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PresentationtoInvestors/Analysts

OpportunitiesinProcessTechnologies
30th January2014

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CautionaryStatement
Thispresentationcontainsforwardlookingstatementsthataresubjecttoriskfactors
associatedwith,amongstotherthings,theeconomicandbusinesscircumstances
occurringfromtimetotimeinthecountriesandsectorsinwhichJohnsonMatthey
operates.Itisbelievedthattheexpectationsreflectedinthesestatementsare
reasonablebuttheymaybeaffectedbyawiderangeofvariableswhichcouldcause
actualresultstodiffermateriallyfromthosecurrentlyanticipated.

IntroductionandWelcome
NeilCarson
ChiefExecutive

Programme
14.00

IntroductionandWelcome

14.10

OpportunitiesinProcessTechnologies
Q&Aandcoffeebreakafterthissession

15.30

AddingValueThroughTechnology

IainMartin

ProcessTechnologiesandtheChemicalsMarket

IainMartin

ProcessTechnologiesinChina
Summary
Q&Aandcoffeebreakafterthissession

16.50

ProcessTechnologiesandtheOilandGasMarket
SummaryandKeyMessages
Q&Aafterthissession

17.30

ClosingRemarksandFinalQ&A

18.15

DrinksReceptionandDinner

NeilCarson
GeoffOtterman

HenryLiu
GeoffOtterman
DonRoche
GeoffOtterman
NeilCarson

Introduction

Aworldleading
technologycompany

Successfoundedon
continuedinvestmentin
R&Dandproduct
development

Differentiation
throughtechnology

Provenstrategyin
placetodevelopnew
businessareas

Wellpositionedin
growthmarkets

Deliversvalue

OpportunitiesinProcessTechnologies
GeoffOtterman
DivisionDirector,ProcessTechnologies

Agenda

01
02
03
04
05
06

OpportunitiesinProcessTechnologies

GeoffOtterman

AddingValueThroughTechnology

IainMartin

PTandtheChemicalsMarket

IainMartin

PTinChina

HenryLiu

PTandtheOilandGasMarket

DonRoche

Summary

GeoffOtterman

OurAimsToday

Provide
anoverview of
ProcessTechnologies
activities,markets
andcompetitive
strengths

Insight
intothegrowth
drivers inProcess
Technologiesmarkets

Explain
howthedivisionis
wellplacedto
benefitfrom growth
inthesemarkets

Highlight
prospectsforthe
development of
thebusinesses
inthedivision

WhatisProcessTechnologies?
Coretechnologystrengthscombinedwithexpertiseandknowhowofourpeople
Catalysts
Highperformancecatalysts
Pellets,granulesandpowdersoftensoldon
tonnescale
Replacementcycleorcontinuousdosing
Investmentinnewproductdevelopment

Processes
Providesblueprint(flowsheet)onhowtobuild
andoperateaplant
Strongengineeringknowhow
Abilitytointegratecatalystwithprocessscaleup
Investmenttoimproveexistingprocess
technologiesanddevelopnewones

Forourcustomers
Optimisedplantefficiency
Performanceguarantee
SupportandservicefromJM
9

HistoryofProcessTechnologies
Buildingblocksforanewdivision

JMpgm
catalysts

ICISynetix

Intercat

Basemetal
catalysts

Additivesfor
FCCapplications

2002

2006

2010

2013

DavyProcessTechnology

Formox

Processtechnologies,process
engineering andlicensing

Formaldehydecatalysts,
licences andtechnologies

Process
Technologies
Division

10

DevelopmentoftheDivision

People

R&D

Worldclassscientistsandengineers

Continuedinvestment

Threadingtogethernewbusiness

Alignedwithcoretechnologycompetences

Attractingindustryexperts
Processandindustryknowhow

+++

Process
Technologies

Acquisitions

Capex

Marketleaders

Addedcapacityinanticipationofdemand

DifferentiatethroughR&D

Supportingregionalgrowth

Customerrelationships

Investingforthelongterm

Potentialforinvestment

11

OverviewofProcessTechnologies
Globalleaderinprocesscatalystsandprocesstechnology
>2,300Employees;10%inR&D

15%CAGRinSales
Europe

66%
1%
12%

600

NorthAmerica

500

China

400

MiddleEastandAsia

300

Other

200

5%

Intercat

100

16%

0
2009/10

TwoKeyMarketSectors

BroadGeographicalSpread
SalesbyDestination (1H2013/14288m)
Europe

22%

22%

2012/13

NorthAmerica
China

Chemicals

~60%

OilandGas

~40%

MiddleEastandAsia

8%

Other

24%
24%

12

UKsites

Aberdeen

GlobalCoverage

Billingham
Stockton
Clitheroe
Royston
London
Sonning Common

Bergen Perstorp
Utrecht
Brussels
Paris

Chicago
Sevierville

WestDeptford
Savannah

Moscow
Emmerich
Oberhausen
Beijing

Milan
Barcelona
Bahrain
Oman

Houston
Trinidad

Qingdao
NewDelhi
Panki

Seoul
Tokyo
Shanghai

Mumbai
KualaLumpur

RiodeJaneiro

9 ManufacturingSites

10TechnologyCentres

28SalesOffices
13

ProcessTechnologiesDivisionStrategy
Deliveringdoubledigitgrowth

Maintainleadingpositionsincatalystsand
processtechnologiesforchemicalsmarkets

Developlargerpresenceinoilandgasmarkets

Leveragecatalystandprocessexpertisefor
superiorgrowthinexistingandnewmarkets

Developprocesstechnologytocomplementcatalysts

Exploitexistingtechnologyadvantages

+
Investforgrowth

Expandcapabilities

MaintainR&Dspendat~5%ofsalesp.a.

