Polypropylne Expand On Consumer Needs

IRPCs Polypropylene
Expand On Consumer Needs
February 17, 2015

Prepared by
Mr. Jaturong Worawitsurawatthana

Vice President, Petrochemical Business
IRPC Public Company Limited
Copyright @ Petrochemical Business, IRPC Public Company Limited
Outline
Polypropylene Market Outlook
IRPC Polypropylene
Business Development
Key Drivers & Its
Opportunity
Outline
IRPC Polypropylene
Key Drivers & Its
Opportunity
Principle of Petrochemical Manufacturing

Break it down and re-fabricate at molecular level
Micro molecule
Macromolecule
(Carbon 1~250)
Mixed Hydrocarbon
(Saturated)
Coal
Oil
Natural Gas
Ultra-large molecule
(Carbon 20K-1M)
Polymer
(Saturated)
(Carbon 1~8)
Monomer
(Unsaturated)
Disintegration
Methane
Polyethylene
Ethylene
Polypropylene
Propylene
Reconstitution
Butenes, -diene
Polyvinylchloride
Polystyrene
Polyester
Heat, Catalyst Benzene
Catalyst
(Cracking,
Toluene
Reforming)
Xylenes
(Polymerization) Polyamide
Polycarbonate
Etc.
Biomass
Bio-based feed
Bioplastics;
PBS, PLA, Etc.
To do all of these, investment and technology are the keys

Propylene
Polypropylene
Food Packaging & Disposables
Propylene
CH3-CH = CH2
Agricultural and Industrial Packaging
Polypropylene
Automotive
Homo
Block copo
Random copo
Appliances
World Propylene Demand is Dominated

by Polypropylene Production
+26%
Propylene Market Size Y2014

89 Million Tons
Propylene Market Size Y2019

112 Million Tons
Note: Others means Cumene (phenol and acetone chain), 2-Ethylhexanol, Butanols, Isopropanol, and Other
Source : IHS, 2015
World Polypropylene Supply & Demand
Source: IHS, 2015

Regional Polypropylene Net Trade Patterns

C. Europe
CIS & Baltics
W. Europe
Middle East
NE Asia
N. America
Indian Subc.
SE Asia & Oceania
Africa
S. America
Asia is Net Import Polypropylene.

Remark: (+) Net Export and (-) Net Import
Source: IHS, 2015 and IRPC Analysis
Polypropylene Capacity and Demand Direction
Chinese Plant Expansion

(Cost competitiveness
from CTP MTP Technology)
Source: IHS, 2015

IRPC Polypropylene Capacity Share

Year
IRPC Nameplate
Capacity
2014
475 KTA
2019
Southeast
Asia
World
Thailand
69,123 KTA
5,344 KTA
1,970 KTA
87,320 KTA
5,814 KTA
2,270 KTA
775 KTA
Source: IHS, Market Survey, Mitsubishi Corporation

10
Polypropylene is the Largest Share of

Total Polymers Demand
Source: IHS Forum, June 2014

11
World Polypropylene Demand by Region
%AAGR
2014-19
3%
4%
Source: IHS, 2015
1%
3%
4%
6%
5%
8%
6%
5%
12
Matrix of Polypropylene Consumption

Opportunity
Maintain
Source: IHS, 2015 and IRPC Analysis
13
World Polypropylene Demand by Application
+27%
Market Size Y2014

59 Million Tons
Market Size Y2019

75 Million Tons
Source: IHS, 2015
14
Polymers play a critical role in all economies
Source: IHS Forum, June 2014

15
Economic Impact to Demand and Price

E&E, Autopart, Construction,
Luxurious goods
Food packaging
Situation
Economic
Upturn
Economic
Downturn
16
Polymer Price and Demand Cycle
(2010)
Source: World Outlook of the petrochemical industry by Mitsubishi Corporation, 2011
17
Outline
IRPC Polypropylene
Key Drivers & Its
Opportunity
18
Value Added Products from UHV Project

$912/MT
LPG
$440/MT
Naphtha
$407/MT
UHV
320 KTA
> $1,050/MT
Gasoline
$57/BBL
($428/MT)
Petrochemical Business
120 KTA
Diesel
Fuel Oil
280 KTA
$42-45/BBL
($315-340/MT)
Increasing Crude Run
FUEL OIL COMPONENT/

