Battery Council International
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Transcript of Battery Council International
Dan LangdonPresident East Penn Manufacturing Co., Inc.
Current President BCI
Battery Council International
• Regulatory Legislation• Global Implications• Election Year Implications• North America Industrial Battery Forecast &
Data• North America SLI Battery Forecast &
Marketing Data• Effects on Distributors• Battery Council International
Agenda
Now with Ohio: Pb Battery Recycling Laws - April 2008Now with Ohio: Pb Battery Recycling Laws - April 2008
BCI Model
Disposal Ban
Recycling Laws
Recycling
• 97% of all battery lead is recycled• Compared to:
– 55% of aluminum soft drink and beer cans
– 45% of newspapers
– 26% of glass bottles
– 26% of tires
Air Transportation Safety
• Continues to be a concern– FAA now has 95 “incidents” on its list
– Biggest focus is lithium/lithium ions
– Most recent incident involved nonspillable lead-acid batteries shipped by manufacturer
• Average FAA penalty now $80,000• New battery transportation rule to be
proposed this summer
National Ambient Air Quality Standard for Lead (NAAQS)
• 1976 – Lead added to list of criteria pollutants
• 1978 – Primary and secondary NAAQS set• 1.5 µg/m3, quarterly average
• May 2008 – Proposed revision rule due • September 2008 – Final rule • September 2011 – States must amend their
regulations (SIPs). This probably means new permit restrictions.
Change in Emissions Sources
• 2002 National Emissions Inventory (NEI) – ~1700 tons lead emitted per year
– From >12,000 point sources plus non-point, mobile
• NEI does NOT include near-roadway resuspension of soils/dust that may contain historically deposited lead– California study suggests this may contribute up to 8
times the emissions from stationary & mobile sources combined
Aviation Fuel 392Utility Boilers 221Industrial/Comm/Institutional Boilers & Process Heaters 191Iron and Steel Foundries 110Primary Lead Smelting 59Secondary Lead Smelting 46Mining 38Military Installations 33Municipal Waste Combustors 33Electric Arc Furnaces (EAF) 32Integrated Iron & Steel Mfg. 32Pressed & Blown Glass & Glassware Mfg. 32Lead Acid Battery Mfg. 25 Secondary Nonferrous Metals 23 Hazardous Waste Incineration 22Total (Includes Categories Not Listed Above) 1640
Emissions Sources
Climate Change Regulation
• Potentially the biggest Federal regulatory program since the New Deal
• “Cap and Trade” bills would require major emitters (factories) of greenhouse gases to obtain allowances– All electricity prices will go up … a lot
• May encourage off-shore production
Global Implications• European union directives on recycling• Registration, Evaluation and Authorization of
Chemicals (REACH)– Proof for demonstration for safe use of chemicals
• Continued consolidation in all segments of the channel everywhere
• Rising cost of raw materials• Cost of inventory ties up our capital• A global economy-outsourcing to China, India
and even Vietnam
China Issues
– Higher cost of oil feeds inflation in China - up to 15% annually
– Prices rising from much higher shipping rates• Cost of sending a 40 foot container from China to
the US West Coast soared 150% to $5,500 since 2000 (Source: CIBC World Markets)
China Issues
– The shift back to the US has started• The weaker dollar has made our products more
attractive• Little value in having millions of dollars in inventory
sitting in the middle of the Pacific Ocean• China elimination of VAT Refund is leveling the
playing field
From BCI Perspective
• Little real progress in Congress in 2008• Many oversight hearings• Few policy-oriented policymakers• Increase in legislation and regulation -
particularly in the environment
Election Outcome Implications
• Climate change legislation by Nov. 2009• Lieberman-Warner (originally called McCain-
Lieberman) bill
• Other environmental and occupational health initiatives by mid-year
• Basel ratification/TSCA amendments • E-waste mandate (new RCRA recycling title?)• Limitation on imports from some countries• Lead paint in housing legislation
Election Outcome Implications
• OSHA lead standard in 2010 or 2011• Imitation of European Union Directives by
2011
What About the Candidates
• Both candidates favor environmental protection
• Offshore and Alaska drilling will be major issue
• Vagueness about environmental issues other than climate change
• Obama offers specifics including emphasis on lead poisoning of children
• Transition papers and appointments will be key
111th Congress Could Be Huge
• Climate change legislation• Additional EPA regulation• Securities/Banking legislation• Federal regulation of insurance industry• Restrictive trade legislation
North America Industrial Battery Forecast & Data
Presented by Bob Cullen Vice President, Sales & Marketing Battery Products, Hollingsworth & Vose Company at BCI’s Annual Convention.
