TECHNOLOGY & LICENSING STRATEGY IN A CHANGING ETHYLENE VALUE CHAIN LANDSCAPE

Transcription

1 TECHNOLOGY & LICENSING STRATEGY IN A CHANGING ETHYLENE VALUE CHAIN LANDSCAPE Global Refining & Petrochemicals Congress Mumbai, May 2017 Martijn Vogelzang & Guido Crevecoeur

2 TECHNOLOGY & LICENSING STRATEGY IN A CHANGING ETHYLENE VALUE CHAIN LANDSCAPE Main topics: 1. Changes in the ethylene landscape Supply-demand Capacity Net trade 2. SABIC s strategic response Investments in new capacity 3. SABIC s Technology & Innovation strategy Process & product technology Licensing of proven technologies No. 1

3 SABIC RANKS AMONG THE TOP PRODUCERS WORLDWIDE #1 #2 #3 Mono-ethylene glycol MTBE Polycarbonate Polyphenylene ether Polyether imide NPC [MMT] Methanol Polyethylene Polybutylene terephthalate Engineering plastics and its compounding NPC [MMT] SABIC SINOPEC Royal Dutch/Shell Formosa Group Dow Japanese MEG Conso Kuwait Government NPC-Iran Reliance Industries PTTGC SAR_Public Henan Yonjin Chem. Exxon Mobil Corp. CNPC INEOS MEG DEG TEG Global MEG Nameplate Capacity DOW EXXONMOBIL SABIC SINOPEC LyondellBasell CNPC NPC IRAN CHEVRON PHILLIPS INEOS BOREALIS NOVA FPG TOTAL PC LOTTE CHEMICAL ADNOC LDPE LLDPE HDPE Global PE Nameplate Capacity SABIC is a major player in the ethylene value chain Data source: IHS Markit and SABIC proprietary intelligence No. 2

4 CHANGED ETHYLENE LANDSCAPE Ethylene Production [MMT] Ethylene Production by Source & Region Compounded Annual Growth Rate (CAGR) Region Period Naphtha Ethane Propane Butane Gas Oil MTO CTO NA -->16-16% 4% -1% 14% -21% -->22-7% 7% 1% -6% 0% SA -->16-2% -1% 7% -100% -->22 2% 2% -6% EUR -->16-3% 2% 13% 8% -2% -->22-1% 6% 0% -1% -3% CIS -->16 0% 12% 13% 12% -2% -->22 6% 7% 29% 24% 11% ME -->16 6% 6% 4% 19% -->22 0% 3% 1% 2% -100% AFR -->16-100% -4% 4% -4% -->22 9% 5% -4% INS -->16 8% 10% 12% -->22 6% 9% 5% 18% NEA -->16 1% 21% 4% 6% 76% -->22 1% 7% 3% 2% 12% 25% SEA -->16 4% 6% 2% 4% 13% -->22 7% -3% 9% 10% 11% - NA SA EUR CIS ME AFR INS NEA SEA Naphtha Ethane Propane Butane Gas Oil MTO CTO Other MTP Ethane is the strongest growing feedstock: Ethane growing strongly in NA (shale gas) and in ME Naphtha shrinking in NA and EUR but still growing in Asia MTO (methanol-to-olefin) and CTO (coal-to-olefin) growing in China, but remain small compared to ethane and naphtha Data source: IHS Markit No. 3

5 C2 DERIVATIVES DEMAND CONTINUES TO SHIFT TO ASIA Domestic Demand [MMT] MEG & PE Global Demand Growth by Region Compounded Annual Growth Rate (CAGR) Region Period MEG LDPE LLDPE HDPE NA -->16-1% 1% 2% 1% -->22 2% 2% 3% 3% SA -->16 4% -1% 1% 1% -->22 1% 3% 3% 3% EUR -->16 0% -1% 2% 1% -->22 0% 1% 2% 1% CIS -->16 3% 1% 5% 3% -->22 3% 2% 4% 2% ME -->16 6% 2% 5% 5% -->22 3% 3% 4% 4% AFR -->16 1% 3% 7% 5% -->22 23% 2% 4% 4% INS -->16 5% 8% 10% 7% -->22 4% 7% 10% 8% NEA -->16 5% 5% 7% 6% -->22 4% 4% 6% 5% SEA -->16 0% 2% 6% 5% -->22 3% 4% 5% 5% Demand of main ethylene derivatives NEA, NA and EUR are the world s largest markets for MEG and PE INS is the fastest growing region, followed by NEA These regions continue to grow in the - period at or just below the speed of the past 6 years Data source: IHS Markit NA SA EUR CIS ME AFR INS NEA SEA MEG LDPE LLDPE HDPE No. 4