R&D includingnewmaterials

Capex ~80100mp.a./2xdepreciation

Externalpartnerships

ImprovementinROIC

Targetedacquisitions

14

ServingTwoMarketSectors
Chemicals

OilandGas

Syngas

Refineries
Oleo/Bio
13%

Petrochemicals

Refineries
19%

Oleo/Biochemicals

DiagnosticServices
Gas
Processing
8%

Petro
chemicals
18%

~60%

Diagnostic
Services
11%

ofPTsales

Whatwedo

Syngas
30%

Catalystsandprocess
technology

Competitors
Clariant,Haldor Topse,BASF

GasProcessing

~40%

ofPTsales

Whatwedo
Catalystsanddiagnostics

#1or#2
inmajorityofourmarkets

Competitors
Grace,Albemarle,UOP,
Clariant
15

Catalyst

Licensing

JMcoveredtechnology/products/service

PTsChemicalsMarkets
Feedstock
NaturalGas

BuildingBlocks

Intermediates

Ammonia

EndUseProducts
Fertilisers

Syngas

SNG
GTL
Hydrogen

Formaldehyde

Methanol

MonoEthyleneGlycol

Petrochemicals

Coal
Petroleum

NaturalGasLiquids

CleanFuels

VinylChlorideMonomer

Adhesives

Construction
Packaging

Ethylene
Aromatics

PTA

Films,FibresandBottles

Propylene

OxoAlcohols

FilmsandCables

Butane

Butanediol

EngineeringPolymers

Oleo/Bio

Shampoo

BiomassandNaturalOils

NaturalDetergentAlcohols

DetergentsandSoaps

EdibleOilsandOtherOleochemicals

Food

Biorenewables

Biochemicals

16

ExpandingActivitiesinChemicalsMarkets
JMToday
JMasignificantplayerintargetedmarkets

Opportunity
OpportunityforJMtogrowwithin2bnp.a.
chemicalcatalystsandprocesstechnologymarket

Catalyst

Added
Value
forJM

Process
Technology

Expansion
Expansionthrough:
Increasingcatalyst+processofferingwithincurrent
portfolio
Developingintonewmarkets

NewMarkets

17

PTsOilandGasMarkets
JMhasstrongpositionsintargetedhighvaluemarkets
Refineries
Hydrogen

Leadingpositioninreforming,shiftandpurificationcatalysts
forhydrogenmanufacture

Refineries
Additives

UniqueproductofferinginFCCadditivesanddosingsystems
forimprovingefficiencyandenvironmentalperformanceof
FCCunits

Gas
Strongpositioninmarketforremovalofsulphurand
Processing mercuryfromgasstreamstoverylowlevels
Diagnostic Highvalue,specialistofferingsacrossthewholeoil
andgasvaluechain
Services

OpportunitiestoapplyPTsskillsincurrentandadditionalareasofoilandgasmarket:
Byinnovationandleveragingcorecompetencesinadvancedmaterials
Bypartneringandacquisition
18

RobustGrowthinExistingMarkets
UnderlyingMarketGrowth

SuperiorGrowthMarkets
Syngas

Petrochemicals

Chemicals

Catalyst
Market

Methanol

SNG

Formaldehyde

23%

4%

67%

10+%

5%

Oil

Catalyst
Market

12%
Gas

23%

Refineries
Refinery
Additives

Hydrogen

Diagnostic
Services
Subsea
Instrumentation

3%

57%

6%

10+%
19

PTbusinessfocus

Pgm
catalysts

GlobalDriversandtheirImpactonPT
Emission
control
catalysts

Obscuration
enamels

Pgms

Petrochemic
alcatalysts
and
processes

APIs

Medical
components

Ammonia
synthesisand
nitricacid
catalysts

Fine
chemicals

Cleanfuel

Emission
control
catalysts

Abatement
technologies

Lowcarbon

Hydrogen
catalysts

Purification
products

Automotive Electronics

Construc
tion

Bulk
chemicals

Biorenew
ables

Gas/coalto
products
technology

Energy
security

Alternative
energy

Catalysts

Pgm
refining

Resource
efficiency

Recycling

Pharma
ceuticals

Population
Growth
Urbanisation
Increasing
Wealth

Health
&Nutrition
Ageing
Population

Natural
Resource
Constraints

Environmental
Factors
ClimateChange
Regulation

Emission
control

Agricultural
chemicals

Carbon
Fuelcells
captureand
andbattery
storage
technologies
(CCS)

JMActivities

IndustrySector

GlobalDrivers

IndustrySector

JMActivities

Changeprovidesopportunity
20

ChangeDrivesGrowthforPT
Keyopportunitiesbeyondunderlyinggrowth

Shalegas,itsnewavailabilityandtheeffectonprocesseconomics
Greaterglobaldemandforfuels, particularlycleanerfuelsmadefromdirtier
andlessaccessiblefeedstocks
TheChineseimperativeforfuelsecurityandtheneedforcoalbased
chemicals
Demandforassetperformanceandintegrityareincreasingacrossour
markets

