Honam Petrochemical Corp.

2011. 4. 1

Shareholders, Affiliates & Locations

Honam Petrochemical Corp. is the core company of the Lotte Groups Chemical Division Lotte has around 57% of Honams share
Shareholders & Affiliates Locations

52%

Honam
100%

KP Chemical
Listed

Head Office (Seoul)

Titan Chemical Daesan Complex Honam Daesan MMA R&D Center Seetec (Daejeon)

Free Float

42.8%

50%

Daesan MMA
J/V with MRC (50%)

Lotte (Japan) Hotel Lotte (Korea)

10.0% 13.6%
50%

Ulsan Complex KP chemical

Seetec Lotte Mulsan (Korea) 33.6%

31%
J/V with LG Chem (50%)

Overseas Branch
Lotte E&C Beijing, Shanghai Qingdao, Guangzhou Hong Kong, Moscow New York Yeosu Complex Honam Daesan MMA

Products & Capacity _ Honam / DMMA

Honam has 1,750 KTA of Ethylene capacity and various types of downstream products in Korea
Yeosu complex
HDPE (380) Ethylene (750)
(Unit: KTA)

Daesan complex

(Unit: KTA)

(+250)
MEG (400) EOA (130) PC (80) PET (70) Ethylene (1,000)

LDPE (110) LLDPE (290) EO

(+20)

(+250)

EO

MEG (640)

Propylene (380)

PP (380)

(+200) (+20)

(+125)
BD (130) Mixed C4 MMA (50) PMMA (40)

Propylene (500)

PP (500)

BD (150) Mixed C4 MMA (90)

DMMA
BZ (165) Pyrolysis Gasoline TL (78) XL (47) Pyrolysis Gasoline

DMMA
BZ (320) SM (500)

* As of Dec. 2010

Products & Capacity _ Titan / KP Chemical

Titan has its Naphtha Cracker in Malaysia and PE capacity in Indonesia KP Chemical has its production facilities in Korea, United Kingdom and Pakistan
Titan
LDPE (230) Ethylene (720) HDPE (115) HD/LLD (220) Meta Xyl (160) O-Xyl (255) Benzene (102) PIA (200)
(Unit: KTA)

KP Chemical

(Unit: KTA)

P-Xyl (720)

PTA (950)

PET (434)

Propylene (480)

PP (480)

115KTA of Metathesis plant

Mixed C4 BD (100)

Ulsan Complex Capacity (Korea)

PTA (500) PET (150)

Pyrolysis Gasoline

BTX (220)

LCUK Capacity (UK)

PTA (500)

HD/LLD (450)

Indonesia Capacity
* As of Dec. 2010

LPPTA Capacity (Pakistan)

Sales Breakdown_ non-consolidated

Around 40% of Honam sales were exported to the overseas market in 2010. PE, PP, MEG, and SM account for around 65% of the sales.
Sales by Distribution Channel Sales by Product

Others EXPORT

NC/BTX SM EO&EG

DOMESTIC

PP PE

PE : HDPE, LDPE(EVA), LLDPE NC/BTX : C2, C3, M-C4, TBA, BTX Others : BD, PC, EOA, PET, MMA, POP

Market Situation

Price trends of Feedstock & Products ($/ton)

Financial Review _ Non-consolidated

Honam runs in the most stable financial structure among the Korean petrochemical companies
[Unit: Billion Won] 2010 Revenue Operating Profit 7,189 904 1,018 784 203 1,107 2009 5,970 718 853 797 234 952 2008 3,098 90 71 45 73 163 Asset Liabilities 2010 6,987 2,531 4,455 57% 532 1,377 [Unit: Billion Won] 2009 5,677 1,952 3,725 52% 1,113 812 2008 3,551 747 2,804 27% 355 293

I/S

NP before Tax Net Profit (Depreciation) EBITDA

B/S

Equity Liability/Equity
Cash & Cash Equ.

