Acrylic Chain Development

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Chemistry/Chemical Industry

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2007

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#1Acquisition in acrylics in China Arkema joins forces with Jurong Chemical ARKEMA INNOVATIVE CHEMISTRY#2Executive summary ARKEMA INNOVATIVE CHEMISTRY#3Reminder of Arkema's mid-term growth strategy (2016 Ambition presented at 2012 Investor Day) Broaden reach in higher growth countries with a balanced geographical presence between Europe, North America and Asia/rest of the world Implement balanced growth strategy between organic developments and acquisitions Support the development of acrylic downstream • Secure access to competitive monomer sources in fast-growing Asia • Bolt-on acquisitions in acrylic downstream and long- term partnerships with leaders Accelerate expansion in High Performance Materials through innovation in sustainability and focused acquisitions Sales by region 30% 17% 35% 26% 57% 35% 2006 2016e North America Europe Asia and RoW Cash allocation over 2013-2016 €3.6 bn cash resources available Cumulative cash flow from operating activities Borrowing capacity Capex €1.7 bn M&A, dividends and others €1.9 bn M&A Dividends Others 3 ARKEMA INNOVATIVE CHEMISTRY#44 Highlights of the planned acquisition Creation of Sunke, an acrylic acid manufacturing JV in partnership with Jurong Chemical, the leader in acrylic monomers in China • Strong relationship established with Sun Liping, talented entrepreneur and founder of Jurong Chemical ⚫ JV includes the Taixing high quality world-scale acrylic monomer assets started in 2012 • Majority share owned by Arkema Transaction highlights 1st step (summer 2014) access 160 kt/year acrylic acid for US$ 240m • Option to increase quickly to 320 kt/year acrylic acid for additional US$ 235m (beginning 2015) • Additional option within 5 years to acquire full production capacity (480 kt/year) for US$ 165m Key figures • · N US$ 600m expected FY sales contribution with 320 kt/year EBITDA margin expected to be in line with Arkema's mid-term targets ● Relutive from 1st full year ● Current financing resources sufficient to cover the deal ARKEMA INNOVATIVE CHEMISTRY#5Benefits of the project: a unique opportunity Compare favorably versus grass roots option • Reduced risks, lower costs and immediate access to competitive acrylic monomer sources • Planned acquisition will replace the capex previously scheduled in the 2017-2020 period Capture strong growth in acrylics in Asia (+7 to 8%/year) and support the development of: • Global and local customers on attractive end-markets (superabsorbents, paints and coatings, adhesives, water treatment, etc.) • Arkema's acrylic downstream businesses in the region: recent expansion of Sartomer in Guangzhou and start-ups of Coatex and Coating Resins in Changshu Well on track to achieve 2016 target of 30% of Arkema's sales in "emerging countries". Other ongoing projects in the region: • Construction of Thiochemicals platform in Malaysia • Expansion in Organic Peroxides in China and Middle East Ramp up of Hipro Polymers in China ■ Deliver solid contribution to Group's performance based on cautious assessment of acrylic acid supply/demand balance by Arkema ■ Maintain financial flexibility to continue to develop High Performance Materials segment ARKEMA INNOVATIVE CHEMISTRY#6Project highlights ARKEMA INNOVATIVE CHEMISTRY#7Attractive worldwide acrylic acid market ARKEMA INNOVATIVE CHEMISTRY Super Absorbent Polymers ("SAP") Hygiene (diapers) Demand by end markets Others Glacial acrylic acid ⚫ UV curing resins Rheology additives • Others (water treatment, Oil & gas, etc.) Super absorbents 33% 26% 26% 15% Coatings Coating materials Adhesives Adhesives Propylene Acrylic acid 7 Esters ("acrylates) • Water treatment • Plastic additives Expected growth 4 to 5%/year - Key growth drivers • Superabsorbents: • Water treatment: • Oil & Gas: • Coatings: baby diapers in Asia, ageing population in mature markets access to drinkable water and treatment of effluents enhanced recovery of oil low VOC products high growth countries expected rebound in housing in North America ARKEMA INNOVATIVE CHEMISTRY#88 Asia: 50% of worldwide acrylic acid market Global acrylic acid market: 4.8 mt (2013e consumption*) Europe 22% Chinese acrylic acid market: 1.2 mt (2013e consumption*) Asia and RoW Others 53% 25% of which China Acrylic polymers 6% UV-curing resins 6% Water treatment 6% 9% SAP 23% 10% 22% Adhesives Textiles 18% 25% North America Paints & coatings - Key growth drivers of Chinese market • Double digit growth in SAP Strong baby diaper market growth supported by increasing standard of living • Water treatment, UV-curing resins, acrylic polymers - Higher value niche markets with high growth rate (~10%/year) • Paints & coatings and adhesives Expected growth 7 to 8% /year - In line with GDP growth * Company estimates ARKEMA INNOVATIVE CHEMISTRY#9Description of Sunke's assets Jurong: #1 acrylic acid producer in China / #5 worldwide Sunke assets (Taixing site) Line 1 Line 2 Line 3* • Modern and competitive site started in 2012 400 well-trained employees • Existing 2 lines of 160 kt/year acrylic acid • Site's competitiveness to be further reinforced with the 3rd acrylic acid line (160 kt/year) currently under construction expected to start-up