1. China Plastics Industry Conference Ningbo, China May.30 th -May.31 st 2012 Soumen Bhattacharya Country Head China Vinmar International Ltd. Integrating Markets of India with China

2. Vinmar International Ltd.  www.vinmar.com  Plastics & chemicals  1978: founded in New York City  1985: relocated to Houston, TX - Headquarters  Global marketing, distribution and project development  25 offices in 19 countries: local people / global network  Sales of US$ 4.5 bi in 2011

3. Vinmar International Ltd.  PP  HDPE  LLDPE  LDPE  PVC  PET  SBR  Others  Monomers  Alcohols  Fiber intermediates  Aromatics  Solvents  Chloralkali  Others  Gas liquids / LPGs  Biofuels / Blend Components Plastics Chemicals Primary Fuels

4. Vinmar International Ltd. Global overview China : A growth engine Conclusion India : Emerging opportunities

5. Vinmar International Ltd. Global chemical industry – Drivers & consumers The chemical industry consumes 26% of its own output

6. Petrochemicals dominate world chemical industry with $ 1.3 tr turnover Vinmar International Ltd. Global chemical industry US$ 3.3 trillion

7. Major capacities concentrated around Middle East, Asia-Pacific Vinmar International Ltd. Shift in world petrochemical industry in 1990s West of Suez 1950 - 1990 1990 onwards Industry born & matured in WOSEOS provides next fillip to growth

8. MNC production base shifting from Europe and NA to North East Asia Vinmar International Ltd. Region-wise share in global production - 2010

9. India, dominant position in South Asia, is one of fastest growing chemical market Vinmar International Ltd. Global Chemical trend : 3.3% Chemical growth % GDP growth % Growth Trends : Chemicals Vs GDP 2020

10. World looks at Asian markets for more integration & growth Vinmar International Ltd. Chemical industry remains vibrant

11. China ethylene capacity forecast to increase 47% from 2010-2015 Vinmar International Ltd. China’s ethylene capacity increase (2009 -15E)

12. China’s GDP growth rate will slow down, but still strong Vinmar International Ltd. Chemical sector a key driver & beneficiary of growth

13. Chemical industry is the third largest in China Vinmar International Ltd. (% share, by value, 2010) Lion’s share in chemical manufacturing pie

14. Fine & specialty chemicals will see faster growth than bulk chemicals Vinmar International Ltd. China on high-value trend

15. Vinmar International Ltd.  China witnessed accelerated growth in petrochemicals demand since the 1990s to cross 43 MMT in 2010  China also remains the largest importer of petrochemicals globally to supplement its domestic petrochemical production  The country is also the world’s largest exporter of value-added petrochemical finished products like articles of plastic  In the last decade, most of the exportable surplus of petrochemicals has been absorbed in China  China will remain a significant importer of petrochemicals, although this is expected to decline as the country aims for self-sufficiency China – mega appetite for petrochemicals

16. Despite strong growth in capacity, self sufficiency by 2015 will go from 65% to 70% Vinmar International Ltd. China plastic demand: 2001-2012

17. Vinmar International Ltd. China chemical industry – growth drivers

18. China is a policy-driven country with an eye for results Vinmar International Ltd. China 12th Five-Year – Paramount growth driver

19. 75% urbanization by 2030 will trigger demand in all kinds Vinmar International Ltd. Urbanization to fuel chemical demand

20. Vinmar International Ltd. China’s 12th Five-Year Plan: Seven Priority Industries Chemical sectors affected (some examples) 1New energy Strong potential for pull demand in performance materials and composites, as well bio-plastics (e.g. PA11) 2Energy conservation and environmental protection Water-treatment chemicals, process improvement technologies, polymers (as a substitute for metals) 3Biotechnology Potential push effect for catalysts, industrial cleaning technologies, bio- feedstock 4New materials Rare earth chemistry and high-end semiconductors (silicon derivatives, specialty materials) specifically targeted 5New IT Demand for performance materials and composites, performance resins and polymers, electronics materials 6High-end equipment manufacturing Demand for performance materials and composites, performance resins and polymers, electronics materials 7Clean energy vehicles Rare earth, TiO2, Lithium related chemistry. Performance polymers and resins, composites Sustainability: driving high-end demand

21. Government to build 36 million units by 2015 Vinmar International Ltd. Surge in public housing investment in 2011

22. Emphasis on quality to ensure better, hygienic packaging Vinmar International Ltd. Food demand is set to increase in China

23. Generic agro firms exposed to agricultural chain see huge opportunity Vinmar International Ltd. Rising grain production – a derived demand

24. Time to step up collaboration Vinmar International Ltd. The Elephant & The Dragon

25. India-China trade to hit USD 100 billion by 2015 Vinmar International Ltd. India and China – Growing trade ties

26. High commodity prices challenge  for Indian economy Vinmar International Ltd. (%)2010-112011-122012- 13 GDP (Factor Cost) 8.46.97.0 GrowthAgriculture5.02.73.0 Industry8.68.25.6 Services9.49.68.7 Total8.46.97.0 InflationWPI-Average8.0-8.59.26.2 Interest rate10-year G-Sec8.1-8.38.57.5-7.8 Exchange rate Re / US $ Year-end) 43.5- 44.0 4846.5 Fiscal deficitAs a % of GDP 5.05.95.5 Source: CRISIL Indian Economy