Debt

Quarterly Performance
2010 4Q Revenue Operating Profit EBITDA 1,793 256 307 3Q 1,751 186 236 2Q 1,842 216 267 1Q 1,803 246 297 4Q 1,630 115 173 3Q 1,650 224 282 2009 2Q 1,456 225 285 1Q 1,234 154 212 4Q 655 86 64 3Q 887 47 64 2008 2Q 819 64 80 1Q 738 66 83

Affiliate Companies _ KP Chemical

KP & Its Affiliates
Honam Share : 52% KP Chemical 75% LPPTA PTA : 500KTA 100% Lotte Chemical UK PTA : 500KTA PET : 150KTA 100% KP Chemtech Revenue Operating Profit 2010 2,428 151 232 181 76 227

[Unit: Billion Won] 2009 2,107 158 207 164 87 245 2008 2,094 9 35 4 95 86

I/S

NP before Tax Net Profit (Depreciation) EBITDA

Sales by Product Year 2010

Asset Liabilities 2010 1,436 445 991 45% 426 0 2009 1,229 402 826 49% 291 0 2008 889 253 637 40% 141 0

B/S

Equity Liability/Equity Cash & Cash Equ. Debt

BTX : P-X, OX, BZ, etc

Consolidated Financials & Other Affiliates

From 2011, Honam will release the quarterly consolidated financial reports according to the Korean regulation.
[Unit: Billion Won] 2010 Revenue Operating Profit 12,403 1,263 1,285 895 285 1,548 2009 8,596 989 1,048 890 312 1,301 Daesan MMA 50.0% 391 / 69 MMA/PMMA business MRC 50% Utility supply to Daesan Plant LG chem 50% Construction company Company Share Sales / Net Profit (2010) [Unit: Billion Won]

Other Important Affiliates

I/S

Net Profit before Tax Net Profit (Depreciation) EBITDA

Remark

2010

2009 6,593 2,437 4,155

Seetec

50.0%

395 / 44

B/S

Asset Liabilities Equity

8,613 3,626 4,987

Lotte E&C

31.2%

3,665 / 87

KP Chemical and 8 other affiliate companies.

Investment Plan
On-Going Investment Project Investment Cost (Billion won) Capacity (KTA)
Ethylene 720 PE 1,000 PP 480 BD 100 130 / 24 50 Ethylene 250 HDPE 250 PP 200 GE(Glycol Ether) 50 HPEO 100 PET film (Optical) 20 EO 100 ETA 50 Ethylene 400 HDPE 380 PP 80

Location

Mechanical Completion
2010. November (completed) 2010. 4Q (completed) 2010. 4Q (completed) 2012. 1H

Titan Acquisition

1,500

Malaysia Indonesia Yeosu Yeosu Yeosu

BD/BN-1 Plant 3rd EOA Plant NCC expansion

150 32 520

GE/HPEO PET film EO/ETA Plant

54 90 165

Daesan Ulsan China

2012 2012 2012

Uzbek Project

96mil USD

Uzbekistan

2015

Vision 2018 Aspiration

Top tier Asian Chemical company with the revenue target of 40 trillion won.

Opportunistic
Resource/ Energy biz
Oil & Gas Enter up-stream Biz Natural resources/ energy Raw materials for the new business

Core Business
Basic chemical
Current Core biz such as olefins & aromatics Biz expansion based on 'Cash cost' competitiveness & market

Application Industry
Auto/Mechanics Electronics Construction/ Environments Energy/ Power

Advanced material

Performance material & Value-add chemical Focus on Eco-efficient materials

Provide Solution

New Biz New business opportunities considering megatrends from Proactively respond to future Megatrend risk & opportunity

Consumer goods Bio/ Pharma

10

Growth History of Honam

Honam achieved rapid growth thru organic & inorganic efforts
CAGR ~30%
Consolidated Honam only Inorganic growth Organic growth

(Billion Won)

M&A and Global expansion

CAGR ~13%

Completion of Integration

Acquired Titan ('10) Acquired LPPTA & LCUK (09 & 10) Daesan plants revamping (08)

CAGR ~11%

Downstream expansion

Established Daesan MMA (06) Acquired KP Chemical (04) Acquired Hyundai Petrochem (03) Downstream expansion (EG, HDPE, PP, PET, EOA, MMA)

Completed Naphtha cracker (92) Extended HDPE(88), PP(88), EG(91) Founded Honam Petrochem (76)

1980
Consolidated ($0.1B)

1985

1990

1995 ($0.6B)

2000 ($1.1B)

2005 ($5.9B)

2010

2011

($10.6B(E)) ($13~14B)

11