How Will Your Ability To “Survive” In the Downturn

Enable You To “Thrive” In The Upturn

Pierre Minguet – Business Director, Polystyrene

April 2010

2

Agenda

� Context of Changes

� The case of the “Polystyrene Industry”

� Volatility

� The Supply Chain Equation

� Knowing the Business, in detail.

� The place of the Customer.

� Key take-away.

3

A World of Change

And You Know What ?

4

The Polystyrene Industry has changed

Total : 685 kta or 22 % of 2005 capacity

3090 kta in 2005

Dow Barry, UK, Nov 05 (75 kta)

Linpac, UK, Jun 06 (35 kta)

INEOS NOVA, UK, Oct 06 (180 kta)

BASF Tarragona, Dec 06 (70 kta)

Total Gonfreville, Dec 06 (40 kta)

2405 kta

Dow Terneuzen, Dec 08 (50 kta)

Dow Bilbao, May 09 (65 kta)

BASF Ludwigshafen, Jun 09 (80 kta)

INEOS NOVA, NL, Sep 09 (90 kta)

5

The ‘Fixed Points’ and …

IN

Dow

Polimeri

Total

Synthos

BASF

6

De

man

de

PS

Eu

rop

e 2

007-2

009

50

60

70

80

90

10

0

11

0

janv-07

févr-07

mars-07

avr-07

mai-07

juin-07

juil-07

août-07

sept-07

oct-07

nov-07

déc-07

janv-08

févr-08

mars-08

avr-08

mai-08

juin-08

juil-08

août-08

sept-08

oct-08

nov-08

déc-08

janv-09

févr-09

mars-09

avr-09

mai-09

juin-09

juil-09

août-09

sept-09

oct-09

Sourc

e : E

stim

atio

n In

eos-N

ova

(Base 1

00 -

Ja

nu

ary

2008)

Vo

latility

Sourc

e : E

stim

atio

n In

eos

Nova

7

The Logistics Equation

FASTER + CHEAPER = BETTER

AND clearly, three significant Sources of Value are also :

• Flexibility• Safety / Stewardship• Service

8

“Nicole”

� Customer Focus:

� One Single Point of Accountability for the Sales Force in the Supply Chain Area.

• Nicole is the point of Engagement with Service Providers.

� The “BAR” session

• Platform for discussing logistics issues with the Business.

� Customer Survey to measure your position relative to competition.

� You may not like the outcome but,

� It drives solid improvements to your business !

9

The Analytical Side of Supply Chain

Volum

e

Margin by Customer

Knowledge of margin by customer, by plant (ship-to), by grade, by pack type

Margin

Cumulative Sales Volume

10

Information Management

� The Flow of “Information” is as important as the flow of “Products”.

� Reliability of data is key …. Variable Costs, Timeslots,

� Cannot operate a system being blind …. ATP

� Quest for Greater Efficiency …. Fixed Costs

11

Summary & Key Messages

� Tough market which requires flexibility from our Supply Chain Partners.

� Structurally

� On a month to month basis.

� The Long Term seems often to be a year.

� Sources of Value are Costs, Speed, Safety

� Availability and Integrity of data to support analyses

� Customer focus

� Benchmark yourself versus your competitors

� Efficiency of our Collaboration for Mutual Business.