TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO … 2009/TPE... · TPE APPLICATIONS AND TECHNOLOGIES...
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TPE APPLICATIONS AND TECHNOLOGIES RESPOND TO RECESSION AND GLOBALIZATION
PRESENTED BY:Bob EllerRobert Eller Associates LLCPhone: 330-670-9566E-mail: [email protected]
PREPARED FOR:
TPE 2009Frankfurt, Germany
November 11, 2009mydox/papers/TPE 2009 ppt 110509.ppt
ManagementDECISIONS
ANALYSIS
MA
RKET
ECON
OM
IC
TECHN
ICA
L
Robert Eller Associates LLCCONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES
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• Macroeconomics/Globalization: Effects on TPE Markets and Technologies
• Western/Asian Differences
• China TPE Market
• Global Automotive Market
• TPE Growth Applications: Evolving Market Dynamics
• Summary
OUTLINE
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TPE(d) FAMILIES . . .CHANGING STRUCTURE, INCREASED INTRA-TPE COMPETITION
TPE FAMILIES
OLEFINIC(o-TPEs)
STYRENIC(SBCs)(f)
SUPER-TPVs PVCTPEs
OTHERE-TPEs
s-TPO o-TPV HYDRO-GENATED(H-SBC)
ISOPRENE-BASED MID-
BLOCKS
SILICONE
ACRYLATES
OTHERCOPE
COPA
TPU
p-TPV(d)(PARTIALCROSS-LINKED)
f-TPV(d)(FULLYCROSS-LINKED)
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
COMMODITYTPO
OBC(c) AND NANO CRYSTALLINEOLEFIN ELASTOMER(b)
SBS
r/mydox/tpe/TPE Families 101209.vsd // lg/myfiles/visio/TPE Families 101209.vsd
OTHERSr-TPV
(a)
Notes: = Production dominated by resin supplier s(a) Recyclate-based TPV(b) e.g., Notio TM from Mitsui Chemicals(c) e.g., Dow's Infuse TM
NEWENTRANT
(e.g.,KRAIBURG)
*
*
*
*
*
* (d) In Asia, the term "TPE" is often used to describe styrenic TPEs(e) Sometimes referred to as TPE-V(f) Sometimes referred to as TPE-S
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MACROECONOMIC CONDITIONS/GLOBALIZATION
• At Least 2-year Trough
• Global Mfg. Rebound Since April ‘09: - Government subsidies- Auto scrappage programs- Slowed unemployment claims- Slowed GDP declines
• Manufacturing Shift: West ���� Asia
5
GLOBAL ECONOMIC GROWTH: 2 YEAR TROUGH
0
1
2
3
4
5
6
7
8
9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SOURCE: IMFb/mydox/rapra 2008/rapra 2008.xls
AN
N. %
CH
AN
GE
(A
T P
PP
)
ADV. ECON.
EMERG. ECON.
WORLD
6
MFG. PURCHASING MANAGERS' INDICES (PMIs)
0
10
20
30
40
50
60
70
Jul-0
8Aug
-08
Sep-0
8
Oct-08
Nov-0
8
Dec-08
Jan-0
9
Feb-09
Mar-0
9
Apr-0
9
May-09
Jun-0
9
Jul-0
9
SOURCES: FINANCIAL TIMES; ROBERT ELLER ASSOCIATES LLC, 2009b/mydox/papers/TPE sectors 09.xls
GR
OW
TH IN
DE
X
(<50
= C
ON
TRA
CTI
ON
)
US INDIAEUROZONE CHINA
EARLIER START TO RECOVERY IN CHINA/INDIA
RECOVERY START U.S./EUROPE
7
WESTERN/ASIAN DIFFERENCES
• Asia (Esp. China) Rebound:- Faster recovery than Western regions
-- Large, government stimulus programs -- Western downturn hurting exports-- Deep interest rate cuts
CHINA GROWTH
10.02008
2010
2009
2007
Year
9.0
7.8
11.9
GDP Growth, %
Growth due to gov’t. programs and some gain in the domestic economy
Note
Source: Robert Eller Associates LLC – Asia Div., 20 08
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WESTERN/ASIAN DIFFERENCES (Cont’d.)
• TPE Market Sectors:- Europe and U.S. similar demand distribution- Auto applications dominate (~40% of demand)- Broad demand distribution amongst other mkts.