Couldadd100mp.a.
insalesby2020
Couldadd50mp.a.
insalesby2020
Couldadd100mp.a.
insalesby2020
Couldadd30mp.a.
insalesby2020

21

Couldadd100mp.a.insalesby2020

ShaleGas
TheChanges

KeyOpportunities

NeweraoflowcostnaturalgasinUS
Naturalgasliquids(NGL)feedstocks fromshalegas
providefavourableeconomicsforpetrochemicals
Stimulatedinvestments>$100bninUSchemicals
to2030

Newammoniaandmethanolcapacity
Gastoliquidstomonetisegas

CrudeOil

NaturalGas

USDryNaturalGasProduction
(trillioncubicfeet)

$/bbl
160

$/mmBtu
14

35

12

30

10

25

20

14%

15

20%

140
120

46%

Shalegas

100
80

8%

60
4

40
20
0
Nov07
Source:EIA

Mar09

Jul10

Nov11

Mar13

9%

9%

Nonassociatedonshore
Nonassociatedoffshore

28%

Tightgas

22%

8%
9%

Coalbed methane
Alaska
Associatedwithoil

10

0
1990

2%
1995

2000

2005

2010

2015

2020

2025

2030

2035

6%
1%
7%
2040

Source:EIA

22

Couldadd50mp.a.insalesby2020

GlobalDemandforFuels
TheChanges

KeyOpportunities

Productslateshifttowardsmiddledistillate(diesel)
Trendtowardsheavierandsourercrudes
FCCcapacitygrowthinAsia(fuels)andMiddleEast
(chemicals)
Effortstomaximiseproductionfromdepletedfields

Stronggrowthinhydrogendemand
Greaterdemandforrefineryadditives
Tracerstomaximisefieldproductivity

AverageGlobalCrudeOilQuality
*API
APIgravity
(measureofcrudedensity)

Light

GlobalDemandbyProduct ShifttoDistillate
(millionbarrelsperday)

Sulphur(wt%)
35.0

1.40

Sour

34.5
1.30

33.5

100

102
88

89

108

113

118

94

MiddleDistillate

60

32.5

Jet/Kero

40

1.10

32.0

Naphtha

20

31.5

1.00
2011

2012

2015

2020

2025

2030

2035

Sweet

LPG
HeavyFuelOil

80

1.20

33.0

Source:HartEnergy

OtherProducts

120

34.0

Heavy

140

Gasoline

0
2011

2012

2015

2020

2025

2030

2035

Source:HartEnergy

23

Couldadd100mp.a.insalesby2020

CoalbasedChemicals
TheChanges

KeyOpportunities

Energydemandgrowthdrivesuptakeofcoalresources
inChina
Chinaisnowthemajormarketforcoaltochemicals
Coalminersandenergycompaniesinvestingincapacity
Airqualityrequirementsdrivingamovefromcoaltogas
asanurbanfuelinChina

HugeinvestmentinnewcapacityinChinarequiring
catalyticprocesses
CoaltoSNG(substitutenaturalgas)
Coaltomethanoltoolefins
Newmethanolderivativetechnologiese.g.MEG

ChinaCoalConsumptionbySector

ChinaNaturalGasConsumption/Demand

(milliontonnes)

CAGR
~5.3%

3,778
9%
5%
15%
17%

4,640
~6% Others
~7% Chemicals
~14% Cement
~16% Steel
~57% PowerGeneration

54%
2011

2015E

Source:CCBInternational2012,CCTD,SXCoal,A.T.Kearneyanalysis

3%
1520%
23%
34%
67%

bn Nm3 p.a.
450
400
350
300
250
200
150
100
50
0

ImportNG
130

31

43

53

101

108

112

2011

2012

2013

93
18

120

161

150

2015

2020

SNG
OtherNG
Production

Source:ChinaPetroleumandChemicalIndustryFederation

24

AssetPerformanceandIntegrity

Couldadd30mp.a.insalesby2020

TheChanges

KeyOpportunities

Capex pressuresmean

Highefficiencycatalystsforhighefficiencyreactors
Processchanges,revampsandrepurposing
Smarttechnologyforflowcontrol,assetinspection
andproductassurance

Greatervaluefrommoreefficientprocessesandbetter
catalysttechnology
Use/reuseofolderassets

Financialandreputationalrisksofpoorassetassurance

25

AddingValueandDeriskingforCustomers
WhychooseJM?
Foranewplant

Whentheplantisrunning

ChoosingJMstechnologiesenablesourcustomersto:
Maximisethecredibilityofanewprojectwhenraising
finance
Reducethecapex requiredtobuildtheplant
Delivermaximumproductivity,reliabilityandflexibility
fromtheasset
Minimiseenergyconsumptionandemissions

JMsR&D,technicalsupport,productsandservicesallow
ourcustomersto:
Optimiseandfurtherimproveplantoperation
Reduceoperatingcosts
Maintainreliabilityandavailability