27. Vinmar International Ltd. Economies20082009 20102011 World 3.0-0.6 4.64.3 Advanced Economies 0.5-3.2 2.62.4 United States 0.4-2.4 3.32.9 Euro Area 0.6-4.1 1.01.3 Japan -1.2-5.2 2.41.8 Developing Economies 6.12.5 6.86.4 China 9.69.110.39.2 India 6.35.78.66.9 Brazil 5.1-0.2 7.14.5 Annual percentage change India and China set to grow faster than other regions

28. India’s polymer growth higher than GDP growth Vinmar International Ltd. GDP Growth Polymer Growth Import Duty 1990-19955.00%12.90%50%+ 1995-20006.50%14.60%40% 2000-20055.90%5.80%45%-10% 2005-20108.70%10.90%10%-5% 2010-20159.00%10.50%5%-0% 2015-20209.50%10.50%5%-0% Strong GDP Growth for 10-11 Advantage India

29. Vinmar International Ltd. China-India: A comparison 2010-Fast Facts2030- Projections Parameter ChinaIndiaChinaIndia Global GDP Rank (market exch. rate) 3rd12th2nd4th Global GDP Rank (PPP) 2nd4th2nd3rd Per capita income(US$) 3,1801,03210,7008,900 Share in Global Population 21%18%19%22% Share in global trade 8%2%8%6% Total trade (US$bn,2008) 256143798244500 Length of coastline (km) 180007000180007000 Total rail track (km) 86,00063,140200,000130,000 Total highway length(millionkm) 1.430.071.80.9

30. Vinmar International Ltd. Growth triggers –Strong Economy –High GDP growth –Favorable Demography –Growing Middle Class –Rising Disposable Income Policy thrust –Export through SEZ –Agriculture –Infrastructure Retail Revolution (Kt)DemandImports% Deficit 199089652959% 1995181762935% 200032952217% 2005477070415% 20107580129619% 201512392458637% 2020202921226960%

31. Retail Revolution setting pace for growth in packaging Vinmar International Ltd. Growth Drivers Food / Processed food FMCG items Packaged and fast food industry Applications Multilayer films BOPP Films Shrink & Stretch wraps Thin wall molding Thermoforming

32. Government spending in Infrastructure is increasing every year Vinmar International Ltd. Growth Drivers Building and construction Public Utilities services Mega highway projects Rural Electrification Projects Applications Pipes (Gas, Water supply, Sewerage) Storage Tanks Profiles Geotextiles Demand Drivers – Infrastructure

33. Bringing about the 2 nd green revolution Vinmar International Ltd. Micro-irrigation - Precision Farming in agriculture Key Focus Areas –Drip Irrigation, Micro sprinkler system, sprinkler irrigation systems Use of plastics in agriculture produce to be encouraged to boost productivity and reduce damage during transportation and storage. Demand Drivers – Plasticulture

34. Numerous sectors with healthy growth rates Vinmar International Ltd. Agriculture Rigid Packaging Edible Oil / Lube Oil Pesticides / Chemicals Caps & Closures Automotive Appliances Medical Hygiene & Personal Care Industrial Applications Other Growth Areas

35. Large market creates inherent demand for petrochemicals Vinmar International Ltd. MillionsSource2011E 2020E White goodsCTVCrisinfac13.620%60 RefrigeratorCrisinfac5.18%14.3 Air conditionerCrisinfac2.613%18 Washing MachinesCrisinfac2.514%9.1 TransportationCarSIAM1.718%9.7 Commercial VehiclesSIAM0.4330%5.4 Two wheelersSIAM8.966%30 InfrastructureElectricity (Bn Units)MoSPI77313%1870 Steel (MT)MoSPI55.111%130 Coal (MT)MoSPI540.616%1380 Cement (MT)MoSPI193.513%509 Airline PassengersDGCA43.228%452 Mobile subscribers (Additions)TRAI16024%5000 Polymers Industry810%20 Rise in consumption

36. Vinmar International Ltd. SectorMachinesInstalledExpected Investments RequiredCapacity (No.)(KT)Mn Dollars 2014-15 IM4723680 BM6379241 Extrusion17281323744 Grand Total708920941464 2016-17 IM5366773772 BM76711049 Extrusion20571562895 Grand Total819124451716 2021-22 IM785011301131 BM120717477 Extrusion299022891322 Grand Total1204735932530

37. Vinmar International Ltd. Government of India is developing PCPIRs to promote investment. Each of the region, situated on coastline, will have a mother refinery State-of-the art infrastructure and support to boost manufacturing Availability of feedstock next door, networking and efficiency through common facilities Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) Indian verbund

38. Eastern India can get in the forefront of attracting FDI Vinmar International Ltd.  Growing infrastructure investment and availability  Strong communication development  Growing consumer demand  Resource availability  Technical and skilled manpower  Secure and reliable banking system  Liberal Forex regime  Increasing relaxation of FDI laws India’s attraction for overseas investors

39. Vinmar International Ltd.  India can capitalize on its physical proximity to China  Mineral rich India can use its resources for meeting China’s needs  China losing its low cost labour and cheap manufacturing advantages – opportunity for eastern India to export competitive labor-intensive plastic products  Essential requirement is better connectivity China proximity - Growth opportunity

40. Vinmar International Ltd. Irreversible shift of industry to Asia. Economic growth in the region accelerating demand growth for petrochemical products. India, the major player in South Asian Region. Present low per-capita demand for plastics offers huge opportunity. Logistics and infrastructure still remain a challenge. Rise of several global players in the region will certainly make it an exciting. Mounting pressure from environmental activists to regulate growth. Conclusion