• TPE Demand in West Impacted By:- Recession conditions - Severe auto production downturn - Consumer end market production shift to Asia
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EXHIBIT 3 GERMAN MANUFACTURING AS % OF GDP
15%
20%
25%
30%
35%
1990 1995 2000 2005
SOURCES: UNICREDIT RESEARCH; ROBERT ELLER ASSOCIAT ES LLC, 2009b/mydox/TPE Frankfurt 2009/TPE sectors.xls
MA
NU
FA
CT
UR
ING
, % O
F G
DP
GERMAN MANUFACTURING AS % OF GDP
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GLOBAL AUTOMOTIVE MARKET
• Largest single market for olefinic and styrenic TPEs, even in China
• Global automotive vehicle production fell sharply in 2008/2009
• Global recession/high fuel prices/carbon footprint awareness create new auto TPE paradigm: - Fleet composition shift to smaller vehicles - Extensive use of government incentives
(scrappage/CO2) � short-term sales stimulus- Strong support for electric drive/battery vehicles - Moderate fuel economy (CAFE) shift in U.S.
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EXHIBIT 2 DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
AUTOBLD
G/CONSTR
MEDICAL
APPL/TOOLS
PERS CARE/C
OSMETIC
SFLU
ID H
ANDL'G/IN
DW
IRE/C
ABLECONSUMER/H
SWR
SPORTS/ LEIS
URE
FOOTWEAR
E/E &
COMM
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009 b/mydox/TPE Frankfurt 2009/TPE sectors/xls
DE
MA
ND
, %
NA
EUR
DEMAND SHARES FOR TPE COMPOUNDS BY SECTOR FOR SPECIALTY TPEs
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GLOBAL VEHICLE SALES OUTLOOK
0
10
20
30
40
50
60
70
80
90
1975 1980 1985 1990 1995 2000 2005 2010 2015
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009r/mydox/Auto Industry/Global Ind Volume TW 081209.xls
VE
HIC
LE S
ALE
S, M
M U
NIT
S
Annual Growth1990-2000 2.4%2000-2005 3.6%2005-2015 1.3%
2000: 57
2009: 9% DECLINE
FOLLOWED BY RECOVERY IN
2010/2011
42% in 15 emerging markets; 58% in Europe/U.S./Japa n
2015:77MM
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U.S. AND EUROPE LIGHT VEHICLE SALES
6
8
10
12
14
16
18
20
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
SOURCE: DEUTSCHE BANK, 2009B/mydox/auto industry/NA and EUR sales.xls
SA
LES
, MM
UN
ITS
U.S.
EUROPE
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THE OIL PRICE ROLLER COASTER: AUTOMOTIVE TPE DEMAND
Source: Foreign Affairs , Sept./Oct. 2009
Have the 2008 fuel price spike and tipping point permanently shifted:
• fleet composition?
• lightweighting incentives?
• break-even volumes?
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REGIONAL DIFFERENCES IN o-TPV USAGE IN AUTOMOTIVE
2.0
1.4
China
2.6
2.1
Global
kg/Vehicle
1.52010:
2005: 0.9
India
o-TPV Penetration in Auto Still Low in China/India
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AUTO TPE GROWTH APPLICATIONS
• China/India auto o-TPV growth opportunity
• Auto lightweighting: - Driven by fuel price increases - TPO growth in exterior panels (e.g., Ford Kuga)
• Rubber challenge continues - High heat and oil resistance - Body/glazing seal substitution continues
• Reduced cost luxury auto interiors (small car effects)
• TPO solar opportunities (PV roof/wall shingles)
• Halogen-free, flame retardant (mobile electronics)
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W . E U R O P E A N V E H IC L E M A R K E T S H A R E S H IF T
0
1 0
2 0
3 0
4 0
5 0
6 0
A/B C /D
F L E E T M A R K E T S E G M E NTb / myd o x / jec 0 9 / eur o m ix s hi f t .x ls
SA
LES
SH
AR
E,
%
2 0 0 52 0 0 9 (E S T )
S o u rce s : JD P o w e r ; D e u tsch e B an k ; R o b e r t E lle r Ass o c . L L C , 2009
TPE 2009 ppt.ppt
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NEW AUTO PARADIGM: TPE EFFECTS
• Drives up the value of weight savings: 10% wt. reduction � 7% fuel economy improvement
• Further restructuring of auto supply chain
• Encourage parts consolidation
• Encourage PP compound demand (esp. glass fiber/PP) � stimulates use of olefinic TPEs
• Favors TPE systems applications
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EXHIBIT 9: MACROECONOMIC DRIVERS, NEW PARADIGMS, A ND AUTOMOTIVE TPE OPPORTUNITIES
Note: (a) DIRECT COMPOUNDING = D-LFT, AT-PRESS FIL LER ADDITION, ETC.