Customersassetscostbns
tobuildand100mstorun

ChoosingJMsproductsandservicesprovides
credibletechnologyandderisksinvestment
26

TheJMAdvantage
Howwestayahead

UseTechnicalStrength

ProtectValue

Producesuperiorproducts,reduceourproduction
costs

StrongknowhowandIP

Additionalservicesthataredifficultforour
competitorstoreplicate

Continuousimprovementfasterthanour
competitors

BuildCapacityandCapability

IntegrateTechnicalandCommercialSkills

Localtogrowthmarkets

Enabledevelopmentofexistingandnewmarketareas

Inhousecapabilities

27

KeyTakeaways

Stronganddefensible
positioninall
ourmarkets

Abletoleverageboth
catalystandprocess
technology

Technologyand
knowhowinvestment

Globaldriverssupport
increasingdemandfor
PTsofferings

Stablemargins

Doubledigitgrowth
onaverageforthe
foreseeablefuture

28

AddingValueThroughTechnology
IainMartin
TechnologyDirector,ProcessTechnologies

Introduction

Strongtechnologyunderpins
leadingmarketpositions

Highleveloftargeted R&D
investment tosupport
futuregrowth
~5%ofsalesp.a.

Abilitytointegrate catalystand
processdevelopment
GreatervaluetoJM
Createsopportunitiestodevelop
newmarkets
Increasedresilienceto
competitivethreat

30

UniquePositioninMarket
Technologylicensing andcatalyst knowhow
spanningmanydecades

Pgm and
basemetal
chemistry

Modelling

Recognisedtechnologyleaderwithbroad
portfolio
Addingvaluethroughdeepunderstandingof
customeroperations
Strongtrackrecordofintroducingnew
technologies
Independent fromchemicalmajors

Values
recycle

Character
isation

Manufacture
atscale

Synthetic
Chemistry

ADVANCED
MATERIAL
DESIGN

Surface
science

Specialist
technology
expertise

Integrating
into
applications
Coatings

Testing

Licences

31

SeriousScienceApplied
toCatalystDesign

TranslatingCatalystDesign
intoManufacturing

CreatingProcessesAround
theCatalyst

EffectiveTechnology
TransfertoRealise
theValue

SeriousScienceAppliedtoCatalystDesign
Expert scientistsandengineers
Worldclass catalystresearchanddevelopment
facilitiesinUKandUSA
Broadcatalysisplatforms:basemetals,pgms,
zeolites,absorbents
Coreskillsincatalysisunderpintechnology
leadership:

Catalystdesignandpreparation

Characterisationandanalysis

Testingunderindustrialconditions

Reactionengineering

Strongcatalystapplicationknowledge

Application
Expertise

Chemistry
Knowledge

Catalyst
Testing

Manufacturing
Knowledge

32

SeriousScienceApplied
toCatalystDesign

TranslatingCatalystDesign
intoManufacturing

CreatingProcessesAround
theCatalyst

EffectiveTechnology
TransfertoRealise
theValue

TranslatingCatalystDesignintoManufacturing
Closelinkagebetweenlaboratory,pilot
andcommercialfacilities
Widerangeofstateoftheartscaleup
equipmentavailable
Researchfocusonimproved
productionprocesses
Comprehensiveglobalmanufacturing
andsupplychains
Globalnetworkprovidesinfield
technicalsupport

33

SeriousScienceApplied
toCatalystDesign

TranslatingCatalystDesign
intoManufacturing

CreatingProcessesAround
theCatalyst

EffectiveTechnology
TransfertoRealise
theValue

CreatingProcessesAroundtheCatalyst
Existingprocessesare
mademorecompetitive
andnewprocessesare
developed
Strongsynergywith
inhousecatalyst
capabilities
Design,buildandoperate
miniplantsto
commercialisetechnology
Provenabilitytoscaleup
directlytocommercial
scale

34

SeriousScienceApplied
toCatalystDesign

TranslatingCatalystDesign
intoManufacturing

CreatingProcessesAround
theCatalyst

EffectiveTechnology
TransfertoRealise
theValue

EffectiveTechnologyTransferToRealiseTheValue
Manage therisksassociatedwithfirst
demonstrationofcatalystorprocess
technology
Successfullyoperatestrategicallianceswith
majoroperatingcompaniestoaccelerate
commercialisation
Transfertechnicalknowhowthroughbasic
engineeringpackages
Supportlicenseesduringlongtermplant
operationtobesteffect

35

R&DinAction
Creatingnewmarkets
2Propylheptanol(2PH) agrowingintermediateforimprovedplasticiserperformance

2Propyl
heptanol

Plastic
CoatedCable

Butene
Coal

Gasification

Methanol

Methanolto
Olefins(MTO)

Propylene

Polypropylene
Carpets

Ethylene

Polyethylene
PlasticBags

36

AddingValueThroughTechnology
Innovationenablesustoincreasesalesmargin
forourcustomerscomparedtoourcompetitors
Catalystcostisgenerallyrelativelysmall
contributiontototalcost
Seektosharevalue

Improvedcatalystprice
Licence fees
Technologytransferfees
Services

SimplifiedCustomerProductionCostModelforTerephthalic Acid
RawMaterials

$/tonne

Paraxylene

725

AceticAcid

15

Catalyst

Utilities

15

FixedCosts

25

TotalCashCost

785

DepreciationandROCE

115

CostofProduction

900

SalesPrice
Margin

1,000
100$/tonne

37

AddingValueThroughTechnology KeyTakeaways
+

Talentedand
enthusiasticstaff
continuetobeatcore
ofoursuccess

Investingforgrowth
infacilitiesinEurope,
USAandAsia

Uniquetechnology
capabilityprovides
confidenceinability
tomaintainstrong
positionsinexisting
marketsandto
establishnewbusiness
areaswithstrong
growthprospects

