umicore in south americaumicore in south america franz-josef kron, senior vice-president south...

Umicore in South America

Umicore in South America

Franz-Josef Kron, Senior Vice-President South America

Stephan Blumrich, Vice President Automotive Catalysts Brazil

Bank of America –

Merrill Lynch South American investor field trip

São Paulo, 17 May 2011

Franz-Josef Kron, Senior Vice-President South America

Stephan Blumrich, Vice President Automotive Catalysts Brazil

Bank of America –

Merrill Lynch South American investor field trip

São Paulo, 17 May 2011

2

Overview

History of Umicore’s operations in South America

Umicore’s footprint in South America

Umicore’s business in South America

Focus on Umicore’s automotive catalysts business in South America

3

1973

GuarulhosDegussa (PMG) competitor take-

over

1973

ManausAcquisition plant

2000

Brazil/Argentinadmc2/Cerdec spin-off

2001

Brazil/Argentina PMG acquisition by OMG Inc

1991

AmericanaAutocat

plant 1953

BrazilDegussa (PMG) activities started

1985

Buenos

Aires Degussa (PMG)

1981

São PauloSGM Brazil starts (UMS)

1986

Americana Cerdec

stains,Degussa quab

plant,Barlocher

plastic stabilizers1979

AmericanaDegussa industrial plant glaze system

1992

AmericanaAutocat

tech centre

1998

AmericanaAutocat

expansion2001

GuarulhosTechnical Materials TMA activities

2003

Brazil/ArgentinaPMG acquisition by Umicore

2008

Pilar

New PMC factory (incl. APIs)

History of Umicore’s operations in South America

50s –

60s 70s 80s 90s 00s

1973 Americana

Acquisition plot

2003

Callao (IEQSA)

Acquisition of 40% stake

by Umicore

4

Umicore’s footprint in South-America

1,059 people* & 5 production sites

CallaoPeru (# 419)

•

Zn-based building products & powders production

•

Site of associate IEQSA

(part of BU BP)

PilarArgentina

# 40

•

API production•

Serving BU PMC

GuarulhosBrazil

# 381

•

Regional headquarters•

PM-based products manufacturing

•

Recycling service ???•

Serving BU PMC, TM, PEM, EP, PMR, JIM & TFP

AmericanaBrazil

# 108

•

Autocat

production•

Serving BU AC

ManausBrazil

# 106

•

PM-based products manufacturing

•

Serving Bus PMC, TM, PEM, EP, PMR, JIM & TFP

*Headcount based on 31/12/2010

AC

Automotive CatalystsPMC

Precious Metals ChemistryTFP

Thin Film ProductsTM

Technical MaterialsPEM

Platinum Engineered MaterialsEP

ElectroplatingBP

Building ProductsPMR

Precious Metals refiningJIM

Jewellery & Industrial Metals

South America

represents 8%

of workforce*

South America

represents 8%

of workforce*

5


Guarulhos, Brazil

Guarulhos (10 km from São Paulo)

•

Plot: 26,572m2

•

Constructed area: 19,059m2

History

•

Acquired in 1973 by Degussa

•

Acquired in 2003 by Umicore with PMG acquisition

•

Continuously expanded through the years

Operations of 7 Business units

Regional headquarters

•

Capturing and leveraging industrial & administrative synergies

6


Manaus, Brazil

Manaus (in Amazonas)

•

Plot: 12,315m2

•

Constructed area: 4,366m2

History

•

Acquired in 1973 by Degussa

•


Operations of 7 Business units

7

Americana (130 km from São Paulo)

•

Plot: 249,000m2

m2

•

Construction: 10,000m2

History

•

Start up in 1991

•

Pioneer in automotive catalyst technology and manufacturing in South America

•

Tech Center start up in 1992

•

Expansion in 1999

•


•

Tech Center expansion in 2009


Americana, Brazil

8


Pilar, Argentina

Pilar

(40km from Buenos Aires)

•

Plot: 10,000m2

•

Construction: 3,250m2

History

•

Start up in 2008

Precious Metals Chemistry operation

•

Integrated operations of the BU

•

Focus on APIs (Active Pharmaceutical Ingredients)

9


AutomotiveCatalysts

PreciousMetals

Management

PreciousMetals

Refining

BatteryRecycling

Jewellery &IndustrialMetals

ZincChemicals

Electro-plating

Cobalt &SpecialtyMaterials

PreciousMetals

Chemistry

BuildingProducts

TechnicalMaterials

PlatinumEngineeredMaterials

ThinFilm

Products

Electro-Optic

Materials

EnergyMaterials

PerformanceMaterials

CatalysisRecycling

South America

represents 7% of turnover*

South America

represents 7% of turnover*

*

2010 turnover by destination,

excluding Precious Metals Management *

2010 turnover by destination,

excluding Precious Metals Management

10


The South American market

Constant economic growth around 4 % (4,5 % for Brazil), with high domestic demand