6 CAPACITY LOCATIONS FOLLOW BOTH DEMAND AND FEEDSTOCK LOCATIONS Capacity [MMT] MEG & PE Global Capacity Growth by Region NA SA EUR CIS ME AFR INS NEA SEA MEG LDPE LLDPE HDPE Compounded Annual Growth Rate (CAGR) Region Period MEG LDPE LLDPE HDPE NA -->16-1% 1% 1% 2% -->22 9% 5% 8% 5% SA -->16 0% -1% 0% 0% -->22 0% 0% 1% 1% EUR -->16 0% -1% -1% -2% -->22 0% 0% 0% 0% CIS -->16 3% 1% 0% 6% -->22 10% 6% 23% 15% ME -->16 2% 8% 3% 7% -->22 2% 4% 3% 2% AFR -->16 0% 2% 1% -->22 0% 4% 3% INS -->16 1% 0% 6% 3% -->22 12% 19% 11% 6% NEA -->16 8% 3% 5% 4% -->22 8% 6% 4% 3% SEA -->16 0% 1% 10% 1% -->22 5% 0% 5% 4% Capacity growth for MEG and PE After slow or even negative growth over the past 6 years in NA, growth is now accelerating Capacity growth in ME continues, but at a somewhat lower pace than in recent years Highest capacity growth in INS, driven by demand growth and liquid feedstock from new refineries Capacity growth in NEA remains robust Data source: IHS Markit, Capacity includes Hypothetical Capacity No. 5

7 NA EXPORT GROWTH ACCELERATES Net Trade [MMT] MEG & PE Global Net Trade by Region NA SA EUR CIS ME AFR INS SEA NEA MEG LDPE LLDPE HDPE Compounded Annual Growth Rate (CAGR) RegionPeriod MEG LDPE LLDPE HDPE NA -->16 7% 1% -4% 9% -->22 19% 19% 26% 16% SA -->16-2% 5% 2% 1% -->22 11% 4% 7% 9% EUR -->16 0% 17% 12% -->22 4% -53% 2% 5% CIS -->16-1% 6% 10% -11% -->22-20% 20% ME -->16 1% 14% 7% 12% -->22 1% 4% 3% 1% AFR -->16 1% 4% 13% 9% -->22 23% 3% 4% 4% INS -->16 7% 11% 7% 4% -->22-3% 2% 7% 9% SEA -->16 1% 50% -->22 33% 6% 15% NEA -->16 1% 17% 2% 11% -->22 6% 4% 17% 7% Trade flows shift from ME to NA NA sees explosive growth in exports ME remains the largest exporter, but has to yield most of the growth to NA and will see a CAGR of only a few percent for its main ethylene derivatives NEA continues to be the largest importer and maintains robust growth Data source: IHS Markit No. 6

8 HOW SABIC REACTS TO THESE NEW REALITIES ExxonMobil still working towards joint USGC cracker project with SABIC SABIC to convert Wilton cracker to ethane-based in two phases SABIC, Aramco crude to chemicals JV expected to shape by SABIC eyes coal-based China petchem complex joint venture SABIC strategy: Meeting regional demand growth Feedstock diversification Portfolio differentiation Invest in technology for autonomous growth Data source: Platts; ICIS No. 7

9 TECHNOLOGY & INNOVATION FOCUS Sustained efforts in New and improved technology Differentiated products within a commodity portfolio World-class infrastructure and know-how Five key geographies with innovation hubs in USA, Europe, Middle East, Indian Subcontinent, North East Asia Practical innovation Application development with key customers at the heart of our strategy More than 150 new products created every year Backed by 10,960 global patent filings No. 8