CARBON BLACK
FEEDSTOCK
Variety Properties & Flexible

Crude Type
More Value Added Products
200 KTA
*Production Capacity
19
IRPC Overall Process

REFINERY
PETROCHEMICAL
INTERMEDIATE
UPSTREAM
TRANSPORTATION
CRUDE OIL
CONDENSATE
REFINERY PLANT
Y1996
ADU 1
65,000 BPD
DOWNSTREAM
FUEL, LPG
CUSTOMER
TOLUENE
ACN
MIX-XYLENE
HA (A9,A10+)
REFORMATE
1997
BENZENE
TOLUENE XYLENE
PYROLYSIS
GASOLINE
RAFFINATE
1997
ETHYLBENZENE
STYRENE MONO
BZ
SM
ETHYLENE
BUTADIENE
1997
ETHYLENE
CRACKER
(AR)
1986
HDPE
1997
DEEP CATALYTIC
CRACKING
VACUUM GAS OIL (VGO)

Y2000
ADU 2
LONG RESIDUE
150,000 BPD
1997
1990
ABS/CCM
ETHYLENE
ETHYLENE
RICH GAS
LS ATB
1997
PS
1992
EPS
ACN
NAPHTHA
1993
SAN
PROPYLENE
LUBE BASE OIL
LUBE BASE OIL
ACETYLENE
FUEL OIL
BITUMINUS
1990
PP
2003
ACB
1994
POWER PLANT
ASPHALT
20
Shifting of Product Portfolio toward Variety and

Premium Product serving Mega Trend
Polypropylene Expansion +160 KTA
Compounding +140 KTA
Compound
Increase Volume : Economy of Scale

Increase Value Added Products
21
IRPC PP Compounding Project

Outline Process
Compounding
House
Inline Process
Compounding
House
Cost Saving
Packing & Logistic

2nd Extruder Production
22
Outline
IRPC Polypropylene
Key Drivers & Its
Opportunity
23
Value Creation Through Supply Chain
Source : PTIT as of 2014
24
Global Trend : World Business Opportunities

CLIMATE CHANGE
POPULATION
ECONOMIC
GLOBAL FLOW
NATURAL RESOURCES
EDUCATION
HEALTH
TECHNOLOGY
SECURITY
DEVELOPMENT & POVERTY
25
Opportunities for Polypropylene

Packaging & Printing
Nonwovens & Yarn

Global production
Global purchasing
Investment shift to ASEAN
Electronic & Electrical
Automotive
Compounding
26
PACKAGING
27
Packaging Market Outlook
Total Production of Plastic Conversion
Million Baht: 572,372

Ktons Volume: 4,679
Paper
38%
Other
6%
Thailand
Glass
6%
Metal
16%
Plastic Packaging
Million Baht: 187,079 (32.7%)
Ktons: 2,219 (47.4%)
Flexible
Plastic
13%
Rigid
Plastic
21%
Total Plastic 34%

Global Packaging
Consumption
Source: PIRA International, 2009
Source: PTIT Data, Modified by PITH, 2014

28
World Rigid Plastic Packaging Consumption

by Material
KTA
Source: Rigid Packaging Solutions by Farmamak, 2013

29
Polypropylene in Packaging
Bag
PE, PP, PET,
PVC, Nylon
Bottle/Cap
PE, PP, PS, PET,
PVC
Container/Closure
PE, PP, PS, SAN,
PET, PVC
Cup/Lid
PP, PS
Tray
PE, PP, PS, PVC,
PET
Film
PE, PP, PVC
Box/Pallet/Drum
PE, PP, PET
Blister/Skin
PE, PVC, Ionomer
Sack/Yarn
PP
Foam
PS, EPS, PP
30
Packaging Key Drivers and Trends

Multilayer packaging
Plastic pouches
Flexible packaging
Microwaveable packaging
Frozen / Chilled ready meal
Convenient closures
No Carcinogen in baby bottle
and food containers
31
NONWOVENS & YARN

