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Lotte Chemical UK, PET & Sustainable Packaging Mark Kenrick CEO April 2012 환영.

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Presentation on theme: "Lotte Chemical UK, PET & Sustainable Packaging Mark Kenrick CEO April 2012 환영."— Presentation transcript:

1 Lotte Chemical UK, PET & Sustainable Packaging Mark Kenrick CEO April 2012 환영

2 Agenda Introduction to Lotte Wilton & LCUK The Polyester and PET Market PET & Sustainability Summary

3 Established: 1948 No. of Affiliates: 44 Main Affiliates: LOTTE Confectionary LOTTE Trading LOTTE Ice Cream, et c Established: 1967 No. of Affiliates: 60 Main Affiliates: LOTTE Confectionary, LOTTE Shopping LOTTE Hotel Lotte Group Structure Mr. Kyukho Shin Founder & Chairman LOTTE Petrochemicals – Honam & KP

4 1998 $8bn ’10 ’05’90’85’67 ’18 ’00’95 1984 US$1bn 2003 $20bn 2005 $30bn 2011 $70bn 2008 $43bn ∼ ∼ ∼∼ 2009 $48b n 2000s (Globalization) 1990s (Expansion) 1980s (Growth) 1970s (diversification) 1960s (Beginning) 2018 (Target $ 200bn milestone ) Lotte History & Timeline

5 Lotte Group carries out business in 24 countries including Vietnam, Russia, India, Indonesia, China, etc with more than 120 corporations Lotte Vietnam Vietnam Lotteria Lotte Vietnam Shopping BIBICA Corp. P.T. Lotte Indonesia PT Makro Indonesia Thai Lotte Co.,Ltd. Lotte India Lotte Food India Lotte Shopping India Pvt.,Ltd Lotte Shopping Rus Lotte Confectionery Rus Lotte Liquor Japan Lotte(China) Investment, etc (25 corp) United NCRI-Lotte Construction Corp. Lotte U.S.A. Guylian Lotte BG America Pakistan PTA Limited Lotte International America Lotte Group International LCUK

6 LSR HSRMX Ethylene PEEG Propylene PP Mixed C4 BD MMA BZ SM Cracker PX MeX OX BZ PTA PET PIA Reformer PA PC SM Naptha Splitter Naptha Crude Oil Kero -sene Diesel B-C Etc LPG Gasoli -ne 6% 11% 14% 8% 2% 29% 30% Refinery PMMA PC Lotte Petrochemical Division

7 The Wilton Site & Lotte Chemical UK Ltd

8 History Of Wilton Site 2000 acres / 800 hectares = 1300 football pitches with 12.5 km perimeter fence 35,000 employees on site in 1960s, approx 4,000 in 2010 £1.25Bn investment 2000 – 2010 1st Multi Company Site In UK to be awarded British Safety Council Sword Of Honour Evolution of Wilton illustrates evolution of Global Chemical Industry Globally owned companies 40s50s60s70s80s90s2000s2012 Established 1946 DuPont (Nylon & Polyester) Huntsman Union Carbide Enron Invista DuPontSA / Advansa / La Seda (Artenius) Sabic Huntsman Dow Croda pX SCUK Sabic (KSA) LCUK (Korea) Sembcorp (Singapore) Ensus (UK) Huntsman (USA) Yara (Norway) BIFFA (UK) GDF Suez (France)

9 Evolution of LCUK Ltd Jan 98 Resin & Inters DuPont Polyester Technologies May 04 Sept 03 Jan 00 Nov 04 Oct 06 SA Renamed Feb ‘07 Feb 10

10 What Does LCUK Do? Bottles Containers Sheet Film Staple Filament Woven FIBRE & PACKAGING PARAXYLENEAROMATICS CRUDE OIL LCUK PTA PET

11 LCUK Production Plants – T8 & M5 T8 PTA plant –Commissioned in 1981, uprated in 1989 & 2004 –Original Capacity 250 ktpa –Current capacity 500ktpa –Based on BP Amoco/ICI Technology –Effectively 2 Plants plus significant environmental protection processes M5 PET Plant –Built 1996 & uprated in 2001 –Original design rate = 240tpd –Current rate = 450tpd / 150ktpa –Based on DuPont / ICI / Buhler technology LC1 PET Plant –New plant announced 2011 –200ktpa –On line Q3 2013