beginning 2015* 9 | *To be contributed to the JV once the construction is finalized. ARKEMA INNOVATIVE CHEMISTRY#1010 An excellent location Jurong - Taixing 200 km north west from Shanghai • In the Jiangsu province • On the Yangtze river • Industrial area with several international chemical players anshan 鞍山市 Changshu Hipro site Taizhou G25 Hai'ah Yangzhou 泰州市 Jiangyan 姜堰市 Luhe 扬州市 六合区 海安县 Rugao 如皋市: Rdong 如东县 G2501 G40 Zhenjiang Nanjing G312 镇江市 南京市 G42 G055 Mantong Tongzhou 南通市通州区 Jianye Jiangning 建区 江宁区 02 GAD Jiangyin Changzhou 江阴市 Yangtze 常州市 River G104 64011 长江 Xishan G25 Wujin 武进区 锡山区 G15 G40 Yixing 宜兴市 Wuxi 无锡市 G42 Suzhou Kunshan 苏州市昆山市 Jiading Baoshan 嘉定区 宝山区 Wuhu 芜湖县 Langxi 郎溪县 Changxing G318 长兴县 Huzhou 湖州市 650 G50 宣城市 Wuxing |吴兴区一 an Ningguo Jiaxing 嘉兴市” 660 宁国市 G15 G320 G25 Yuhang 余杭区 G92 Taihu Lake 太湖 G2 Wuzhong 吴中区 Shanghai Xuhui 徐汇区 上海市 Songjiang 松江区 Minhang 闵行区 61501 G104 Well positioned platform • Competitive access to raw materials (propylene, oxo-alcohols) through Yangtze river Good logistics to local and regional customers • Proximity to other Arkema sites G50 Gaochun 高淳县 Xuancheng ARKEMA INNOVATIVE CHEMISTRY#11Structure of the transaction - Creation of a production JV (« Sunke »>>) between Arkema and Jurong • Arkema has a majority stake in the production JV 2014 • Arkema's cash out: US$ 240m 160 kt 160 kt 160 kt* • Expected closing in summer 2014 subject to: - Approval by antitrust and administrative authorities in China Arkema Jurong - Completion of some administrative steps After start up of 3rd line Probably beginning 2015 160 kt 160 kt 160 kt • Option for Arkema to acquire a 2nd line • Cash out for Arkema: US$ 235m Arkema Jurong 2nd option (within 5 years) to acquire Jurong's remaining share for US$ 165m *Under construction ARKEMA INNOVATIVE CHEMISTRY#1212 | Strengthening Arkema's worldwide position in acrylic monomers ■ Becoming #3 worldwide and among the leaders in China ■ Global and balanced presence with world scale units in each region Clear Lake (TX) 270 kt Carling (F) 275 kt Bayport (TX) 65 kt * Taixing (CN) 160 kt (320 kt optional)** *Arkema's share of American Acryl NA, 50/50 JV with Nippon Shokubai ** Option to acquire remaining Jurong share within 5 years (160 kt) ARKEMA INNOVATIVE CHEMISTRY#13Key milestone in Coating Solutions development ARKEMA INNOVATIVE CHEMISTRY#1414 Arkema's strategy in Coating Solutions Secure competitive and world-scale acrylic monomer production base in each region • Solid European foothold supported by past optimization of Carling (France) • US$ 110 m investment program to expand and optimize Clear Lake (US) finalized beginning of 2014 • Acquisition of Jurong Taixing assets Strengthen downstream integration and development of specialty acrylic polymers • Organic growth developments in higher growth countries • Long-term partnerships with global leading customers Bolt-on acquisitions • New product developments and strong focus on innovation and sustainability ARKEMA INNOVATIVE CHEMISTRY#15Step by step development of acrylic chain UPSTREAM: acrylic monomers Europe N.America Asia New 2EHA line (Carling) Acquisition Clear Lake (ex Dow) • New ADAME line (Carling) New 2EHA line (Bayport) Capacity expansion (Clear Lake) Partnership with Jurong Taixing (China) Spin off 2007 2008 2009 2010 2011 2012 2013 2014 Acquisition Coatex Acquisition Dow emulsions • New Coatex unit (China) Acquisition Resicryl • Acquisition (Brazil) New Coating resins unit (China) DOWNSTREAM: acrylic polymers Europe Coating N.America resins Asia / Row Rheology additives UV-curing resins 15 Total resins ARKEMA INNOVATIVE CHEMISTRY#16Coating Solutions in Asia Changshu (China) Coatex (Rheology Additives) Coating Resins Taixing (China) Acrylic monomers Mumbai (India) Coating Resins Guangzhou (China) Sartomer (UV Curing Resins) Changshu (China) R&D center Pasir Gudang (Malaysia) Coating Resins 12 Manufacturing site R&D center ARKEMA INNOVATIVE CHEMISTRY#17177 | Disclaimer The information disclosed in this document may contain forward-looking statements with respect to the financial condition, results of operations, business and strategy of Arkema. Such statements are based on management's current views and assumptions that could ultimately prove inaccurate and are subject to risk factors such as among others, changes in raw material prices, currency fluctuations, implementation pace of cost-reduction projects and changes in general economic and business conditions. Arkema does not assume any liability to update such forward-looking statements whether as a result of any new information or any unexpected event or otherwise. Further information on factors which could affect Arkema's financial results is provided in the documents filed with the French Autorité des Marchés Financiers. Financial information for 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006 and 2005 is extracted from the consolidated financial statements of Arkema. Quarterly financial information is not audited. The business segment information is presented in accordance with Arkema's internal reporting system used by the management. The definition of the main performance indicators used can be found in the reference document filed with the French Autorité des Marchés Financiers and available on www.finance.arkema.com ARKEMA INNOVATIVE CHEMISTRY

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