$751Motive
$744 Stationary
Total: $1.49 Billion
By Market Class ($ Millions)
2007 Industrial Battery Sales
49.8%
50.2%
Source: Battery Council International
Industrial Battery Trends
0
100
200
300
400
500
600
700
1998 2000 2002 2004 2006 2008
OEM Non-OEM
$ (millions)
Source: Battery Council International
Actual 2007
Forecast 2008
8% (4%)
Industrial Truck
U.S. Motive Power Trends
• Fork Lifts– Battery Market increased by 8%; (20% due to
lead)
– 2007/8 Equipment spending slows dramatically
– US Economy becoming a Service vs. Manufacturing Society
U.S. Motive Power Trends
• Forklifts (cont’d)– US Warehouses need more Forklifts than
Manufacturing plants
– Overall Market Conditions• Replacement market is helping • 2008 expected to be a down year
Industrial Battery Market Summary
• Motive Power– Actual Motive Power increased sales by 8% in
2007- down 6-8% when Lead prices deducted
– Motive forecasted to decrease by (4%) in 2008
– BCI Forecast - Motive down (9%)
Adjusted for non-reporting companies,includes additional sales & export shipments
OEM
22.2
24.4
20.1
10
14
18
22
26
2001 2003 2005 2007
million units
– =
Replacement
98.7
93.9
84.6
75
80
85
90
95
100
105
2001 2003 2005 2007
million units
North America SLI Shipments
Source: Battery Council International
U.S. / North American OE Battery Shipments
Source: Battery Council International
OE SLI Battery Market
0
5
10
15
20
25
30
19801981
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
Millions of units
U.S. / North American Replacement Battery Shipments
Source: Battery Council International
Replacement SLI Battery Market
40
50
60
70
80
90
100
19801981
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
Millions of units
North American SLI Battery Shipments Percentage
82.6% 81.2% 82.0% 82.4% 83.1%
0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007
Replacement OEM
Percent of Total
Source: Battery Council International
North American SLI Battery Forecast
112.1 117.9 122.4 129.8118.8
0
25
50
75
100
125
150
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Replacement OEM Total
million units
Source: Battery Council International - Daramic Staff
0102030405060708090
100110120130
2003 2004 2005 2006 2007 2008 2012
Millions of units
OE Repl
2.0% 4.5% 0.2% 1.0%
-1.8%
6.0%
CAGR 2008-2012OE: 0.4%, Replacement: 1.7%
Total: 1.5%
FORCAST
North American SLI BatteryForecast Percent Change
Source: Battery Council International
2007 SLI Replacement Shipments by Segments
2.4%
9.7%65.2%
6.5%0.6%
5.8% 4.0%
0.4% 5.5%
Passenger Car & Light Truck Heavy Duty Commercial Marine/RV
Special Tractor General Utility Golf Car & Floor Scrubber
Military Types Power Sport Other
Source: Battery Council International
*2004–07, no earlier data
SLI Battery Shipment Trends by Application
CAGR 2001–07 OEM ReplacementLight Vehicle -2.3% 0.1%
Heavy Duty -3.3% 5.2%
General Utility -4.9% 1.6%
Golf Car/
Floor Scrubber 4.1% 7.8%
Marine/RV 1.3% 3.1%
Motorcycle/
PowerSport* 10.6% 10.7%
Total 0.1% 1.7%
Source: Battery Council International
9.79% 0.50%0.14%
1.80%
22.41%
19.22%
0.03%0.96%
0.99%
27.73%
16.42%
Gas & Oil Co. Tire & Rubber Co.
Mass Merchandisers (Department & Discount Stores) Mass Merchandisers (Auto Chains)
Mass Merchandisers (Other) Fleet Operations
Government Vehicle & Equipment Mfg.
Parts Distributors Battery Specialists
Other
SLI Replacement Shipmentsby Channel of Distribution
Source: Battery Council International
2007
The Top Five Reasons for Purchasing Particular Battery
Does not total to 100% due to multiple answers
PerformanceClaims
BrandName
RecommendationsLowestPrice
Other
54% 53% 42% 41%28%
Source: Aftermarket Business June 2008 issue
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*
Professional Service (DIFM) Do-It-Yourself (DIY) Sales
Size of the Automotive Aftermarket
(Values in Millions of Consumer Dollars)
* 3.9%Compounded
AnnualGrowth Rate
Figures represent consumer expenditures in current retail dollars (i.e., inflation added) and do not include warranty work.