Brazil continues to be the economic engine in South America

•

Foreign investments high in all industrial sectors

Automotive Industry announced investments of €14bn for the next 5 years

•

Significant improvement of economic situation of

the poorer part of the population, with low unemployment rates, resulting in increased purchase power

•

Risks: Inflation and exchange rate, lack of qualified people

South America today represents some 7% of Umicore’s external turnover (excluding PMM)

•

Umicore invested €~10M per year in last 4 years

•

Investment intensity expected to increase significantly in coming years

11


Thin Film Products

Activities

•

Production of silver targets used in optical data storage (CD, CDR, DVD)

•

Offering a closed loop business (recycling services)

(typically only 30% of a target is used)

Located in Guarulhos & Manaus, Brazil

Market position

•

Serving the domestic market

•

Market leader in the region

12


Precious Metals Refining

Activities

•

Gold refining and recycling services

•

Production of investor bars

•

Sampling of low grade material like spent automotive and industrial catalysts, activated carbon, e-scrap etc., prior to shipment to Hoboken plant, Belgium


Market position

•

Customer base: gold mines, jewelries, chemical and electronics industry, scrap collectors/dealers

•

Market leader in gold refining in Brazil

•

Leading position in low grade materials collection of processing in Hoboken

13


Automotive Catalysts

Activities

•

Production of three way catalyst (TWC) for all fuels

(flex Fuel systems)

•

Production of Diesel Oxidation Catalysts for diesel engines

•

HDD catalyst technologies under implementation

•

Own Technology development centre

Located in Americana, Brazil

Market position

•

Serving the South American car production industry

•


14


Precious Metals Chemistry

Activities

•

Production of chemical compounds based on precious

metals for several applications

•

Automotive Catalyst production

•

Chemical catalyst production (fine chemicals, agrochemical & pharmaceutical industries)

•

Production of Active Pharmaceutical Ingredients (API)

for Anti-Cancer-Drugs (cis-Pt, carbo-Pt, oxali-Pt).

•

Offering a closed loop business (recycling service)

Located in Guarulhos & Manaus, Brazil, & Pilar, Argentina

Market position

•


•

Umicore is the only global player with a local production

15

Activities

•

Production of gold & silver metals & alloys for jewellery and industrial production

•



Market position

•

Sizable jewellery and broad base of industrial customers

•

Largest local player in fragmented market


Jewellery & Industrial Metals

16


Electroplating

Activities

•

Production of precious & base metals electrolytes

used in technical & decorative applications

•

Applied technology support

•

Laboratory services

•



Market position

•

Customer base: electronics industry, fashion jewellery, sanitary fittings

•


17


Platinum Engineered Materials

Activities

•

Production of catalytic gauzes for the ammonia synthesis

•

Production of thermocouples for the steel industry

•



Market position

•

Serving the domestic market as well as export

•

Market leader in South America

•

Umicore is the only global player with a local production

18


Technical Materials

Activities

•

Production of silver-based brazing alloys

•

Production of silver based contact materials

Located in Guarulhos and Manaus, Brazil

Market position

•

Broad industrial customer base

•

Market leader in the domestic market (Brazil)

•

Significant export business (mainly to US)

•

Umicore is the only global player with local production

19


IEQSA (40% Umicore)

Activities (zinc transformation)

•

Production of (alloyed) zinc sheets used in building

•

Production of (alloyed) zinc products for galvanisation industry

•

Production of zinc products for primary batteries

•

Production of zinc oxide powders used in chemicals

Located in Callao, Peru

Market position

•

Small domestic market

•

Mainly export driven

•

Largest player in South America

Umicore Automotive Catalysts in South America

Umicore Automotive Catalysts in South America

21

•

Global

position

of some 30%

similar to other

global players

Johnson Matthey

and BASF

•

Regional positions

Market leader (#1 or #2 position)

Smaller player (distant #3)

Umicore Automotive Catalysts

Position in the car market

North-AmericaNorth-America

EuropeEurope

ChinaChina

KoreaKorea

South-AmericaSouth-America

Circles indicative of 2010 car production volumes

(≠

catalyst revenues)

JapanJapan

IndiaIndia

RussiaRussia

AustraliaAustralia

22

Umicore

Automotive Catalysts

Production & development facilities

Port Elisabeth S-Africa

•

LDV production

Hanau

Germany

•

Headquarters•

R&D & test centre

Onsan/AnsanKorea

Ordeg (50% JV)•

Test Centre•

LDV production

Himeji Japan

ICT (50% JV)•

R&D & test centre•

LDV production

SuzhouChina

•

LDV & HDD production•

Test Centre (2012)