10 EXAMPLE OF TECHNOLOGY INNOVATION 500 kta CO 2 purification plant at SABIC affiliate United in Saudi Arabia US Patent issued to SABIC CO 2 is used in production of urea and methanol and is sold into the food & beverage industry No. 9

11 PRODUCT INNOVATION IN FOOD PACKAGING 1. Extrusion coating grade from CTR tubular LDPE technology production RESIN PRODUCER EXTRUSION COATER FILLER CONSUMER UNIQUE MWD DISTRIBUTION MADE IN CTR PROCESS PROCESSABILLITY: High line speeds Thin coating layers Improved adhesion BETTER HOTTACK & SEALING 2. New SABIC LDPE film grade produced in CTR process Excellent draw-down ability as low as 12 μm Higher production line speed Can be used in both mono and co-extruded film Provides full compliance with stringent food contact regulations for both fatty and non-fatty foods COMPLIANT TO REGULATIONS ADDITIVE FREE CTR =Clean Tubular Reactor No. 10

12 PROCESS & PRODUCT TECHNOLOGY STRATEGY IS KEY SABIC is revisiting its technology strategy: Main Drivers: 1. Maximise use of proprietary technology in new projects, leveraging: CAPEX/OPEX improvements for chemicals Enhanced product development on selected polymer technology platforms 2. Monetise SABIC s proven technology portfolio, through: Active licensing of SABIC technology to 3 rd parties, combined with: R&D efforts and Technical Service Sharing of Operational Excellence (where applicable) Catalyst sales 3. Explore opportunities to license non-proven technologies and patents From traditionally licensing technologies from others SABIC is now moving towards proprietary developments and licensing technologies out to 3 rd parties No. 11

13 COMPREHENSIVE PORTFOLIO OF PROVEN TECHNOLOGIES Naphtha Ethane Ethylene Production Naphtha cracker CV Ethylene cracker Acetic Acid EO/EG LAO STARTEC Acetic Anhydride Vinyl Acetate PTA Paraxylene CO 2 Styrene PET Butane 1-butene 1-Butene 1-Hexene C8-C20 PET Tape line MMA CTR LDPE UHMWPE PP LLDPE/HDPE HDPE LLDPE LDPE EO/EG UHMWPE PP LLDPE HDPE LLDPE PET Tape AA Butadiene Acrylonitrile PBL SAN HRG ABS ABS Benzene Styrene O 2 Acetone EPS PS Propylene Cumene Phenol BPA BPA Methane Methanol CO Chlorine DMC Chlorine NaOH DPC Phosgene PC PC PC Technology owners SABIC Chemical Jointly owned SABIC Polymer Others No. 12

14 A WIDE RANGE OF TECHNOLOGIES FOR 3 rd PARTY LICENSING Butadiene α-sablin LAO 1 EO/EG 2 CTR LDPE LLDPE/HDPE UHMWPE* Butene-1 CO 2 BPA PP ABS-Emulsion ABS-Mass Phenol Acetic Acid PC* 1 Technology jointly owned with Linde 2 Marketed by Scientific Design, a SABIC/Clariant JV * Only captive licensing Polymers Technologies Chemicals Technologies State of art technologies supported with world class engineering and licensing partners No. 13

15 LICENSING COMES WITH FULL SERVICES AND SUPPORT PACKAGE PDP Engineering Training Manuals PDP preparation with world class engineering partners Safety reviews Licensor support projects engineering phases Review engineering documents Organize and provide training to client trainees & operation staff Training manuals Technology manuals Lab & Quality manuals Commissioning & Start up Technical Exchange Operating technical support services Debottlenecking services Provide Commissioning & startup assistance Organize & conduct technical exchange meetings Provide trouble shooting and site assistance Plant assessments Provide debottlenecking services Expand production capacity of existing facilities No. 14

16 SUMMARY Significant changes in ethylene value chain: demand, supply and trade flows In response, SABIC is globalising its asset footprint and investing in alternative feedstock for ethylene Increased focus on developing proprietary technologies Active marketing of SABIC s proven technologies Contact: Martijn Vogelzang Director Licensing martijn.vogelzang@sabic.com Guido Crevecoeur Licensing Marketing Manager guido.crevecoeur@sabic.com No. 15

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