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
AUTO SALES DECLINE,SLUGGISH RECOVERY
GLOBAL RECESSION
OEM MARKETSHARE SHIFT
SUPPLY CHAINCONSOLIDATION,REORGANIZATION
SHIFT OF TECHNICAL CHOICES
AVOIDCAPEX
LEAN SUPPLYCHAIN CHOICES(REDUCE UNITOPERATIONS,
SYSTEMS COST)MAXIMIZEEXISTING
TECHNOLOGY
- DIRECT COMP'DG.(a)- 2-SHOT MOLDING- IN-MOLD FOAMING- TPV, SEBS BODY/ GLAZING SEALS
IN-MOLDDECORATIONSURFACINGMETHODS
- FUEL EFFICIENCY- CO2 DISCHARGE LEGISLATION
FUEL PRICEINCREASE (DEMAND,
TAXATION)
- ELECTRIC DRIVE- HYBRIDS
GLOBAL FLEETCOMPOSITION
SHIFT TO SMALLERVEHICLES
INCREASEDVALUE FOR
LIGHTWEIGHTSOLUTIONS
INCREASED VALUEFOR PERCEIVED
INTERIOR LUXURY
BATTERYRELATED
SUBSTITUTES
LGF-PP BODYSTRUCTURE
TPOOUTERSKINS
WIRE/CABLEJACKETING
SOFT TOUCHVIA SEVERAL
TECHNOLOGIES
EMERGINGMIDDLECLASS
ECONOMICALLYTRAILING
CLASS
- LOW COSTVEHICLE DESIGNS
- 2-WHEELERS
TPODEMANDSHIFT TO
EMERGINGREGIONS
THERMO-FORMED
TPO SHEET,LOW COSTTOOLING
r/mydox/auto industry/MacroE Auto TPE 09.vsd // lg/myfiles/visio/MacroE Auto TPE 09.vsd
ENERGY/ENVIRONMENTAL DRIVERS EMERGING MARKET SHIFTS
MACROECONOMIC DRIVERS, NEW PARADIGMS, & AUTO TPE OP PORTUNITIES
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CHINA TPE MARKETS
• China: Key role in global TPE demand/demand growth
• Unique Characteristics: - Largest regional TPE market - Highest regional growth rate (’09 – ’14) - Western transplant compounders/resin suppliers
must compete with domestic suppliers -- Significant domestic cost/market access
advantage - Highly export oriented- Rapid domestic market growth (limited focus
to date by Western transplant compounders)
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EXHIBIT 4: DURABLE GOODS OWNED PER 100 URBAN HOUSE HOLDS IN CHINA
SOURCES: CHINA NATIONAL BUREAU OF STATISTICSROBERT ELLER ASSOCIATES LLC 2009
r/mydox/China/China Durable Goods 09.ppt
0
20
40
60
80
100
120
140
160
180U
NIT
S/1
00 H
OU
SE
HO
LDS
1990 1995 2000 2006 2007
MotorcycleRefrigeratorAir ConditionerColor TVComputerMobile TelphoneCar
DURABLE GOODS OWNED PER 100 URBAN HOUSEHOLDS IN CHI NA
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CHINA TPE MARKETS: QUALITY TIERING
• Accommodates Different Target Market Segments
• Domestic Quality Tiers (Global/Local):Substantially under-served by Western TPE compounders
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CHINA TPE MARKETS: GLOBALIZATION AND LOCALIZATION COMPETITION
• Globalization: - Meet global specifications and quality standards- Serve global OEMs from China - Mfg. base starting to shift to other regions
• Localization: - Global compounders in China localize raw
materials supply chain - Target domestic Chinese OEMs and transplant
OEMs- (Often) using different TPE compounds for
domestic customers
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CHINA DOMESTIC TPE COMPOUNDER ADVANTAGES vs. TRANSPLANTS
• Utilize local raw materials; broader range of raw material types and sources
• Lower labor costs than Western transplant compounders
• Lower capital depreciation costs (by factor of 4-10X)
• Lower packaging costs
• Lower shipping costs
• Government subsidies
• Government funded R&D institutes
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QUALITY/PERFORMANCE TIERING IN THE CHINA TPE MARKET
Low End
Local
Glocal
Global
Low
Local standards
Near Global
High
QUALITY
Low
Local requirements
Near Global
High
PERFORMANCE
HighHigh
Near GlobalModerate
LocalLow
LowNone
PRICESERVICE
Source: Robert Eller Associates LLC, 2009