Focusonprotection of
knowledgetosustain
thegrowth

38

PTandtheChemicalsMarket
IainMartin
TechnologyDirector,ProcessTechnologies

ChemicalsDrivers
GlobalDrivers

Population
Growth
Urbanisation
IncreasingWealth

Natural
Resource
Constraints

Health
&Nutrition
Ageing
Population

Environmental
Factors
ClimateChange
Regulation

ChemicalsDrivers
PetrochemicalDemandGrowth
Growthinprimarypetrochemicalandderivative
demand,regionalandproductslateshifts
ShaleGas
NewprojectsandgrowthbaseduponUSshalegas,
shiftfromoiltosyngasbasedchemistry

CoalbasedChemicals
Chinesegrowthforchemicalandenergysecurity
RenewableFeedstocks
Consumerdemandforrenewablechemicals,
advantagedfeedstockpositionoveroil,legislationfor
renewablefuels

40

Catalyst

Licensing

JMcoveredtechnology/products/service

PTsChemicalsMarkets
Feedstock
NaturalGas

BuildingBlocks

Intermediates

Ammonia

EndUseProducts
Fertilisers

Syngas

SNG
GTL
Hydrogen

Formaldehyde

Methanol

MonoEthyleneGlycol

Petrochemicals

Coal
Petroleum

NaturalGasLiquids

CleanFuels

VinylChlorideMonomer

Adhesives

Construction
Packaging

Ethylene
Aromatics

PTA

Films,FibresandBottles

Propylene

OxoAlcohols

FilmsandCables

Butane

Butanediol

EngineeringPolymers

Oleo/Bio

Shampoo

BiomassandNaturalOils

NaturalDetergentAlcohols

DetergentsandSoaps

EdibleOilsandOtherOleochemicals

Food

Biorenewables

Biochemicals

41

Methanol
JMOffer
Worldleadingtechnologylicensingandfullrangeofcatalysts
MarketDrivers
CoaltochemicalsinChina
ShalegasbasedopportunitiesintheUS
MethanolMarket
Methanolproductmarket:65mtpademand
Marketdemandgrowth:67%p.a.
Growthincapacitynextfiveyears:5%p.a.

NaturalGas
Reforming

Coke/C2H2
OffGas

Gasified Coal

ChemicalUses

Methanol

FuelsM15

OlefinsMTO

MethanolCatalystMarket
JMshareofsector(installedvalue):#1catalysts
Catalystinstalledmarketvalue:425475m
Replacementcatalystmarket:80120mp.a.
Catalystlifetime: 45years
Competitors(Licensing/Catalysts)
Lurgi /Clariant
Haldor Topse

42

Formaldehyde
JMOffer
Licensing,engineeringandprocurementofformaldehydeplants
andoxidecatalystsforformaldehydemanufacture
MarketDrivers
MarketgenerallygrowsinlinewithGDP
Chinaforecasttoexperiencefastgrowthrates(around7%
p.a.)andsignificantvolumeincreasesindemandduring
2011to2016
Potentialforacceleratedgrowthifwoodsectorcanbetargeted
Increasinguseofformaldehydeinnewchemicalintermediates
FormaldehydeMarket
Formaldehydemarket: 43mtpa,~6bnp.a.
Marketgrowth:5%p.a.
OxideCatalystMarket
JMshareofsector:#1inoxidecatalystmarket(~1/3total)
Replacementcatalystmarketforoxide:43mp.a.

Wood
Products

Methanol

Resins

Polyols

WorldConsumptionofFormaldehyde

Wood
Products

58%
Competitors
DBWestern(processlicensingonly)
Alder(catalystandprocesslicensing)
Clariant (catalystonly)

Formaldehyde

Non
wood
Products

42%

Others15%
PolyacetalResins8%
MFResins6%
MDI4%
Pentaerythritol5%
BDO4%

43

GastoLiquids
JMOffer
1. Licensing:fixedbedFischerTropsch processandreactor
licensingwithBP
2. Catalysts:syngasandFischerTropsch catalysts

Lubricants
ShaleGas
Reforming

MarketDrivers
SpreadofoilvsNGpriceandaccesstolargeamountsoflowcost
naturalgas(Qatar,Australia,Russia)
ShalegasinNorthAmericamajordriver
Competitivedynamicsvsothershalegasuses
GTLProductMarket
GTLmarket:200,000bbl perday,~$9bnp.a.
OryxandShellPearl,Qatar
Growth: Expectcapacitytodoubleto400,000bblperdayby2020

Gasified Coal
/Biomass

FixedBed
(orslurry)
FTProcess

LowSulphur
Diesel

Hydrocarbon
Blending

CrudeOil

NaturalGas

$/bbl

$/mmBtu

160

14

140

12

120

10

100

80

60
40

20

0
Nov07

0
Mar09

Jul10

Nov11

Mar13

Source:EIA

44

LowPressureOxoAlcohols
2Ethylhexanol

JMOffer
Licensedprocesswithcatalysts
Developed,comarketedandlicensedwithDowChemicalCompany
for>40years
52licencessold
MarketDrivers
Marketdrivetowardshighmolecularweightplasticiseralcohols:
developmentofa2PHvarianttoconvertC4streamsfromMTO
projects

