LANXESS –Leading supplier of specialty elastomers for the automotive industry

Daniel TaylorNBD manager EPDM - Technical Rubber ProductsNovember 27, 2012, Port Elisabeth, South Africa

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Content

� Lanxess portfolio of Technical Rubber Products for automotive

� Introduction of technical rubber products

>Main headlines by product

> Importance of automotive

> Examples of automotive applications

� Conclusions

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LANXESS offers by far the broadest portfolio of synthetic rubbers for the automotive industry

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Technical Rubber Products

SBR BR IIR EPDM CR NBR HNBR AEM ACM EVM CSM FKM ECO

Lanxess TRP is investing and innovating in all of its product lines

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ASTM classification – Temperature versus oil swell

60

80

100

120

140

160

180

200

220

240

260

0 20 40 60 80 100 120 140 160 180

AEM

CM

CSM

IIR

NBR

ACM

NRBR

EPDM

SBR

MVQMVFQ

CR

HNBR

CO/ECO

40%VA90%VA

EVM

Oil swelling IRM 903 (vol.%)

Te

mp

era

ture

re

sis

tan

ce

(ºC

)

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Introduction NBR –Specialty rubber of acrylonitrile and butadiene

� Lanxess

- Global market leader

� Unique property

- Oil resistance

� Market volume

- ~ 500 kt (2010)

� Average market increase

- ~3% per year

Penetration time [days]

0 7 14 21

50

100

150

200

250

300

NBRCR

SBR

NR

Ch

an

ge

of

weig

ht

[%

]

Comparison of penetration time Main product: NBR-bales

Krynac®: Flooring Shanghai airport Perbunan®: Seals in pharma

Lanxess TRP via 50:50 % JV jointly invested $ 50 million in NBR; producing 30 kt of NBR in China, effective H2-2012.

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Automotive end uses represent ~ 50% of the total NBR consumption

� NBR provides superior resistance to

degradation by oil and fuels

� Automotive main segment, but also

construction , food and pharma

� LXS offers full range of NBR, so also

NBR specialities:

� Krynac: extremly high oil resistance

grades: 4450 / 4975

� Krynac X: for apron and cots

� Perbunan CHM: Clean High Modulus

for injection moulding

� Baymod N: for friction and plastic

modification

� LXS worldwide biggest NBR site in

France offers all NBR technologies to

design NBR customer solutions

NBR Global Demand by Industries and Segments

5%

6%

51%7%

20%

4%

7%

Automotive

Machinery

Plastic Mod.

Aprons & Cots

Wires & CablesOthers

Construction

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Introduction HNBR

HNBR properties

� Lanxess universal high performance rubber with

- Optimized processing

- Increased product quality

- Broader functionality window

� Continuously growing range of applications

� Lanxess is expanding capacity for

- Belts, Sealants and Gaskets

- Cable and Hoses

- Diaphragms, Rolls

- Oil drill parts and High temperature applications

Lanxess TRP investing single digit € million amount in expansion of HNBR capacity with 40%

to support its continued growth in HNBR sales, effective H2-2012

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� In automotive safty parts – brakes

� Preferred material Baymod NXL 3843

Key requirements

� product:

- Flexibility

- Compactness

- Friction coefficient

- Noise

- Heat resistance

� process:

- powder material preferred

- dry mixing + sintering process

Automotive applications of Lanxess NBR NBR powder in friction - examples

Clutch disc

Brake pads

Brake linings

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Typical grades

� Krynac® 4450

� Perbunan® 3945

� Therban® 4307

and 8505

Automotive applications of Lanxess NBR / HNBR Seals – examples (incl. oil filter and shock absorber seals)

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Automotive applications of Lanxess NBR / HNBR Hoses – Examples

Typical grades

� Perbunan® 1846

(brake)

� Perbunan® 2845

(hydraulic / fluid

hoses)

� Therban® 3406

(hydraulic / power

steering)

Brake hoses

Hydraulic hoses

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HNBR Therban® – Typical automotive applications

Transmission belts

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Dampers / isolaters

HNBR Therban® – Typical automotive applications

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Introduction CR –Specialty rubber of chloroprene

CR properties and global demand

� Lanxess

- market leader EMEA and global no 2 position

� Unique properties

- Low permeability, excellent fatigue resistance

� Further properties

- Low-temperature flexibility, adhesion to

reinforcements

� Market volume~300-350 kt (2010)

� Average market increase:

~3-4% per year

Lanxess TRP investing € 17 million in 10 % expansion of its capacity, incl. implementation of new production technology, becoming effective in 2013

0

10

20

30

40

50

60

70

80

90

100

Perm

eation c

oeffic

ient

[cm

³(NTP)*m

m/(m

²*h*b

ar)]

NBR (27%

ACN)

IIR CR SBR NR VMQ

Hydrogen

Oxygen

Product: 25 kg CR-bags

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Automotive sector represents ~25% of global CR consumption

� Polychloroprene is produced in a

variety of grades in both dry and

latex forms

� Dry grades of CR are normally

used in industrial and automotive

rubber goods such as axle boots,

air springs, hoses and belts

� Latex grades of CR are used in

waterborne adhesives and

dipped goods, such as gloves

and CVJ (constant velocity joint)

boots

CR Global Demand by Industries and Segments

18%

28%

5%26%

9%

2% 12%Adhesives

Construction

Latex

Automotive

Others

Wire&

Cables

Rubber

Products

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Baypren® CR – Typical applications

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Introduction EVM

EVM properties

� Lanxess’ unique high performance material

(> 40% VA)

