CREATING TOMORROW`S SOLUTIONS

WACKER’S STRATEGY & PORTFOLIO FOR RESURGENT INDIA

Andreas Collignon, Wacker Chemie AG
November 2015
WACKER completed a Century of Success in 2014

Plant Burghausen, Germany, 1920

Wacker Chemie AG
 Founded in 1914 by Dr. Alexander
Wacker
 Headquartered in Munich

WACKER Group 2014

 Sales: € 4.83 billion
 EBITDA: € 1.04 billion
 Investments: € 572 million
 Employees: ~16,700

Plant Burghausen, Germany, Today

WACKER’s strategy & portfolio for resurgent India

Andreas Collignon, Wacker Chemie AG; November 2015 1
Our Business Portfolio is a Foundation for Growth

Note: Percentages based on external sales per segment

*) Others

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Andreas Collignon, Wacker Chemie AG; November 2015 2
 WACKER:
Highly HIGHLY-INTEGRATED
integrated OPERATIONS
Supply Chain based BASED
on Five Key ON
Raw Materials
FIVE KEY RAW MATERIALS
Integration
Raw material Upstream Downstream Customers’ industries

Siloxane Silicones Construction

Methanol Automotive suppliers
Paints and coatings
Textiles, print and paper
Silicon Metal Pyrogenic Silica Personal care

Polysilicon Solar wafers, cells and modules

Electronic wafers Semiconductors

Vinylacetate ethylene Engineered fabrics, coatings,

Ethylene adhesives, carpet
(VAE)
Vinylacetate monomer Dispersible Polymer Construction, remodeling,
(VAM) Powders (DPP) insulation

Acetic Acid Polyvinyl acetate

Food, automotive
(PVAc)
Starch/ Therapeutic proteins
Microb. fermentation Food, life sciences, household
Dextrose food ingredients

WACKER’s strategy & portfolio for resurgent India

Andreas Collignon, Wacker Chemie AG; November 2015 3
Solutions & Innovations for diverse industries

 WACKER is a technology leader in the chemical and semiconductor industries.

 We forge ahead with technical innovations and the development of new products

Automotive Construction Energy, Electrics Coatings & Adhesives Consumer Care

& Transport & Electronics Paints & Sealants

Elastomers Paper, Films Renewable Textile, Leather Semiconductor Pharma

& Plastics & NIP Energies & Nonwovens

Food Healthcare Composites Agro Chemical Industrial

Industry Biotechnology

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Andreas Collignon, Wacker Chemie AG; November 2015 4
Technical Centers for excellent Customer Support

WACKER’s global set-up

Focus region Asia
China
Local products and
services
Korea
Focus on products for the
electronic market

South East Asia

Mobile technical center

 25 production sites India

 100 subsidiaries and sales offices worldwide Focus on textile, personal
 21 Technical centers & household care markets
 9 WACKER ACADEMY® branches

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India’s Population rise brings about a growing Middle Class

India is already 3rd largest economy on PPP basis

 India‘s impressive GDP growth of 7.9% for

the last ten years ending 2012-13

 Domestic consumption 55% of GDP

fueling economic growth.

 Increasing Urbanization

 Demographic dividend with young

population

 Middle class growth to over 500 million by

2025

Sources: Goldman Sachs, ICIS

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Andreas Collignon, Wacker Chemie AG; November 2015 6
 Promising Growth Potential for WACKER in India’s key Industries

WACKER portfolio
strength in target
segments

Source: Mckinsey Research

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Well positioned to serve the Indian Markets

Sales, Technical Centers, and Production spread throughout India

Sales in €m CAGR ~20%

Delhi

Dhaka
Kolkata

Mumbai

Sales Office
 Headquarter: Mumbai
Bangalore Technical Center
Production  Region: India, Bangladesh, Nepal,
Chennai Bhutan and Sri Lanka
 Sales in 2014: ~ € 100 million

WACKER’s strategy & portfolio for resurgent India

Andreas Collignon, Wacker Chemie AG; November 2015 8
WACKER METROARK – a Key Pillar in Wacker’s India Entry

Joint Venture – WACKER and Metroark Ltd.