Propylene

PVC
nButanol

Syngas

Coatings
iButanol

Butene

Solvents
2Propylheptanol

Market
JM/Dowshareofsector: #1
Licensingmarket: Typicallyoneplantperyear
Hydrogenationcatalystreplacementmarket: >10mp.a.
Typicalplantsize: 200300ktpa
Competitors
MCC
Oxea
Eastman

45

MonoEthyleneGlycol(MEG)
JMOffer
NovelprocessdevelopedinpartnershipwithEastmanChemical
Company andnowavailableforlicensing
MarketDrivers
Chinaproductiondeficit,imports~7milliontonnesp.a.
HighcostoftraditionaloilbasedandMTOroutesviaethyleneoxide
JMDavy/Eastmanrouteofferslowercostprocess
Opportunitytomeetmarketneedsbasedoncoalornatural
gasderivedsyngasandmethanol

Polyester
FibreandPET

Methanol
MEG
Syngas

Coolant,
Antifreeze

MEGMarket
Totalmarket:~22bnp.a.,24.5mtpa
Growth:56%p.a.(89%p.a.China)
Newcapacity201315:~4mtpa
Typicalplantcapacity:200500ktpa
JMshareofsector:New
Licensingmarketsize:+12milliontonnesby2020
Competitors
Sabic,ShellandDowforethylenetoMEGrouteviaethyleneoxide
ChinatechnologyprovidersforsyngastoMEGrouteviadimethyl
oxalate(DMO)
UbeforsyngasroutetoMEGviaDMO
46

OpportunitiesinBiorenewables
JMOffer
Catalystsandlicensedprocessesfortheemergingbiofuelsand
biochemicals markets
Fermentation

MarketDrivers
Biofuels:climatechangeregulationsand energysecurity
Biochemicals:consumerdemandforgreen,sustainable
materials,andadvantagedeconomicsfromlowcostsugar

Cellulose
PalmOil
Sugar/Starch

Conversion
andUpgrade
Catalytic
Processes

JMPosition:
>1mtpaofproductsalreadymanufacturedusingJMprocesses
Involvedincollaborationswithanumberofkeybioprocess
technologydevelopers
Catalyst
Processtechnologyscaleupandcommercialisation

47

ProcessTechnologiesinChina
HenryLiu
CountryDirector,China

PTinChina Overview
PTSalestoChina(2012/13119m)

FirstofficeinChinain2001
~120employeesandgrowing
AllareasofPTnowoperatinginChina
ForecasteddoubledigitCAGRovernext
tenyears
OfficesinBeijingandShanghai
JVinQingdaoforcatalystmanufacturing
58licences grantedinChina
22 forcoaltochemicalswithleadingshareofsector

Syngas
48%
OilandGas
5%
Oleo/Bio
5%

Chemicals
OilandGas

Petrochemicals
42%

EmployeesDoubledinThreeYears
150
125
100
75
50
25
0
2010/11

2013/14

49

ChineseMarketDrivers
KeyDrivers
Economicgrowth

ChinaChemicalTradeBalance
(bn)

GDP~7%overnextfewyears

ChemicalImport

Chemicaldemandgrowthnormally2xGDP

ChemicalExport

Energysecurity
Chinaimports>50%ofitsoildemand
Governmentlookingtoreduceimportdeficit

Environmentprotection
Airpollutionrecognisedasamajorissueincities

Feedstockavailability

136

Richcoalresources

104

PolicyandRegulation
59

Chinesegovernmentencouragingcoaltochemicals
SupportedintheChinaChemical12th FiveYearPlan
Provencompetitivechemicalroute

Chinesegovernmentplantoreducedirectuse
ofcoalforpowergeneration

40
20

10.4

2000

2006

2012

Source:ChinaPetroleumandChemicalIndustryFederation

50

CoaltoChemicals
Coalisanappealingandavailablechemicalfeedstock
Chinahas13%oftheglobalcoalreserves
CoaltoSNG

CoaltoMethanol

CoaltoEthyleneGlycol

CoaltoOlefins

Capacity
(billionm3)

Capacity
(milliontonnes)

Capacity
(milliontonnes)

Capacity
(milliontonnes)

+9%

+39%

+35%

+46%
15

79

80
60
38
4

22.6

2011

2015E

5.1

0.2
2020E

2011

2015E

2020E

2011

1.9

2.9

2015E

2020E

0.6
2011

2015E

2020E

Source:ChinaPetroleumandChemicalAssociationandJMestimates

Asaresultofmultipleinvestmentsandoperationalimprovement,
technologicalmaturityofemergingcoaltochemicalsisadvancingfast
51

CoaltoChemicalsFlowsheet

Ammonia

Fertilisers

Coaltochemicalsisgrowing1520%CAGR
SNG

ChinaCoalConsumptionbySector
(mtpa)

Hydrogen

CAGR
~5.3%
4,640
~6%

Others

~7%

Chemicals

~14%

Cement

3%

Clean
Fuels

GTL

Coal
Methanol

1520%

3,778
9%

23%

5%
15%

~16%

17%
~57%

Steel

Power
Generation

PE,PP

OxoAlcohols

Filmsand
Cables

Formaldehyde

Adhesives

MEG

Packaging

34%

67%

54%
2011

MTO

2015E

Source:CCBInternational2012,CCTD,SXCoal,A.T.Kearneyanalysis

JMcovered
technology/
products/service

VCM

52

SubstituteNaturalGas
MarketDrivers
Energysecurityandurbanairquality
CoaltogasplaydrivenbyChina:Gasdemandwillbemet
bymixofdomestic,imported,shale,LNGandSNG

Gasified
Coal

SNG

Gasfor
Energy

SNGMarketGrowth

SNGmarket(2020): ~80bnNm3 p.a.