� EVM provides among others

- Excellent Flame Retardant Non Corrosive

properties

- UV and Ozone resistance

� Lanxess is expanding capacity to follow growth in;

- Cable isolation

- Construction & Protective Films

- Automotive seals

- Plasticiser, Modifier of e.g. CR, EPDM, HNBR

- Shoes, Translucent rubber, (Hot melt)

AdhesivesLanxess TRP investing € 9 million in expansion of EVM capacity to support continued growth

in EVM sales, effective H2-2012

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Lanxess EVM – Typical applications

Rocker box cover seal

ABS cable Fuel hose cover

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Introduction EPDM –The versatile elastomer

EPDM properties & global demand

� Lanxess

� global market leader

� Unique property

- Very good outdoor properties

� Further property

- Easy processabilty

� Market volume: ~1,100 kt (2010)

� Average market increase: ~4-5% per year

Product: 25 kg bales, pellets

Comparison of properties

Lanxess TRP invested > € 300 million in EPDM via acquisition of Keltan® EPDM and its implementation of ACE™ EPDM technology on its largest EPDM line in Netherlands

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The EPDM market depends mostly on the automotive industry

� Consumption of EPDM in

automotive applications is the

major use for EP elastomers

accounting for approximately 45-

55% of global demand

� EP elastomers are used for

various body and chassis parts,

radiator and heater hoses, and

door and window

weatherstripping

� The growth of EP elastomers

depends on the growth of the

automotive industry as a whole

EPDM Global Demand by Industries and Segments

0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%0%

12%

10%

38%

7%11%

13%

6%

2%

Polymer

Mod

Construction

Automotive

Oil additive

AppliancesWire &

Cable

Rubber

Products

Others

* Polymer Mod and oil additives also mostly for automotive applications

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Solid and sponge

sealing systems

Engine mounts

Solid and sponge sealing systems

(60-65% of automotive volume)

Wipers and belts (5% of automotive volume)

Wipers

Hoses (10% of automotive volume)

Radiator hose

Airco hoseBrake hose

Source: Company estimates

Keltan® EPDM – Typical automotive applications

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KELTAN® – LANXESS’ high-performance rubber

� From January 1, 2012, LANXESS has one brand

name for all LANXESS high-performance rubber

EPDM: KELTAN®

� LANXESS will have one KELTAN® EPDM portfolio

and coding, streamlined but matching your

requirements today and in the future.

� LANXESS will convert its biggest production line in

Geleen, The Netherlands, to its innovative

KELTAN® ACE™ technology

� Lanxess will build a large EPDM Plant in China

based on Keltan® ACE technology.

KELTAN® – The leading EPDM brand

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New innovations in EPDM production

Commitment to increase the eco-friendliness of rubber

ethylene propylenediene as termonomer

(e.g. ENB)

� New Catalyst

Technology

� Improving on

Ziegler-Natta

Bio-based =Keltan® Eco

CH2CH 2

CH C H 2

H3 C

Keltan® ACE™ technology

EPDM EPM

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Benefits of Keltan® ACE™ technology

InnovationSustainability

Reduced energy requirement

� Less pressure on increasingly scarce resources

No catalyst waste

� No deashing necessary, yet lower catalyst

residues

Chlorine free product

� Avoidance of chlorine in catalyst system resulting

in lower contact corrosion

Full grade slate capability

� Unique ability to produce the same high quality

grades regardless of catalyst technology

Product diversification potential

� Breakthrough for peroxide vulcanized compounds

with the High VNB technology platform

� Enabling reduced peroxide dosage, improved

properties or increased compound loading

Keltan® ACE™

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Keltan® Eco – First commercially available bio-based EPDM

Benefits

� Reduced dependence on fossil resources

� Reduced carbon footprint due to sugar cane

� Lower energy footprint than traditional EPDM

� Truly sustainable & validated by Life Cycle Assessment

� Bio-based content can be measured by ASTM D6866 Carbon-14 test

First achievements

� Keltan® Eco made in Brazil last year > 67% bio-based

� No compromise on quality

� Positive response in the market

� Testing at customers is ongoing

Keltan® Eco helps our customers to produce "greener" products

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Tailored solutions for versatile application opportunities

Focus on

� Specialty high-end applications

� Partners with sustainability on agenda

� Green applications

� Applications visible to end consumer

Application opportunities

� Bio-based, flexible, elastic, heat stable, weather resistant, durable, great surface aesthetics

� Moldable, mixable, extrudable, compatible with other synthetic rubbers

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Looking for picture of a car with reference to various rubber parts & type of rubber

Konzernforschung / Markenlabor Volkswagen

Synthetic elastomers in automotive – thus more then tires

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TireSupplier

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Technical Rubber Products

SBR BR IIR EPDM CR NBR HNBR AEM ACM EVM CSM FKM ECO

Lanxess is investing and innovating in all of its product lines

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LANXESS BU-TRP will split into KEL (EPDM) and HPE (CR, NBR, HNBR/EVM) to better grow and develop both businesses.

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LANXESS - your partner of choice for automotive industry

� LANXESS is very committed to grow & build its specialty synthetic rubber products for

automotive applications

- Acquisition of KELTAN® EPDM, KELTAN® Eco, investments in innovative ACE technology.

- Debottlenecking of CR, HNBR and EVM capacities.

- New production of NBR in China.

- Construction of a new large EPDM plant in China based on ACE technology

Conclusions

LANXESS has thus broadest portfolio of technical elastomers for automotive and

would like to be the supplier and development partner of choice for you

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Internet: www.lanxess.com

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