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QUALITY TIERING OF CHINA MARKETS
Source: Robert Eller Associates LLC, 2009
Low End *
Local *
Glocal *
Global
MARKET SEGMENT
Products produced for global market, meeting global quality and performance standards at global pricing
Products produced for domestic and export markets w ith near global quality and performance standards, with near global pricing
Products produced for the local market, meeting loc al performance, quality, and price requirements
Products marketed based solely on price, with low concern for quality and performance
PRODUCT/QUALITY DEFINITION
Note: * = Will gain share in global recession
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EXAMPLES OF TPE QUALITY TIERING
Source: Robert Eller Associates LLC, 2009
Not usedTSRCHotaiGLS Thermoplastic Elastomers/ PolyOne
SEBS Compound Supplier
o-TPV Supplier
SEBS Resin Supplier
Typical Compounding Extruder Supplier/Type
Toothbrush Supplier
-ExxonMobil(Santoprene)
-DSM (Sarlink)
Kraton
Coperion ZSK: designed & mfd. In Germany
Colgate Palmolive
GLOBAL
TSRC
Coperion STS: designed & partially made in Germany, remainder made in China; Cost ~40% of ZSK
San Xiao
GLOCAL
1-time use (e.g., hotel amenities)
San Xiao
Coperion CTE: designed & mfd. In China; Cost ~15% of ZSK
Wide specBaling
Shandong Dawn-BH Elastomer Co. (Dawnprene)
LOW ENDLOCAL
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CHINA INVESTMENT BY WESTERN COMPOUNDERS
• Accelerated prior to recent downturn
• Some majors elected not to invest in local manufacturing facilities: - Kraton - Dynasol - ExxonMobil - DSM
• Recent lifting of import duties from Singapore into China suggests Singapore will continue to see investment by Western (and Japanese) TPE suppliers
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TPE GROWTH APPLICATIONS RESULTING FROM EVOLVING MARKET DYNAMICS
• Automotive Lightweighting
• The Rubber Challenge Continues
• Solar Opportunities
• Halogen-free, Flame Retardant (HFFR)
• Bio-based TPEs
• Breathability
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-Uses 2-3 co-extruders to produce o-TPV/PP compound, rigid/flexible profiles
- Krauss Maffei is equipment supplier- Used on VW Golf VI- DSM TPE is o-TPV supplier
-Compression set-Dimensional stability-Foamability?-Surface quality
o-TPV-Triple co-extruded glazing profiles
->3 coextrusions possible
Auto
- Solar is growth sector-Meet HFFR regulations-Heat resistance
o-TPVGaskets
- Solar is growth sector-Meet HFFR regulationsSEBS, o-TPVWire/CableSolar Modules
- e.g., TPSiV (Dow Corning)-Silky touch super TPVEarplugs, cell phones
- f-PPE is key HFFR incumbent- Meet RoHS/WEEE requirements - See REA database
-Meet HFFR regulations-Low smoke -Low oxygen index
SEBSWire/CableMobile Electronics
- XLPE, PVC are key incumbents-High temperature, flame retardant requirements
SEBS, TPO/TPV, TPU
Wire/Cable
- DuPont, Multibase, Nippon Zeon, - Kraiburg (recently)- COPE challenge?
-Heat and oil resistancesuper TPVsHeat/Oil resistant applications, gaskets, etc.
- From LyondellBasell, Dow, ExxonMobil
-Soft touch with sufficient stiffness/impact
TPOFiber reinforced soft touch
- SEBS TPEs challenging EPDM in this high performance application
- o-TPVs also challenging EPDM
-Glass bonding with single component overmolding
-High flow properties
SEBSWindshield seal
- Kraiburg for BMW-Injected adhesive to bond engineering plastic layers
SEBSTailgate spoiler
SOURCE/NOTEKEY TPE PROPERTIESTPE TYPEAPPLICATIONSECTOR
EXAMPLES OF RECENT NEW TPE APPLICATIONS
(Cont ’d.)