Market:~20bnin2020at7/mmbtu
1plantoperating
9projectswithfullapproval(~23bnNm3p.a.)
13projectswithpreliminaryapproval(~54bnNm3 p.a.)

53

SubstituteNaturalGas
JMOffer
Licensedtechnology,engineeringservicesand
catalystsupply

Gasified
Coal

7plantslicensedbyJMDavy firstplantstartedup
summer2012
Totallicence feesandcatalysts~50minnexttwoyears

Gasfor
Energy

SNG

Bn Nm3p.a.

MarketSize

JMProjects

JMshareofsector: #1inSNGsector
Newplants(licences andfirstcatalystfill):300m400m
betweennowand2020
Replacementcatalystmarket: ~50m100mp.a.when
plantsarerunning

Datang (startedup)

1.33

Datang Fuxin1

1.33

Highlydependentonhowtheplantswillberun

Verylargecatalystvolumesrequired

Competitors
Haldor Topse
Lurgi
Local

Xinwen yili

Datang Keshiketeng 2

1.33

Datang Fuxin2

1.33

Datang Keshiketeng 3

1.33

Suxin

1.33

54

TheJMAdvantageinChina
FocusedondefensibleandprofitablelongtermgrowthinChina

+
Customers

TechnologiesandProducts

ResourcesandCapabilities

Establishedstrongrelationships
withcoaltochemicalscustomers
inChina
Leading positionsinkey
technologies
CustomersinChinawantthebest
technology

JMDavyisastrongbrandin
theindustry
Provenprocesstechnologies
Leadingcatalystsandprocess
technologiesdesignedtomeet
Chinesemarketneeds

Continuouslyaddingbestinclass
peopleinourofficesinChina
Buildingtechnicalcapabilities
Planningaheadformanufacturing
capacityrequirements

55

PTandtheChemicalsMarket KeyTakeaways

Strongpositionin
ourtargetmarkets

Expandingportfolio
throughR&D
investmentand
throughleveraging
catalystandprocess
technologyexpertise

Verygoodvisibilityon
capex tosupport
growth

Attractiveopportunities
innewfeedstocks
(shale,coaltochemicals)

56

PTandtheOilandGasMarket
DonRoche
Director,OilandGas

PTinOilandGas
Threemainsectors

Oil

Refineries
GasProcessing
DiagnosticServices

Refineries
Gas
Processing

21%

Gas

12% 23%

OilandGasSales

29%

Opportunitiesforgrowth

Refineries
Refinery
Additives

Hydrogen

Diagnostic
Services

Keystrengths
Advancedmaterialsexpertise
Abilitytointegratecatalyst,
processandprovideservices
Matchingcatalysttochanging
plantconditions
Uniquemeasurementand
chemistrycapability

Subsea
Instrumentation

Diagnostic
Services

H
50%

57% 6% 10+%
58

PTsOilandGasMarkets
JMhasstrongpositionsintargetedhighvaluemarkets
Refineries
Hydrogen

Leadingpositioninreforming,shiftandpurificationcatalysts
forhydrogenmanufacture

Refineries
Additives

UniqueproductofferinginFCCadditivesanddosingsystems
forimprovingefficiencyandenvironmentalperformanceof
FCCunits

Gas
Strongpositioninmarketforremovalofsulphurand
Processing mercuryfromgasstreamstoverylowlevels
Diagnostic Highvalue,specialistofferingsacrossthewholeoil
andgasvaluechain
Services

OpportunitiestoapplyPTsskillsincurrentandadditionalareasofoilandgasmarket:
Byinnovationandleveragingcorecompetencesinadvancedmaterials
Bypartneringandacquisition
59

Refineries HydrogenCatalysts
JMOffer
Hydrogencatalyststoindustrialgasproducers,refinersand
chemicalplants
MarketDrivers
Hydrogendemanddrivenbyincreaseddieselproduction,
sulphurtreatmentinfuelsandhydrogenforchemicals

NaturalGas
Reforming
OffGases,Liquid
(Naphtha,LPG)
Reforming

HydrogenPlant

Refinery
Hydrogen/
IndustrialGas
Chemicals
Plants

HydrogenCatalystMarket
JMshareofsector:#1
Marketgrowth: 6%p.a.
TypicalPlant
Firstfillandreplacementcatalystcharge:12mevery45years
Competitors
Clariant
Haldor Topse
ImagecourtesyofAirProductsandChemicalsInc.