32
Polypropylene Nonwovens Market
PP 30%
Hygiene
35%
Increase
to 40%
by 2015
Other
70%
Industry
35%
Hygiene
65%
Industry
65%
Polyester
Rayon
Wood
The Global Nonwovens Market is over $20 Billion by 2011

and US$30.61 Billion by 2020
Source: Edison Investment Research and Pira International
33
World Nonwovens Demand

Millions MT
2005
2010
2015F
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
North
America
Western
Europe
Asia Pacific
Central &
South
America
Eastern
Europe
Africa/Middle
East
Source: The Freedonia Group

34
Worldwide Nonwovens Production

Millions MT
2006
2011
2016F
3.0
2.5
2.0
1.5
1.0
0.5
0.0
NAFTA
Europe
China
Other Asia
Pacific
Japan
Middle
East
Rest of
World
Source: INDA Estimates & Rory Holmes, INDA-CAB Conference 2012 (www.inda.org)
35
High Birth Rate and Longer Living Drive Demand

Age
Growing Old
Source: Mitsubishi Corporation, 2013
36
Nonwovens & Yarn Key Drivers and Trends

PP Nonwoven growth in
hygiene market.
Industrial and agricultural
sectors growth in developing
countries.
Consumption increasing in
Asia-Pacific, Latin American
and other emerging markets.
Older traditional products
substitution and consumer
behavior change
37
ELECTRONIC - ELECTRICAL
& APPLIANCES
38
Source: Plastics Foresight
39
EE & Appliances Market Outlook

Source: Mitsubishi Corporation and
Journal of Cleaner Production, 2014
Thailand
Plastics component
average weight
about 7 kg/unit

Ktons Volume: 4,679
Plastics component
average weight
about 8 kg/unit
EE & Appliances
Million Baht: 118,240 (20.7%)
Ktons: 739 (15.8%)
Plastics component
average weight
about 3 kg/unit
40
EE & Appliances Key Drivers and Trends
Functionality
Easy to use and
connected
Aesthetics and Design
Energy efficiency
41
AUTOMOTIVE
42
Polypropylene in Automobile
Fuel systems
PE, POM, PA, PP
7 kg
Dashboard
PP, ABS, PA, PC, PE
15 kg
Exterior trim
ABS, PA, PBT, PA, PVC
4 kg
Under the bonnet

components
PA, PP, PBT
9 kg
Other reservoirs
PP, PE, PA
1 kg
Upholstery
PVC, PUR, PP, PE
8 kg
Electrical components
PP, PE, PBT, PA, PVC
7 kg
Bumpers
PP, ABS, PC
10 kg
Body (inc. body panels)

PP, PPE, UP
6 kg
Interior trim
PP, ABS, PET, POM, PVC
20 kg
Lighting
Seats
PP, PC, ABS, PMMA, UP
PUR, PP, PVC, ABS, PA
5 kg
13 kg
About 105 kg of petrochemical-derived plastics

Source: Association of Plastics Manufacturers in Europe
43
Automotive Market Outlook

Source: Mitsubishi Corporation
Thailand

Ktons Volume: 4,679
Automobile
Vehicles
Million Baht: 81,638 (14.3%)
Ktons: 363 (7.7%)

44
Signicant Transition in the Region
Source: Ernst &Youngs Global Automotive Center

45
Automotive Key Drivers and Trends

High growth of automotive
production in Asia
Further growth of PP demand
in China and Southeast Asia
Low cost / Light weight PP
supports city car production
Developing bio-plastic based
on PP of Japanese car maker
46
COMPOUNDING
47
Where is Used Compounded Plastics?

