The Global Adhesives

Market

&

Pine Chemicals

Michiel Brink

Business Unit Director Adhesives

EMEA & Asia Pacific

Email: michiel.brink@azchem.com

Agenda

Introduction

The Global Adhesives Industry

● Key figures & macro trends

The Global Tackifier Industry

● Key figures & macro trends

Pine Chemicals Tackifiers & Value creation

Sustainability

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Introduction

3

The acquisition of Arizona by Kraton was completed on January 6, 2016

Kraton is a leading global producer of styrenic block copolymers (“SBCs”) and other engineered polymers, and through

its recent acquisition of Arizona Chemical, a leading global producer of high-value performance products and specialty

chemicals derived from non-hydrocarbon, renewable raw materials

The acquisition extends Kraton’s technology and market diversification

Arizona Chemical a Kraton company

Kraton’s expanded Global Footprint

Global Adhesives Industry overview

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Source: Chemquest 2014 report, Internal

Leading Adhesives Producers 2013 vs 2004

30%

19% 15%

14%

9%

3%

10%

Global Adhesives Submarket Overview

Other

Tapes

Flooring

Packaging

Assembly

Labels

Nonwoven

The Adhesives industry is projected to grow in line with global

GDP of ~3%, varying by technology & region

Some Macro Trends:

Submarket: New polymer systems (MPe) replacing EVA

systems in Packaging

Market consolidation: M&A among Adhesive producers

Globalization: More producers going pan-atlantic or

global and targeting significant shares in all regions

Asia Market: Largest market and growing at ~6%.

“Let’s look at an example driving this”

Adhesives Market Global

Total: ~ 13,000 KT (~ $30 billion)

Adhesives Regional Overview

2013 2004

Growth in Asia – an example

Who is familiar with November 11 (11/11) in China?

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Growth in Asia – an example

Students in China first celebrated Single’s Day in 1993.

It is an appreciation of being single.

The picked November 11 (11/11) - the loneliness of the number one.

6

China’s Singles Day e-shopping

surpassed Cyber Monday

(Monday after Thanksgiving

holiday) as the world’s biggest

online shopping day in 2012 Online spending

In $ billions

Growth in Asia – an example

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Alibaba reaches a Record $14.3 Billion in Sales for Singles Day last year.

120.000 orders a minute!

Distributed by 400.000 trucks & 200 airplanes

Global Resin Tackifier Industry overview

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Source: Chemquest 2014 report, Internal

Growth: Tackifer industry is

projected to grow in line with global

Adhesives Industry

New Polymers: these require new

tackifiers which excel in compatibility

and performance

Regulatory: Increased focused on

safety, health and environment

Globalization: Global product role-

outs

Crude Oil price: resulting in lower

feedstock cost for hydrocarbon

resins

Volatility: shorter cycles and higher

amplitude

Global Resin Macro trends Global Resin Supply by technology

Hot Melt is the prime adhesive technology which

requires a tackifier to perform

Hot melt adhesives are a major technology

comprising ~15-20% of the global adhesive market

But why would the adhesives industry choose for a

industrial pine chemical to tackify their Hot Melt?

“Let’s have a look at a value curve

example”

Pine Chemicals Tackifiers for Adhesives

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Source: Arthur D. Little, Chemquest, Internal

Adhesive Key Technologies

Definition: Industrial Pine Chemicals for

Adhesives are High Value Tall Oil Rosin Esters

and Terpenes Tackifiers derived from CTO/CST

through Biorefining.

Biorefining Value Chain Subject Matter

Where do we play?

Value Curve Example

The Starbucks story….one we are all familiar with.

The value curve below shows where competitors compete on

● ranking these from low to high importance

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Source: adapted from https://www.blueoceanstrategy.com/what-is-blue-ocean-strategy

Value Curve Example

This serves as an example only – but hopefully it encourages you to make your own.

A possible value curve view on Industrial Rosin Esters vs Hydrocarbon tackifiers.

“Now let’s look at the sustainability value in more detail”

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Renewable Raw Materials

Sustainability

The role of industrial pine chemicals for the adhesives industry:

Resource efficiency

● Reducing CO2 emissions

● Sustainable production

● Use of raw materials according to cascading principle

● Bio-based products

Helping our customers to achieve their sustainability goals

● Renewable raw materials used resource efficiently

● Low carbon footprint

● Bio-based tackifiers used in many different adhesives

Renewable Resources. Endless Possibilities.TM

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CTO refining is Intelligent BioEconomy

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accurate, but any recommendations, presentations, statements or suggestions that may be made are without any warranty or guarantee

whatsoever, and shall establish no legal duty on the part of any Kraton affiliated entity. The legal responsibilities of any Kraton affiliate with respect

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