 Built in 1998; over 200 employees in India

 Headquarter in Kolkata, incl. Technical

centers, customer service and sales
offices

 India production of silicones serving local

and Asia region

 Recent investment: silicone elastomers

customization and compounding operation
SILMIX® for Energy Transmission, and
Automotive markets

 Amtala site fulfills WACKER’s global

quality and safety standards

WACKER’s strategy & portfolio for resurgent India

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State-of-the-art Technical Centers in Mumbai and Kolkata

Building localized Competence for highly specialized Chemicals

Technical  State-of-the-art laboratories and high-

service tech equipment

 Providing localized solutions and

developing new applications together
Local with customers
application
developments  Regional competence with regards to
local conditions, like climate and
construction methods

 Training center WACKER ACADEMY in

Innovation Mumbai for sector-specific networking
and transfer of knowledge and expertise

WACKER’s strategy & portfolio for resurgent India

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SILICONES: Increasing demand for its unique Properties in India

SILICONES Characteristics Target markets

Unique Properties, i.a.

Hydrophobic
Building/Renovation Plastics
Flexible
Chemical Industry Textile
Inert electric Insulations
Health & Wellness Paper
Automotive Others
Effects of „Liquids“ Energy/Electronics
“Liquid" silicones are invisible
to the end customer. They are Market Growth Drivers India
characterized either by a surface effect or as
 Higher consumption of consumer goods
process enhancer.
- growing middle class
Properties of „Solids“ - higher sense of well-being
“Solid” silicones can be  Infrastructure developments
identified easily as they cure
 Sustainable performance for saving
to become solid parts for various applications
energy, CO2 and other resources

WACKER’s strategy & portfolio for resurgent India

Andreas Collignon, Wacker Chemie AG; November 2015 11
Secured Energy Supply due to High-Voltage Silicone Insulators

40%
Increase in energy Maintenance free, no
consumption between flashover, no power
2009 and 2035 outages

Effect of Market: Driver:

silicones: Worldwide Higher living
 Aging standards
resistant
 Water-
repellent

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Andreas Collignon, Wacker Chemie AG; November 2015 12
Rinse Laundry Only Once With a Single Rinse Fabric Softener

Without
Silicone

0,1% WITH
Silicone
Post wash 2nd Rinse 4th Rinse

Active silicone antifoam Save water & save time Pleasant fragrance,
agent added to hand- softness, no detergent
wash fabric softeners residue on textile
Effect of Market: Driver:
silicones: Emerging Sustainability
Antifoam countries

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Supporting Customers by Understanding Regional Needs

70%
Of Shampoo in India is Natural feel and good
sold in sachets as they hold at high humidity
are more affordable and higher temperature

Effect of Market: Driver:

silicones: India Higher living
 Softness, standards
silkiness
 Strong
hold

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Andreas Collignon, Wacker Chemie AG; November 2015 14
Local Innovation & Production in India are Key Success Factors

UNILEVER & WACKER

an example for a strong
customer and supplier relationship

“WACKER helped UNILEVER

significantly to reduce the cost for
Silicone emulsions for Hair care
products by expanding capacities
and developing cost-effective
solutions from its site in India”

Value Creation Award Best Supplier Partner

2013 2014

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POLYMERS: VAE becoming attractive Polymer alternative in India

POLYMERS Characteristics Target markets

VAE Dispersions
Oxygen
Vinyl Acetate
C1/C2 Natural gas
Ethylene (VAE)
Building/Renovation Coatings
Styrene Acrylate C3/C6 Oil
Adhesives Others
 Price development of gas benefitting VAE Nonwovens,
carpet and paper
 Long-term evolution with initial successful
outcomes
Market Growth Drivers India
Dispersible Polymer Powder  Productivity improvements in
- skim coat
Dry Mix Mortar Market India*
- ceramic tile adhesives
5% - water repellency in building
Polymer modified
construction
95% Polymer un-modified
 Increasing demand in coatings and
 Strong growth potential by transformation adhesives segments
*Source: WACKER own estimates