Industries Served:
Construction
Auto
Wire and Cable
Durables
Consumer Products
Industrial Applications
Aerospace
Electrical & Electronics
Health Care
Replacing:
Metals
Wood
Natural Rubber
Expensive Engineered Plastics
Note: TPO, Thermoplastic Polyolefin

TPV, Thermoplastic Vulcanizates
Add concentrate ex: Carbon black, Pigment, Masterbatch
Source: TASNEE (Saudi Arabia), 2nd GPCA, Plastics Summit

48
PP Categories/ Stiffness vs. Other Polymers

49
Global Demand of Polypropylene Compound
Largest sector
with 55%

50
Major Global PP Compound Producers

51
Strategic Initiatives: Roadmap to Success

2015: UHV Completion
2013
Crude Run 181 KBD 84%
Nelson Complexity Index 6.6
Portfolio of Revenue:
Petroleum/Petrochemical & Others 76% / 24%
Crude Run 215 KBD 100%

Nelson Complexity Index 8.6
More stable portfolio of Revenue:
Petroleum/Petrochemical & Others 59% / 41%
Super Absorbent
Polymer
Acrylic Acid (SAP)
Para-Xylene (AA)
(PX)
2017
3
2
2015
2014
STS 2014:
Strengthening
Core Business
New investments through JV

Specialty focus and Moving
away from heavy-asset
company
PP Derivatives
PP Expansion
PP Compounding
160 KTA
140 KTA
Quick Win Initiatives

DELTA Initiative Implementation
Assets Management (Bankai/EIZ)
2013
Completed Project during 2011-13
CHP I: Electricity +220MW, Steam +420T/hr

PRP +100KTA of Propylene
EURO IV: Gasoline 15KBD, Diesel 10KBD, Jet 15KBD
TDAE +28KTA, 150BS +25KTA
Lube Blending +60m.Ltrs./year
EBSM +60KTA, ABS/SAN +60KTA
52
Question
THANK YOU
The presentation is presented in good faith and is based on current situations and assumptions. Known and
unknown risks, uncertainties and other factors could lead to material differences from this presentation.
We encourage you to have your own consideration when making decision at your own risk.
IRPC Public Company Limited assumes no liability to update or to conform them to future events or developments.
53

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Polypropylne Expand On Consumer Needs

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IRPCs Polypropylene

Expand On Consumer Needs

February 17, 2015

Mr. Jaturong Worawitsurawatthana

Principle of Petrochemical Manufacturing

Heat, Catalyst Benzene

To do all of these, investment and technology are the keys

Food Packaging & Disposables

Agricultural and Industrial Packaging

World Propylene Demand is Dominated

Propylene Market Size Y2014

Propylene Market Size Y2019

World Polypropylene Supply & Demand

Source: IHS, 2015

Regional Polypropylene Net Trade Patterns

CIS & Baltics

SE Asia & Oceania

Asia is Net Import Polypropylene.

Source: IHS, 2015 and IRPC Analysis

Copyright @ Petrochemical Business, IRPC Public Company Limited

Polypropylene Capacity and Demand Direction

Chinese Plant Expansion

Source: IHS, 2015

IRPC Polypropylene Capacity Share

Source: IHS, Market Survey, Mitsubishi Corporation

Polypropylene is the Largest Share of

Source: IHS Forum, June 2014

World Polypropylene Demand by Region

Source: IHS, 2015

Copyright @ Petrochemical Business, IRPC Public Company Limited

Matrix of Polypropylene Consumption

Source: IHS, 2015 and IRPC Analysis

Copyright @ Petrochemical Business, IRPC Public Company Limited

World Polypropylene Demand by Application

Market Size Y2014

Market Size Y2019

Copyright @ Petrochemical Business, IRPC Public Company Limited

Polymers play a critical role in all economies

Source: IHS Forum, June 2014

Economic Impact to Demand and Price

Copyright @ Petrochemical Business, IRPC Public Company Limited

Polymer Price and Demand Cycle

Value Added Products from UHV Project

Increasing Crude Run

FUEL OIL COMPONENT/

Variety Properties & Flexible

IRPC Overall Process

VACUUM GAS OIL (VGO)

LUBE BASE OIL

LUBE BASE OIL

Shifting of Product Portfolio toward Variety and

Compounding +140 KTA

Increase Volume : Economy of Scale

IRPC PP Compounding Project

Packing & Logistic

Copyright @ Petrochemical Business, IRPC Public Company Limited

Value Creation Through Supply Chain

Source : PTIT as of 2014

Copyright @ Petrochemical Business, IRPC Public Company Limited

Global Trend : World Business Opportunities

DEVELOPMENT & POVERTY

Copyright @ Petrochemical Business, IRPC Public Company Limited

Opportunities for Polypropylene