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- Kraton- TPU is major incumbent
-Breathable/impermeablemodified(sulfonated)
SBC
-Desalination-Breathable fabrics
Membrane,Breathable
-Biodegradability SEBS?TPU?
Biodegradable TPEs
Consumer Disposables
- Kraton - Film/sheet applications- NotioTM (Mitsui Chemicals) competes
-Fine dispersion/ transparency -Impact modification -Avoid oil -Scratch resistance
SEBSImproved grades for PP modification
- Merquinsa- Kraiburg- GLS/PolyOne
-Food contactTPU, SEBSBio-based TPEsMultiple sectors
- More advanced in Europe than U.S. -Compression set -UV resistance -Processability
SEBS, o-TPVGasketsBuilding/ Construction
- Highly dependent on government regulations
-PVC substitution -Kink resistance-Low modulus -Processability -Heat sterilization
SEBS, TPO-IV sets -other applic.
Medical
- Example of TPO expanding from auto
-PV on TPO substrateTPOShinglesSolar Modules
SOURCE/NOTEKEY TPE PROPERTIESTPE TYPEAPPLICATIONSECTOR
EXAMPLES OF RECENT NEW TPE APPLIC. (Cont’d.)
Source: Robert Eller Associates LLC, 2009
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TPO/o-TPV: MAJOR AUTO GROWTH SECTOR
• New soft touch candidates/fabrication technology
• TPO demand stimulation from reinforced PP compound growth
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HATCHBACK DOOR: GROWTH APPLICATION FOR TPOs
Vehicle: Ford Kuga (2010)Application: Roof spoiler, tailgate outer panelGrade: LyondellBasell Hifax TRC 280XMolder: Plastal
REA Notes: - Inner panel is LGF-PP compound
(Stamax from SABIC)- Design transfer to U.S. (2010)Photo: Robert Eller Associates LLCr/mydox/papers/spetpo2009pix.ppt
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HATCHBACK DOOR INNER: GROWTH APPLICATION FOR LGF-PP
Part: Hatchback door inner panelMaterial: 40% LGF-PPStatus: PrototypeMolder: PlastalProcess: D-LFT (injection)Equipment: Krauss MaffeiNote: Competes with LGF-PP compound
Photo: Krauss Maffeir/mydox/papers/spetpo2009pix.ppt
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AUTO SOFT TOUCH REINFORCED TPO/o-TPV
• Small vehicle share increase:
- drives towards higher quality interiors without high cost of multi-step processes
- new generation of glass fiber reinforced, molded-in color TPOs with soft touch surface for interiors:
-- improved scratch and mar -- low knit line visibility -- low gloss -- compete with soft touch paints/
thermoformed or slush molded skins
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• E-LF-PP gives high load bearing and impact absorbency • Translation potential for rear seat backrest
Source: Weber Automotive; ESORO AG
• 20% stiffness increase vs. earlier version
• LGF-PP move into body structures
• Early use of E-LF-PP (endless long fiber polypropylene)
• Mineral-filled TPO exterior skin
MERCEDES SMART FORTWO TAILGATE: PRECURSOR FOR LGF-PP AND TPO IN BODY STRUCTURES?
37
Source: Weber Automotive; ESORO AG
Metallic front and rear elements
Double shell floor
DESIGN CONCEPT FOR E-LGF-PP BASEDCOMPACT CAR BODY STRUCTURE
Thermoset competition?
38
Source: Robert Eller Associates LLC, 2009
EXAMPLE OF LGF-PP & E-LF-PP DIRECT PROCESS
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SOME TPE LIFE CYCLE POSITIONS
• Early Growth Auto TPOs: - Soft touch - Exterior body panels - Body structures?
