Palm Oil Sustainable

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Derivatives

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Palm Oil Palm oil is produced from the oil palm

tree (Elaeis guineensis) which grows in tropical regions. World production estimated at 53 million tonnes in 2012: Malaysia and Indonesia 87% Thailand 3% Columbia 2% Nigeria 2% ~21 other countries (6% combined)

It is a highly versatile vegetable oil and

widely used across packaged supermarket products today

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Palm Oil – The Most Efficient Oil Palm oil is an highly

efficient producer of oil per hectare of cultivated land

Coconut, the second most efficient crop after palm, produces less than half as much oil per hectare

Soy oil, the second most

produced oil after palm, is less than a tenth as efficient

Source: Altenergymag.com

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Palm Oil vs. Palm Kernel Oil Palm Oil (PO) PO is derived from the palm

fruits flesh

~53 million tonnes per year

Primarily used in the food and biodiesel industries

Palm Kernel Oil (PKO) PKO is derived from the palm

fruits kernel

~6 million tonnes per year

Used industrially in oleochemical and cosmetic applications

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Palm Oil Usage

80%

20%

2012 Global Palm Oil % Split of Total Usage

Food Industry

Biodiesel andOleochemicalsIndustry

Over 80% of Palm Oil produced is used in the food industry, ranging from margarine, cereals and crisps to sweets and baked goods.

The remaining 20% is divided between biodiesel, industrial applications and the oleochemical industry.

The Cosmetic Industry uses <1% of the worlds palm oil

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Palm Oil Usage

70% of cosmetic products

contain palm derivatives

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Palm Oil as a Value Multiplier

Palm Oil $800MT

Cosmetic Ingredient $3000MT

Value added $60000MT

Converted to

x 75 Original Cost

More value is added to PO/PKO in cosmetics than any other industry.

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Why Support Sustainable Palm Oil? Millions of people depend on palm oil

1 million workers 3 million smallholders Many million households

Social issues in palm cultivation

Displacement of indigenous people Workers rights and conditions

Environment

Forest, peatland conversion Climate change Biodiversity loss Palm Oil is the most efficient oil crop

- trying to move away from it is environmentally wrong thinking.

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Palm Oil Usage

We believe it is OUR RESPONSIBILITY as an industry to ensure that we only use Sustainable Palm derivatives.

RSPO was formed in 2004 to work with the palm oil (PO) and palm kernel oil (PKO) industry

‘Promoting the production and use of sustainable palm oil for People, Planet and Prosperity.’

The RSPO is a non-profit organization comprising oil palm growers,

palm oil processors and traders, consumer goods manufacturers, environmental NGOs, social NGOs, banks/investors and retailers.

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Poll Question #1

How involved is your organization with Sustainable Palm? Not at all involved Concerned about the issues around Palm Oil production Developing a plan to support Sustainable Palm Active member of RSPO

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Croda’s Commitment Sustainable palm oil and derivatives is a matter explicitly included in Croda’s sustainability strategy. Since 2011, we have reported progress against targets that support our objective ”to fully support sustainable palm oil (PO) and palm kernel oil (PKO) and to keep working with the industry to secure a sustainable source of derivatives” In 2012, we met a key milestone when our Singapore site was RSPO Supply Chain Certified to handle PO/PKO Sustainable raw material via Mass Balance.

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Segregated

Mass Balance

Book and Claim

IP

Certified Sustainable Palm Oil (CSPO)

A firm step in the right direction Mass Balance will drive the industry towards true sustainability

Aspirational for the future. Impractical for the complex derivatives in Personal Care today

Increase in Cost and Complexity

A firm step in the right direction Mass Balance will drive the industry towards true sustainability by consuming volume of CSPO

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Book and Claim The Book and Claim system allows CSPO millers and their supply

base to issue certificates for each ton of oil they grow and process, which can then be purchased by the end user for the equivalent volume of oil that goes into their product. Advantages: Connects CSPO producers to end users of palm oil,

without the involvement of the entire supply chain. Disadvantages: Administrative only. No audit. Delivered physical palm

oil is not likely to be the CSPO produced by a certified plantation, small holder or miller

RSPO Certified Plantation

Conventional Plantation

100 Ton

X Ton

X Ton

X Ton

100 Ton

Transporter Refiner Consumer

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Mass Balance The Mass Balance supply chain allows CSPO and non-CSPO to

be mixed through the supply chain but administratively monitors the mass of CSPO produced and sold. Advantages:

Actively encourages support for growers to produce CSPO and move towards a segregated supply chain system.

