KAOLIN: STATE OF THE INDUSTRY U.S. Clay Producers Traffic Association Spring Meeting March 22, 2011
Agenda Current Environment Kaolin Industry Coated Paper Markets Industry Outlook Magazines Coated Paper
Kaolin Current Environment
Major Producers
Source: Industrial Minerals, August Carbonates 9%2003 Carbonates 62%2014 Carbonates 65% Worldwide Pigment Usage in Paper
World Kaolin Sales by Market* *as of 2007
Coating Kaolin Production & Demand 2010 North America South America Europe Asia Japan CapacityDemand Total Capacity ≈ 9.1 mm tpy Total Demand ≈ 7.9 mm tpy
Coated Paper Current Environment
NA Coated Leaders Coated GroundwoodCoated FreesheetTOTAL NewPage Verso Sappi AbitibiBowater Kruger UPM-Kymmene Appleton Coated--350 Catalyst Paper Domtar Belgravia--234 Evergreen Other TOTAL %52%66%
NA CFS & CGW Shipments 3Q10 vs. 3Q09 = 8% Source: RISI and AF&PA 2Q3Q
US Coated Papers Utilization Rate Source: RISI
US Coated Paper Prices Source: RISI
Industry Outlook
Magazine Ad Pages % Change y-o-y Source: UPM & Zenith Optimedia
NA CFS Operating Rate Forecast Source: Risi & EMGE Balanced market
NA CGW Operating Rate Forecast Balanced market Source: Risi & EMGE
Recessionary Adjustments
Trends for Coated Paper Positive Magazine advertising pages up Catalogers increasing circulation Retailers using more direct mail Olympics Mid-term elections Negatives Electronic EVERYTHING Consumer confidence
Paper Growth Rates by Region 2006 through 2025
Questions? Cynthia Willcox Marketing Associate Thiele Kaolin Company