• Early Growth SBCs: - Bio-based (also TPUs) - Body/glazing seals
(competes with EPDM and o-TPV) - HFFR/PVC replacement
(mobile electronic wire and cable growth)
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AUTO TPO LIFE CYCLE POSITIONS
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
HIGH
MEDIUM
LOW
RE
LAT
IVE
VA
LUE
ADV. R/D; INTRODUCTION GROWTH MATURE
LIFE CYCLE POSITION
r/mydox/papers/Auto TPO Life Cycle 09.vsd // lg/myfiles/visio/Auto TPO Life Cycle 09.vsd
NOTES:
FIBER REINFORCED SOFT TOUCH
BODY STRUCTURES(a)
AIRBAG DOORS
IP SUBSTRATE
THERMOFORMED DOORTRIM SKINS(B)
BUMPERFASCIA
CLADDING
EXTERIOR BODY PANELS
2-SHOT SKIN/FOAM/SUBSTRATE
= ESTIMATED FUTURE DIRECTION
THERMOFORMEDIP SKINS(b)
(a) LGF-PP = LONG GLASS FIBER PP; E-LF-PP = ENDLESS (E.G., TAPE REINFORCED) LONG FIBER PP
(b) INCLUDES THIN PP (TPO) FILM TECHNOLOGY INTRODUCED IN EUROPE (BY JCI, OTHERS)
41SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
TE
CH
RE
QU
IRE
ME
NT
S
DEVELOPMENT INTRODUCTION EARLY GROWTH
r/mydox/TPE/SBC TPE Life Cycle 09.vsd // lg/myfiles/visio/SBC TPE Life Cycle 09.vsd
NOTE: (a) SOFT TOUCH GROWING IN AUTOMOTIVE
MATURE
BODY/GLAZING
SEALS(AUTO, B/C)
BIODEGRAD-ABLE
GRADES
HFFR
HIGH
MED
LOW
SBC TPE LIFE CYCLE EXAMPLES
PVCREPLACE-
MENT
FOOTWEAR
SOFT TOUCHNON-AUTO(a)
SOFTTOUCHAUTO
42
SUMMARY
• Global TPE Demand: affected by end use market shift to Asia
• Auto: - High share of demand and growth - Severe recession demand effects - China auto growth will stimulate demand - New auto paradigm- New applications will stimulate TPO, o-TPV,
SBC
43
SUMMARY (Cont’d.)
• China TPE Market: - Export/slowdown impacts- High growth domestic (glocal/local markets) - Western vs. domestic compounder competition
• High Heat/Oil Resistance: stimulated by new entrant?
• HFFR/Low Smoke: wire and cable stimulates several TPEs
• TPE Profitability in the New Paradigm – REA’s client focus
44
ABBREVIATIONS
c-TPO – compounded TPOCAFE – Corporate Average Fuel Economy (U.S.)COPE – copolyester-type TPEGDP – gross domestic product HFFR – halogen-free, flame retardantLGF-PP – long-glass fiber reinforced polypropyleneLGF-TP – long-glass fiber reinforced thermoplastic MNC – multinational company or compoundero-TPV – olefinic TPVPP – polypropylener-TPO – reactor TPOSBC – styrene block copolymer type TPE (may be SEBS or SBS) TPE – thermoplastic elastomer (all classes of thermoplastic
elastomer; SBC, TPO, o-TPV, TPU, etc.); note in some regions (e.g., Asia), “TPE” is used to refer to SBC-type TPEs
TPO – thermoplastic polyolefinTPU – thermoplastic polyurethane
45
46
CHINA: STRATEGIC RIVAL OF WEST?
• Global Power Position: Emerging power, comparable to U.S. at start of 20th century
• Economic Expansion: Outpaces West - 8.9% in 3Q/09 vs. 3.5% in U.S. - Provides economic leverage - Will soon overtake Japan as global #2 economy - Larger than U.S. economy by 2040-2050
• Largest Global Exporter - 1 year trade surplus = US$250BN - U.S. largest export target
(trade deficit = US$575BN [12% Wal-Mart])- Flood of cheap, Chinese-manufactured goods
swamping global economies (job implications)
47
CHINA: STRATEGIC RIVAL OF WEST? (Cont’d.)
• Largest Creditor Nation (holding $2 trillion in USD assets) -Provides huge trade leverage over U.S. -Could threaten dollar exchange rate
• Voracious Raw Material Demand (political implications)
• Dominant Economic Player in SE and NE Asia
• Key Global Power (influence on global disputes, e.g., N. Korea and Iran)
• Massive Military Modernization Program
• Building Port Facilities in Pakistan, Sir Lanka, Myanmar � ? major global naval power