Karlskoga Sweden

•

LDV production

Rheinfelden Germany

•

LDV & HDD production

Florange France

Americana Brazil

•

Test centre•


Auburn Hills USA

BurlingtonCanada

•


•

Test centre

TulsaUSA

•

R&D satellite•

LDV production

•


23

São Paulo Santiago de Chile

South American vehicle market

Automotive Catalysts in South America

Buenos Aires

24


Legislation review

2007 2008 2009 2010 2011 2012 2013 2014Brazil PL6

ArgentinaChileSantiago (Chile) Tier2 Bin8 / Euro4

Colombia US87 / Euro1

EcuadorVenezuela

2007 2008 2009 2010 2011 2012 2013 2014BrazilArgentinaChileSantiago (Chile)ColombiaEcuador

2007 2008 2009 2010 2011 2012 2013 2014Brazil Promot4

Santiago (Chile)

Emission Requirements for L ight Vehicles (passengers cars & light commercials)

Emission Requirements for Heavy Duty Diesel

Emission Requirements for Motorcycles

US94 / Euro2

Euro3 Euro5

US07 / Euro4

Euro2 (for buses)

Tier1 / Euro3

Euro5Euro4Euro3

US06 / Euro2

Euro2

US10 / Euro3

US87 / Euro1

US87 / ECE93 PV & ECE95 CV

US98 / Euro3

US98 / Euro3

Euro3

PL4 (Tier1) PL5 (NLEV)

Tier1 / Euro3

Euro3 Euro4 Euro5

Tier2 Bin5 / Euro5

Tier1 / Euro3

25

World

0

20

40

60

80

100

120

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

(in million vehicles)

South AmericaMiddle East/AfricaSouth AsiaGreater ChinaJapan/KoreaNorth AmericaEurope

Source: CSM (2005-2010 actuals, 2011-2017 forecasts)

South-America

0

1

2

3

4

5

6

7

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017


OtherArgentinaBrazil



Passenger cars & light duty vehicles production

•

South America is a relatively small, but continuously growing market

•

Market mainly driven by production in Brazil

(in million vehicles) Source: CSM (2005-2010 actuals, 2011-2017 forecasts)

26

Vehicle production in South America per fuel type

0

1

2

3

4

5

6

7

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017


E100GAS-E100GAS-E85GASDIESEL



Passenger car & light duty vehicle drivetrains

•

Flex Fuel systems are dominant for passenger vehicles and light duty power trains

•

This is driven by the Brazilian energy portfolio

(in million vehicles) Source: CSM (2005-2010 actuals, 2011-2017 forecasts)

27


Passenger cars & light duty vehicles

Total production forecast for 2017 of close to 6 million vehicles compared to 4 million in 2010

•

implying CAGR of >5%, in line with global market

•

Brazil: Main producing country is representing some 3/4 of the market

•

Argentina: Second producing country (1/5), mainly for the Brazilian market

•

Other producing countries are Columbia, Venezuela, Ecuador (and Uruguay)

Asian (Korean & Chinese) producers are starting operations in South America

Anfavea/Adefa

associates:

28


Heavy duty diesel vehicles

HDD starting to fall under emission legislation

•

Brazil: Production of 237,000 trucks & buses in 2010, to grow to 300,000 units in 2015,

assuming a growth rate of 5 % per year

•

Argentina: Production of 20,900 vehicles in 2010, to grow to 26,000 units in 2015,

assuming a growth rate of 5 % per year

Asian (Korean & Chinese) producers are verifying the South American market

Above numbers do not include non-road machinery

Anfavea/Adefa

associates:

29

…

close to our customers and industrial partners

Umicore Automotive Catalysts South America

Production site situated in ... …

Americana

30

Umicore Automotive Catalysts South America

Market position

•

Market Leader in South America since 1991

•

Best possible supply records (zero-failure since the foundation in 1991)

•

Full global integration into the Umicore AC network

•

Complete technology portfolio with Three Way Catalysts (TWC) for

all fuels, Diesel Oxidation Catalysts (DOC) and HDD technologies

•

Pioneer in Automotive Catalyst Technology and local manufacturing in South America (Gasohol, Alcohol and Flex-Fuel)

•

Own Technology development centre in Americana since 1992

(Start-up of HDD Test cell for big engines in 2009)

•

Applying “operational excellence tools”

(TPM, RCM, VSM,…)

•

Integrated QSHE system, QS certifications since 1994, ISO 14001 certification since 1999

•

OHSAS certification in 2007 and SA 8000 certification in 2011

31

Objective to develop specific catalysts for the special fuels and applications in South America,

such as Gasohol, Alcohol, CNG, Flex Fuel and Diesel

Umicore Automotive Catalysts South America Technology development centre

Technology development centre supports our and our customers local product developments

32

Thank you for your attention

3333

Forward-looking statements

This presentation contains forward-looking information that involves risks and uncertainties, including statements about Umicore’s plans, objectives, expectations and intentions.

Readers are cautioned that forward-looking statements include known and unknown risks and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Umicore.

Should one or more of these risks, uncertainties or contingencies materialize, or should any underlying assumptions prove incorrect, actual results could vary materially from those anticipated, expected, estimated or projected.

As a result, neither Umicore nor any other person assumes any responsibility for the accuracy of these forward-looking statements.

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