12 Location Of New LCUK 200 kt pa PET Plant

13 PET offers a unique combination of gloss, transparency, durability and impact resistance (safe!) Melinar ® LCUK PET is processed into bottles, jars & trays for soft drinks, water, other foodstuffs, cosmetics, medicines In terms of sustainability PET is packaging material of choice –Fully recyclable within domestic recycle systems –Lightweight enabling much lighter packaging weights –Full Life Cycle Analysis shows excellent comparison with other materials –Significant contribution to enabling UK to deliver Courtald 2 commitment –LCUK Melinar ® Laser + resin offers reduced energy consumption in use without compromising optical clarity Fully compliant with European and USA Food Contact and Pharmacopia legislation Extensively used within the Northern European region and fully endorsed by major brand owners –Around 50% of major UK brand bottled drinks are in LCUK PET Please remember to recycle your PET bottles! LCUK & PET

14 Polyester Fibre & Bottle Resin Markets

15 Global Polyester Production (Fibres + Bottle Resin + Film) GlobalChina 50% Of Global Polyester Polymer Capacity 65% Of Global Polyester Fibre Capacity Growth at 3-4x ROW

16

17 Interconnected & Complex Influences On The EU PET Market Asia & In Particular China –Dominance of China in global polyester dynamics –Impact of Chinese monetary policies & subsequent growth –Sheer scale and impact of small % variance in growth forecasts Market Forces (incl. raw materials) –Seasonality –Inherent Supply – Demand –‘Sustainable packaging’ impact €:$ Exchange rates –Relative (un)attractiveness of imported raw materials and PET –Impact on raw materials prices Raw Materials –Paraxylene –MEG ‘One Off’ or Random Events –Cotton harvest –Natural ‘disasters’ –Eurozone or other financial crashes => GDP

18 PET & Sustainability

19 The Future Of PET? Already implied that PET is used mainly in food packaging (bottles / trays) and has been marketed extensively as the ‘greenest (plastic)’ packaging material Major brand owners have or are developing sustainable packaging credentials –Coca Cola Plant Bottle => Heinz & Danone –Pepsi BioPet Bottle 2012 –Nestle, Danone & various supermarkets So new PET product developments are already, and will continue to focus on the sustainability agenda: –Next Generation Fast Reheat Resin (Downstream energy reduction) –Post Consumer recycle suitability and options –Sustainable raw materials namely Bio sourced Alternative polymers will start to be meaningful and displace PET –G2 PLA –Polyethylene furans –Polyglycolic acids

20 Post Consumer Recycle Options LCUK already endorses the PET sustainability theme via –Industry leading Reheat grade (speed - optical clarity balance) & development of its replacement –The inclusion of an element of post consumer recycle material and already markets a V- PET:R-PET blend To-date the combination of cost, raw material quality, processing issues, convertor push back etc has resulted in little real PCR penetration into bottle applications –3000 ktes of PET produced in EU in 2010 –1400 ktes of PET collected –220 ktes reprocessed back into food contact bottles (B2B) If PCR is to establish within B2B applications it will require a dedicated joint development programme between resin producer and brand owner and will probably remain small scale –Many claimed 100% Recycle PET bottles now disappeared Next stage is inclusion of R-PET flake into the production process to replace raw materials –Requires significant further investment

21 Bio Raw Materials Bio sourced raw materials are now high profile endorsements by Coca Cola, Nestle, Danone etc and it is envisaged that additional Brand Owners will declare a similar intent within 2012 Current Bio-PET or BPET is focussed on bio-MEG from bio–ethanol –Brasil -> India -> EU = sustainable? –Brand owners seem to have major issues with food conflict with other bio-ethanols? LCUK involved in Bio-MEG / Bio-PET development –Advanced discussions to secure own sourced Bio-MEG for short & medium term –KP producing Bio-PET in Korea mainly for use in cars in Asia –LCUK keen to explore possibilities to do same Bio-PTA is a more distant proposition –Virent claim BioFormPX(TM) from biomass / cane / corn –100,000 gallons pa scale at present, commercial scale by 2015 Goal has to be bio raw materials from waste and as far a ‘closed loop UK’ as is possible

22 Summary LCUK grew from the ashes of the assets of Artenius UK Ltd in administration in Q1 2010. It is owned by a chemical subsidiary of one of Korea’s largest conglomerates with plans to grow to $200Bn turnover by 2018 IN 2011 LCUK sanctioned investment for an additional 200 ktpa PET resin plant to be built at Wilton – on line late 2013 PET is currently the packaging material of choice in many applications due to a combination of appearance, ease of use, lightweight, recyclability, LCA considerations This position could come under pressure from new bio-polymers if the sustainability agenda is not grasped – but 20M tes of PET globally will take some replacing! Sustainably sourced raw materials are vital to that process with ‘food crop’ Bio- sourced raws a first step Very interested in ‘closed loop UK’ solutions where possible and practical


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