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IRPCs Polypropylene

Expand On Consumer Needs

February 17, 2015


Prepared by

Mr. Jaturong Worawitsurawatthana


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

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


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Propylene

Polypropylene

Food Packaging & Disposables

Propylene
CH3-CH = CH2

Agricultural and Industrial Packaging

Polypropylene
Automotive

Homo

Block copo

Random copo
Appliances
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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
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World Polypropylene Supply & Demand

Source: IHS, 2015


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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

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Polypropylene Capacity and Demand Direction

Chinese Plant Expansion


(Cost competitiveness
from CTP MTP Technology)

Source: IHS, 2015


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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


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Polypropylene is the Largest Share of


Total Polymers Demand

Source: IHS Forum, June 2014


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World Polypropylene Demand by Region

%AAGR
2014-19

3%

4%

Source: IHS, 2015

1%

3%

4%

6%

5%

8%

6%

5%

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Matrix of Polypropylene Consumption


Opportunity

Maintain

Source: IHS, 2015 and IRPC Analysis

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World Polypropylene Demand by Application

+27%

Market Size Y2014


59 Million Tons

Market Size Y2019


75 Million Tons
Source: IHS, 2015

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Polymers play a critical role in all economies

Source: IHS Forum, June 2014


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Economic Impact to Demand and Price


E&E, Autopart, Construction,
Luxurious goods

Food packaging

Situation

Economic
Upturn

Economic
Downturn

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Polymer Price and Demand Cycle

(2010)
Source: World Outlook of the petrochemical industry by Mitsubishi Corporation, 2011
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Outline
Polypropylene Market Outlook
IRPC Polypropylene
Business Development
Key Drivers & Its
Opportunity
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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
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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
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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
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IRPC PP Compounding Project


Outline Process

Compounding
House

Inline Process

Compounding
House

Cost Saving

Packing & Logistic


2nd Extruder Production

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Outline
Polypropylene Market Outlook
IRPC Polypropylene
Business Development
Key Drivers & Its
Opportunity
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Value Creation Through Supply Chain

Source : PTIT as of 2014

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Global Trend : World Business Opportunities


CLIMATE CHANGE

POPULATION

ECONOMIC

GLOBAL FLOW

NATURAL RESOURCES

EDUCATION

HEALTH

TECHNOLOGY
SECURITY

DEVELOPMENT & POVERTY

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Opportunities for Polypropylene


Packaging & Printing

Nonwovens & Yarn


Global production
Global purchasing
Investment shift to ASEAN

Electronic & Electrical

Automotive

Compounding
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PACKAGING
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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


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World Rigid Plastic Packaging Consumption


by Material

KTA

Source: Rigid Packaging Solutions by Farmamak, 2013


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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

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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
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NONWOVENS & YARN


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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
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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


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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)
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High Birth Rate and Longer Living Drive Demand


Age

Growing Old

Source: Mitsubishi Corporation, 2013

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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
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ELECTRONIC - ELECTRICAL
& APPLIANCES
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Source: Plastics Foresight

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EE & Appliances Market Outlook


Source: Mitsubishi Corporation and
Journal of Cleaner Production, 2014

Thailand
Total Production of Plastic Conversion
Plastics component
average weight
about 7 kg/unit

Million Baht: 572,372


Ktons Volume: 4,679

Plastics component
average weight
about 8 kg/unit

EE & Appliances
Million Baht: 118,240 (20.7%)
Ktons: 739 (15.8%)

Source: PTIT Data, Modified by PITH, 2014

Plastics component
average weight
about 3 kg/unit
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EE & Appliances Key Drivers and Trends

Functionality
Easy to use and
connected
Aesthetics and Design
Energy efficiency

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AUTOMOTIVE
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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
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Automotive Market Outlook


Source: Mitsubishi Corporation

Thailand
Total Production of Plastic Conversion

Million Baht: 572,372


Ktons Volume: 4,679
Automobile

Vehicles
Million Baht: 81,638 (14.3%)
Ktons: 363 (7.7%)

Source: PTIT Data, Modified by PITH, 2014


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Signicant Transition in the Region

Source: Ernst &Youngs Global Automotive Center


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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

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COMPOUNDING
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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


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PP Categories/ Stiffness vs. Other Polymers

Source: TASNEE (Saudi Arabia), 2nd GPCA, Plastics Summit


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Global Demand of Polypropylene Compound

Largest sector
with 55%

Source: TASNEE (Saudi Arabia), 2nd GPCA, Plastics Summit


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Major Global PP Compound Producers

Source: TASNEE (Saudi Arabia), 2nd GPCA, Plastics Summit


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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

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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.

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