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An Unique Creation: VINNAPAS® Powders for Skim Coats in India

Beautiful and Durable Walls and Facades

Skim coats are 1-2 mm thin coatings applied to
rough surfaces to achieve a smooth, flat wall
before painting or wallpapering
Possibility to create esthetically appealing
surfaces and facades
 Main market for skim coats: India
Skim codispersible polymer powders oats
modified with VINNAPAS®
Indian Market for Skim Coats  offer adhesion to various substrates, crack
in 25
1.000t free appearance, high mechanical stability
2.000
20
2.000  show increased weathering resistance and
therefore durability of facades
15
1.500
 are suitable for both indoor and outdoor
10
WACKER initiated modification of skim coats
5
5 with polymer powders  in the last ten years, the
market for dry-mix skim coats in India grew to ca.
0
2 mn. tons
2002 2013
Source: WACKER analysis

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Andreas Collignon, Wacker Chemie AG; November 2015 17
High focus on educating the dry mix mortar and tiling market

India tiling application

(falling off tiles; training & promotion to applicators) Challenges:
 Very traditional construction methods &
mindsets
 Growing knowledge and usage of
construction chemicals
 Creation of building industry standards

Key Measures:
 Increase awareness of material and time
saving, as well as quality improvements
 Local technical service to dry mix
customers
 Wacker on Wheels to meet applicators
(local partners)
 Consulting authorities
source: WACKER

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 ELASTOGRIP® as Transformation Driver

Traditional method wall tiling: dry cement is needed to reduce water bleeding and increasing tile grip

cement mixed with tiles are wetted cement paste applied tile applied to wall dry cement to final result
water on back of tile remove water

Addition of Elastogrip®: Elastogrip® addition saves time and cement (no sprinkling of dry cement needed )

Elastogrip® added to addition of cement cement paste applied tile applied to wall final result
cement and mixed or to water on back of tile source: WACKER
directly mixed in water

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BIOSOLUTIONS: Developing several Segments in Food & Pharma

Target markets Market Growth Drivers India

Cyclodextrins  Cyclodextrins & Cysteine:

Natural food ingredients offering
healthy vegetarian alternatives to
Food Personal care otherwise non-vegetarian products
Household Others
 PVAc Gumbase:
Pharmaceutical
Young demography, trendy, and
Cysteine dental hygiene

Food Others
Pharmaceutical

Gumbase

Food

WACKER’s strategy & portfolio for resurgent India

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POLYSILICON: India is the next big Solar Market to take off

Indian solar market characteristics Market Growth Drivers India

PV Installations (GW) 5,9%

 Very favorable conditions for solar PV
% of total electricity generation
4,1%
in India with high insolation

2,9% 15  Utility scale solar with cost advantages

2,0% 10
to Gas plants even without subsidies
1,3% 7
0,6% 0,8% 0,4% 0,6%
0,9% 5  Favorable economics of off-grid PV vs.
0,0%
3 diesel generation
10 11 12 13 14 15 16 17 18 19 20  Grid parity reached for residential
customers with LCOE cost advantage
of ca. 20% vs. purchase from the grid
 Growth supported by national and
state initiatives

Indian Solar Market about to take off

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Enabler to capture Growth in India

 Fair, effective and consistent laws

 Reducing bureaucracy, increasing

legal certainty, e.g. land purchase

Delhi  Introduction of Industry standards,

environmental standards, building
standards…

 Feedstock availability
Mumbai

 Development of Infrastructure
(Utilities, Logistics, Industrial Parks)

 Attract new technology by promoting

collaboration between Industry and
educational institutions

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India’s chemical business is set to grow strongly the next decades

 WACKER has a strong established

presence in India – and is poised for
further growth

 WACKER is a global technology leader

and industry benchmark in environ-
mental performance

 WACKER’s sophisticated products

contribute to progress, higher quality
of life and sustainability

 WACKER’s approach to India has been

and will continue to be long-term and
strategic

WACKER’s strategy & portfolio for resurgent India

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