Fully auditable & ensures that no Sustainable oil is left unsold Creates pull towards segregated product

RSPO Certified Plantation

Conventional Plantation

100 Ton

X Ton

X Ton

100 Ton

X Ton

Transporter Refiner

CSPO Consumer

Consumer X

Ton

Sustainable material is monitored across the supply chain

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Croda’s Progress and Aspirations

2006 Joined RSPO

2010 Adopted Book and Claim practices

2012 Singapore becomes Croda’s first site to be RSPO Supply Chain Certified

2014 Audits in place for remaining European and LATAM manufacturing facilities

2011 Reported progress against Sustainable Palm targets

2013 key UK & US sites RSPO certified

2015 100% RSPO certification of Supply Chain

2017 Only ‘handle/supply’ RSPO certified palm oil products

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Global Supply Chain

Singapore Rawcliffe Bridge Mill Hall Atlas Point Mevisa (Coming Soon) Brazil (Coming Soon)

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Croda Commendation

“RSPO commends Croda's efforts in moving towards sourcing for physical Certified Sustainable Palm Oil. We acknowledge the complexity of the palm oil supply chain, especially when it involves the palm oil and palm kernel oil derivatives market. Thus, Croda's initiatives are indeed an affirmative step towards the right direction, playing a significant role in the collective efforts to transform markets and make sustainable palm oil the norm.”

Darrel Webber, RSPO Secretary General

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Poll Question #2

How does your company plan to communicate their commitment to Sustainable Palm? No external promotion Corporate PR & advertising only Make a claim on finished packaging Promote as part of our companies sustainability goals

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Switching to the SP version does not involve any change to the ingredient specification, manufacturing process or quality so no re-approval is required.

SP POLAWAX NF MBAL-PA-(MH)

“SP” = Sustainable Palm origin “MBAL”= system by which SP is supported (Mass Balance)

By purchasing Mass Balance certified products, “contributes to the production of certified sustainable palm oil” may be claimed on relevant finished goods packaging.

Demonstrate your Proactive Commitment

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Product Range Available Now! Sorbitan Esters SPAN™ Ethoxylated Sorbitan Esters TWEEN™

Sarcosinates CRODASINIC™ Ethoxylated Fatty Alcohols BRIJ™

Polyol Esters CITHROL™

Ethoxylated Fatty Acids MYRJ™

Emulsifying Waxes ARLACEL™ POLAWAX™ CROMUL™

CRODAPEARL™

Fatty Alcohols

CRODAFOS™

Emollient Esters CRODAMOL™

INCROQUAT™

INCROMINE™

CRODACOL™

Emollient Ethers ARLAMOL™ PROCETYL™

Specialities

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Switching to SP Ingredients

Sustainable Palm

Oil D

erivatives

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Summary Palm Oil is the most efficient oil crop & environmentally

sound

Personal Care ingredients are complex- RSPO Supply Chain Certification by Mass Balance is the key

Mass Balance serves to ensure that sustainable volume is drawn into the supply chain for the manufacture of Personal Care consumer products

Mass Balance is a very important step beyond “Book & Claim” physically involves the processing of sustainable

palm derivatives ensures Sustainable Oil is not left unsold

Sustainable Palm

Oil D

erivatives

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Summary Segregated, Identity Preserved traceable Palm Oil

derivatives will only develop in Personal Care with the transition through Mass Balance

Certified Sustainable Palm based ingredients provide the mechanism for the Personal Care industry to make a step change, meeting consumer expectations and developing the pathway to full traceability

A wide range of RSPO Supply Chain Certified Sustainable Palm based ingredients are available globally from Croda sites in Singapore, UK and USA

Croda is taking a leading position in the industry with Sustainable Palm Ingredients

Sustainable Palm

Oil D

erivatives

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Additional Information

To order free samples, click here. To contact us, email marketing-usa@croda.com

Links to the presentation slides and the event recording will be emailed to all attendees. Recordings of past events and information about upcoming events are listed on our website here.

Palm Oil Sustainable

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Derivatives

Thank you