of more than 20 successful Eka Chemical Islands


Making remote seem close with Eka IT solutions

MILL B

OnlineData Transfer

MILL D

MILL E

MILL F

MILL A

MILL C

Eka Chemicals Technical Support- Trouble shooting- Specific problem- Benchmarking- 24/7/365


Process Development

Production Planning

Benchmarking

Logistics

Maintenance

ReducingConsumption

Staffing

Production Planning

VMI

New products

Improving quality

New services

Staffing

Maintenance

Utilization

Maintenance

Logistics

VMI

Raw materials

Utilization

Supplier’s Cost

VariableCosts

Fixed Costs

Customer’sCost

Customer’sPrice

We improve costs in all steps of the value chain


It’s not about moving costs around,It’s about removing them all together

Mutual Benefits

We go beyond chemicals

• Lower dosage

• Lower supply chain costs

• Lower energy consumption

• Lower usage of fresh water

• Remote monitoring and controlling with Industrial IT

• Total solutions for Chemicals Management


Cost reduction actions 2009

• Plant in Mo i Rana, Norway closed

• Production lines in Sweden, Finland, France and USA shut down for part of the year

• Research organization rationalized in Germany

• Various projects to reduce variable costs implemented


Capital intensive yes, but…

• Generated positive cash flow every year since 1999

• Technical life of installations longer than 10 years

• We invest less than depreciation and can still grow

• OWC has been a priority for several years:

• Chemical islands

• VMI solutions

• High focus on product portfolio management


Summary

We will grow profitably by:

• Continued asset restructuring and cost reductions inmature markets

• Continued investments and further improved servicecapabilities in growing regions

• Innovative chemistry and new products

• Use of modern industrial IT to eliminate costs and improveefficiency in the value chain

• Continued positive cash generation


Inspired….by Eka!

Thank you!


Q&A


Werner FuhrmannManaging Director Industrial Chemicals

Jan SvärdManaging Director Pulp and Paper Chemicals


Wrap-up



Safe Harbor Statement

This presentation contains statements which address such key issues as AkzoNobel’s growth strategy, future financial results, market positions, product development, products in the pipeline, and product approvals. Such statements should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues, and legislative, fiscal, and other regulatory measures. Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business please see our latest Annual Report, a copy of which can be found on the company’s corporate website www.akzonobel.com.

amsterdam, december 8, 2009 akzonobel specialty chemicals …… · 2016-07-22 · spotlight on...

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