KeepingAheadofCompetitors
CatalystR&Dandprocessimprovementstoreduce
operatingcostsandcapex forourcustomers
Partneringwithindustrialgassupplierstoaccess
outsourcemarket
60

Refineries FCCAdditives
JMOffer
FluidisedbedcatalystadditiveswithloadingequipmentforFCC
applications
Providesenvironmentalcontrolandperformanceproducts
MarketDrivers
Gasolinedemandinemergingmarkets
EnvironmentalregulationsonSOx andNOx andtheneed
forchemicalsfromFCCunits

Hydroprocessing
Oil

Refinery
Distillation

Olefins
Diesel

FluidCatalytic
Cracking(FCC)

Gasoline

RefineryAdditivesMarket
JMshareofsector:
Environmentaladditivemarket(#1)
Performanceadditivemarket(#3)
Marketgrowth: 57%
TypicalSale
Annualcatalystadditivesale/plant:~0.5m
Competitors
Grace
Albemarle
BASF

KeepingAheadofCompetitors
SuperiorR&Dwithadvancedmaterialscombinedwith
processtechnologyimprovements
OpportunitiesforAcceleratedGrowth
Applyadvancedmaterialsexpertisetodevelophigher
valueproducts
Leveragetechnologystrengthstoaccessnewmarketsacross
wholeofPT
61

BuildingCapabilitiesAcrossPT

++

Oil&Gas

Chemicals

Fluidisedbedcatalystandprocessskills

Fixedbedcatalystandprocessskills

Zeolitecatalysts

Basemetalandpgm catalysts
Catalystmanufacturingexcellence
Catalystresearchandscaleup

Buildingcapabilities
62

AcceleratingGrowth
OilandGasdrivers

Technology/competences

Petrochemicaldemandchanges
impactrefining

Catalystdevelopmentand
manufacturing

Feedstockchangesinrefining
andchemicals

AdvancedmaterialscienceR&D

Shalegasandoil

Processtechnologydevelopment
andimprovements

Emission,energy andproduct
regulations

Measurementandanalyticalskills

Organicgrowth,
targeted
acquisitions

Accelerated
growth
63

PTandtheOilandGasMarket KeyTakeaways

++

Leadingpositions
intargetmarkets
acrossthe
valuechain

Strongtechnology
skillssupportedby
R&Dinvestment

Buildingsynergies
acrossPTto
strengthenour
capabilities

Attractiveopportunities
forgrowthboth
organicallyandby
acquisition

64

Summary
GeoffOtterman
DivisionDirector,ProcessTechnologies

KeyTakeaways

Strongpositioninall
ourmarkets

Abletoleverageboth
catalystandprocess
technology

Technologyand
knowhowinvestment

Globaldriverssupport
increasingdemandfor
PTsofferings

Stablemargins

Doubledigitgrowth
onaverageforthe
foreseeablefuture

66

ClosingRemarks
NeilCarson
ChiefExecutive

Summary

Aworldleading
technologycompany

Successfoundedon
continuedinvestmentin
R&Dandproduct
development

Differentiation
throughtechnology

Provenstrategyin
placetodevelopnew
businessareas

Wellpositionedin
growthmarkets

Deliversvalue

68

JMExecutiveBoard

NeilCarson

RobertMacLeod

ChiefExecutive

GroupFinanceDirector

LarryPentz
ExecutiveDirector

JohnWalker
ExecutiveDirector
EmissionControlTechnologies

70

PresentationTeam

GeoffOtterman

IainMartin

DivisionDirector
ProcessTechnologies

TechnologyDirector
ProcessTechnologies

HenryLiu

DonRoche

CountryDirector
China

Director
Oil andGas

71

OtherSeniorManagement

PaulArmitage
ManagingDirector
Syngas

AntoineBordet
ManagingDirector
JohnsonMattheyDavyTechnologies

DrJaneButcher
GeneralManager
ChemicalCatalysts

DrAndrewHeavers
BusinessDevelopmentDirector

AndyHurst
ManagingDirector
Tracerco

MohammedKhan
GeneralManager
Purification

GraemeMcGregor
ManagingDirector
Refineries

SimonSlattery
DivisionFinanceDirector

JoeStevenson
BusinessDevelopmentDirector

DrSallyJones
Director
InvestorRelations

KatharineBurrow
InvestorRelationsAnalyst

72

Glossary
2PH
2Propylheptanol
APIgravity Measureofhowheavy/lightapetroleum
liquidiscomparedtowater
bbl
Oilbarrel,aunitofvolume
Ethylene
C2H4
CAGR
Compoundannualgrowthrate
DMO
Dimethyloxalate
FCC
Fluidcatalyticcracking
FT
FischerTropsch
GTL
GastoLiquids
IP
Intellectualproperty
JM
JohnsonMatthey
JV
Jointventure
ktpa
Kilotonnesperannum
LNG
Liquefiednaturalgas
LPG
Liquefiedpetroleumgas
MEG
Monoethyleneglycol
mmBtu
MillionBritishThermalUnits
MTO
Methanoltoolefins
mtpa
Milliontonnesperannum

NG
NGL
Nm3
NOx
p.a.
PE
PET
Pgm
PP
PT
PTA
PVC
R&D
ROCE
ROIC
SNG
SOx
Syngas
VCM

Naturalgas
Naturalgasliquids
Normalcubicmetre(volumeofgasunder
standardconditionsof0oCand1atmpressure
Nitrogenoxides
Perannum
Polyethylene
Polyethyleneterephthalate
Platinumgroupmetal
Polypropylene
ProcessTechnologies
Purifiedterephthalic acid
Polyvinylchloride
Researchanddevelopment
Returnoncapitalemployed
Returnoninvestedcapital
Substitutenaturalgas
Oxidesofsulphur
Amixtureofhydrogenandcarbonoxides
Vinylchloridemonomer
73