1. Asociación de Industrias Químicas y de Proceso de Asturias Brussels, 13th February, 2008 1/16 Emerging Chemical Markets from a European Downstream User Perspective

2. Asociación de Industrias Químicas y de Proceso de Asturias Brussels, 13th February, 2008 2/16

3. Asociación de Industrias Químicas y de Proceso de Asturias Some Facts and Figures... Market Share: 32 % (EU27) World’s leading exporter and importer of Chemicals Main trading partners: North America, Central and Eastern Europe, Asia Euro / US dollar exchange, undermines Europe’s competitive position 96 % SMEs 12 of the 25 biggest chemical companies, based in Europe Brussels, 13th February, 2008 3/16

4. Asociación de Industrias Químicas y de Proceso de Asturias Some Facts and Figures... Chemical producers are the beginning of a Value Chain that supplies virtually every other manufacturing sector: Brussels, 13th February, 2008 4/16

5. Some Facts and Figures... Asociación de Industrias Químicas y de Proceso de Asturias Brussels, 13th February, 2008 5/16

6. Asociación de Industrias Químicas y de Proceso de Asturias Europe’s Leading position can not be taken for granted... Brussels, 13th February, 2008 6/16

7. Asociación de Industrias Químicas y de Proceso de Asturias Europe’s Leading position can not be taken for granted... Brussels, 13th February, 2008 7/16

8. Asociación de Industrias Químicas y de Proceso de Asturias Brussels, 12th, 13th February, 2008 15/21 Where European Competitors come from ?...... Low Cost Countries (LCC) 15/21 Asociación de Industrias Químicas y de Proceso de Asturias... China and India... BRIC: (Brazil, Russia, India, and China)... Eastern Europe... Middle East and North Africa... The Next Eleven: (Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, Phillipines, Turkey, Vietnam ) Asociación de Industrias Químicas y de Proceso de Asturias Brussels, 13th February, 2008 7/16

9. Asociación de Industrias Químicas y de Proceso de Asturias Why Looking for Chemicals in Low Cost Countries ?...... A better balance between cost and quality... A more flexible production... A stronger negotiation position... Possitioning in fast growing markets Brussels, 13th February, 2008 9/16

10. Asociación de Industrias Químicas y de Proceso de Asturias Why continuing purchasing from Europe ?...... Safeguard Intellectual Property... Technological limitations... Country related risks... Be close to the users site... Supply and deliveries risks... Existing facilities Liabilities... Costs of shifting into LCC... Bad image costs in Home Countries Brussels, 13th February, 2008 10/16

11. Asociación de Industrias Químicas y de Proceso de Asturias Why Looking for Chemicals in Low Cost Countries ?... Price Issues...... Lower labour costs... Lower capital investment costs... Lower local sourcing costs... Government incentives... Higher productivity... A company purchasing in LCC may get a 20 % - 40 % inmediate reduction in the cost of the goods Brussels, 13th February, 2008 11/16

12. Asociación de Industrias Químicas y de Proceso de Asturias Why Looking for Chemicals in Low Cost Countries ?... Quality Issues...... Low cost is not low quality... Skill and motivated workers make quality improvements... LCC offer are shifting into more added value products Brussels, 13th February, 2008 12/16

13. Asociación de Industrias Químicas y de Proceso de Asturias Why Looking for Chemicals in Low Cost Countries ?...... Flexibility... Increasing R&D Capabilities...... Integration to more Added Value Products... Transfer of Technology (patent issues) Brussels, 13th February, 2008 13/16

14. Asociación de Industrias Químicas y de Proceso de Asturias Why Looking for Chemicals in Low Cost Countries ?... Regulatory Issues...... The EU legal Framework... What is the goal of every private company? Brussels, 13th February, 2008 14/16

15. Asociación de Industrias Químicas y de Proceso de Asturias Imports from Emerging Markets in Asturias 2000 – 2005... Brussels, 13th February, 2008 15/16

16. Asociación de Industrias Químicas y de Proceso de Asturias Emerging Chemical Markets from a European Downstream User Perspective Thank you for your attention Brussels, 13th February, 2008 16/16