Source: AAIA - 2008
Installing The Battery
Aftermarket Business 5th Annual Consumer Attitude Study June 2001
DIY - 48%DIFM - 52%
DIY - 55%DIFM - 45%
Aftermarket Business 12th Annual Consumer Attitude Study June 2008
US Trade Data Lead-Acid Batteries
Source: US ITC Trade Data Web, downloaded 27Mar08
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Exports Imports
million units
*GVW 1-8
2007 Total scrappage rate at 5.2%
US Vehicles Scrappage Rates
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
1970 1980 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007
Cars Trucks* All Vehicles
Source; 2007 R.L. Polk & Co.
Median Age of U.S. Carsand Light Trucks
**GVW 1-3
In 2007, the percentage of the car population 11 years of age and older was 41.3%, compared to 40.9% in 2006. For light trucks, this percentage was 29.5% in 2007 and 29.2% in 2006.
5
5.5
6
6.5
7
7.5
8
8.5
9
9.5
Age
Cars Light Trucks*
Source; 2007 R.L. Polk & Co.
Age of Vehicle When Purchasing A Battery
3%
32%34%
31%
<1 Years 2-5 Years 6-9 Years >10 Years
Source: Aftermarket Business June 2008 issue
U.S. Vehicle Registration
237.1235.2231.9
224.9221.7
200205210215220225230235240245250
2003 2004 2005 2006 2007
Mill
ions
Source; 2007 R.L. Polk & Co.
Hybrid RegisteredVehicle Information
280,792
354,545
145,194
85,81643,311
18,6280
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2001 2002 2003 2004 2005 2006
Source; 2007 R.L. Polk & Co.
Hybrid Vehicle Registration Market Share by OE Manufacturer
Lexus10.5%
Ford6.7%
Mercury0.8%
Toyota 63.2%
Honda18.8%
Source; 2007 R.L. Polk & Co.
Number of Hybrid VehicleLaunches by Nameplate
8
27
40
16
53320
10
20
30
40
50
2001 2002 2003 2004 2005 2006 2007 2008
Source; 2007 R.L. Polk & Co.
66 - 815 – 2050 - 60Battery capacity (Ah)
>2001443612Battery voltage (V)
EV Drive
Motor assist
Engine start
Regen. Braking
FullMediumMild-Micro-
66 - 815 – 2050 - 60Battery capacity (Ah)
>2001443612Battery voltage (V)
EV Drive
Motor assist
Engine start
Regen. Braking
FullMediumMild-Micro-
HEVs and Functions
(Hybrid Electric Vehicle)
Achieved 100k miles Driving without Conditioning charge @ Jan.15, 2008, Similar performance with Ni-MH Module Drivability, Durability, Fuel Economy, CO2 Emission
ALABC Project - UltraBattery
UltraBattery Benefits
• Overcame the weak point of conventional lead-acid battery
• Suppressed NAM sulfation• Superior charge acceptance• Excellent durability @ HR-PSOC (partial state
of charge)• Meets or exceeds the targets of:
– Power - Available Energy - Cold Cranking
– Self Discharge
Summary
• Overall demand for lead acid batteries remains stable with only a modest increase in 2008 before returning to historical levels.
• OEM is foreseen to continue its decline for the next couple of years, particularly with the uncertainty of our economy.
• One must still keep a watchful eye towards Asia while looking for opportunities in Europe due to the increasing gap in the Euro to US dollar.
How All This Affects Distributors• Price of lead, fuel and other metals directly affect
cost of manufacturing and distributing a battery• Increased legislation and regulation both here and
abroad will increase manufacturing costs • Environmental and recycling also affects
everyone in the channel of distribution• New advances in lead technology make this (lead)
technology affordable and competitive• Battery Specialists can help customers by
reducing inventory and distribution
BCI 2008 Membership
• 21 new members-262 in total. • 35 Manufacturers• 102 Suppliers• 106 Marketers• 9 Associate Members• 10 Mutiple Members• Since 1998 (10 year) BCI membership has
grown 50%!
BCI Membership
Stable, trustworthy, resourceful, 84 year-old trade
association seeks long term relationship with battery
companies. While others may come and go, BCI is still
thriving after 84 years. With a dedicated volunteer
management team and professional staff, it’s no wonder so
many of our members have been with us since the beginning.
WANTED
Battery Council International
• We invite all EBG members to become more active in BCI
• Sign up for a committee• Attend our annual conference and Power
Mart Trade Fair• Read our bulletins and newsletters• Call or email us your questions, suggestions
and concerns
Battery Council International
• This is a responsible industry.• This is a safe industry.• This is a recycling and environmentally
friendly industry.
SPREAD THE WORD!