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1 3.1

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3 3.3 DSM Engineering Plastics is one of the three Business Groups in DSM s Performance Materials Cluster, and an important pillar in that cluster. The other two Business Groups are DSM Resins and DSM Dyneema. All of these units specialize in the manufacture of technologically sophisticated, high-quality products that are tailored to meet customers performance criteria. The products are used in a wide variety of enduse markets: the automotive industry, the aviation industry, the electrics & electronics industry, life protection, the sports and leisure industries, the food packing industry, the paint and coatings industry and the construction industry.

4 3.4 DSM Engineering Plastics brings value added solutions to customers in four key segments: In Automotive, DSM EP s products and services are used in high demanding technical components in the engine compartment, and in the exterior and interior of the car. DSM EP services this industry with its full product portfolio. Applications include turbo parts and airbag containers. A high growth area is the replacement of metal to reduce weight and reduce fuel consumption. DSM EP is a leading supplier to the Electrical & Electronics (E&E) industry with interconnect components from Stanyl. Its products are widely used in electrical safety devices such as circuit breakers, in which DSM has a long established position. Over the past five years, DSM has obtained a European leadership position in the Food Packing industry with Akulon polyamide 6 product line. DSM EP targets to become a leader in the packaging industry as well in the Asia Pacific region within two years, through its recently opened polymerization plant in China. In General Industries, DSM EP services such segments as sports and leisure. Thanks to DSM EP s outstanding knowledge of products and applications, combined with excellent service levels, the business group has positioned itself as a valuable solutions-oriented partner in all segments.

5 3.5 The Engineering Plastics market has grown above GDP, at about 6% per year for the past couple of years. Growth above GDP is expected also for the coming years. With DSM s product range, DSM EP is present in the key segments. The largest growth is in Asia Pacific, especially in China and in India, where growth has been above 15% per annum, fueled by local demand, and by shifting of manufacturing to those regions. The highest growth per product is in Heat Resistant Resins, which is the domain for Stanyl and DSM s newly introduced PA4T.

6 3.6 DSM EP operates in segments that usually have a complex value chain. In this slide some of the names in that chain are mentioned. Each step in the value chain has different drivers, and therefore it is very important for DSM EP to understand well what those drivers are. DSM EP can thus tailor its value propositions for each step. Many of the innovations in our industry are determined by trends further down the chain, such as safety and environmental concerns. DSM EP interacts deeply several steps downstream to early identify innovation opportunities, and to translate those into actions that DSM needs to take to leverage those opportunities. Examples of this will be given later in the presentation.

7 3.7 In the triangle on this slide, a typical positioning of thermoplastics is illustrated. Performance, price and unit margins go up for products towards the top of the triangle, while volume goes down. DSM Engineering Plastics is positioned in the high performance part of the triangle. The product portfolio is coherent and complementary to service the key industries. It allows for efficiency gains as required segment know-how can be leveraged to more than one product. DSM EP has several global leadership positions with its products. With Stanyl high performance polyamide, DSM holds the global #1 spot. DSM EP has co-leadership positions with Akulon polyamide 6 and Arnitel Thermoplastic Elastomer. DSM positions its newly introduced PA4T in the top of the triangle, and expects to gain a leadership position with this product as well.

8 3.8 DSM Engineering Plastics has built strong global market positions based on application know-how and differentiated products in all these markets. Key to our approach is that DSM has an in-depth understanding of the needs in the value chain, and in-depth know-how of the customers business in those steps. This knowledge approach allows for differentiation and for capturing opportunities at an early stage. The many leadership and niche positions in the segments indicated above, makes DSM EP in general more resilient to economic downturns. In the past DSM has experienced, for example, that food packaging is affected only in a small way by economic downturns.

9 3.9 DSM Engineering Plastics has manufacturing sites and R&D capabilities in all main markets, close to the customer base. Compounding operations are located in Europe (Genk en Emmen), USA (Evansville), China (Jiangyin) and India (Pune). Polymer production is done, depending on the products, in regional units (PA6) or central in one location (PA46, TPC, PBT) or sourced externally. DSM EP s R&D facilities are located in Europe, USA and China in close proximity to the main markets.

10 3.10 As part of DSM Engineering Plastics ambitious investment program, five new plants come on stream in The 2nd Stanyl - PA46 polymerization plant was opened in September 2008 to meet increasing demand for High Performance Polyamides. It doubles the existing capacity and is located in Geleen, the Netherlands, for reasons of cost synergy with existing polymerization and precursor plants. DSM EP also opened early September its next Akulon - PA6 polymerization in JiangYin, China, to establish a leadership position in China and Asia in flexible food packaging. This plant builds on strong backward integration with DSM s caprolactam, also in China (Nanjing). It makes DSM the first and only fully integrated global polyamide 6 player in China. A green field compounding site in Pune in India is currently under construction, and will double the capacity DSM has in India. The plant will be ready for start up Q Through this facility, DSM EP will be able to maintain its leadership position in India. In April, DSM EP opened its Market Development plant in Geleen, the Netherlands, for the world s first new polymer in the new millennium, PA4T: With PA4T, DSM can extend application areas of high performance polyamides for increasing demanding needs from its customers. Focus on E&E and Automotive. The compounding capacity in China is being expanded by 50%, and the extra capacity will start up Q This plant will continue to service the growing markets in China and Asia.

11 3.11 DSM Engineering Plastics has shown solid growth at some average 8% per year over the last ten years. Not only growth rates have been above company average, also CFROI has been sustained above corporate target. Strong advantage for DSM Engineering Plastics is the backward integration in DSM Fibre Intermediates. This business group delivers crucial intermediates (caprolactam and acrylonitrile) to DSM Engineering Plastics and as such, provides security of supply and enables growth in all areas, provides margin stability and thus contributes to the success of DSM Engineering Plastics. In 2008, DSM Engineering Plastics continued its growth pace. Operating profit in first half of 2008 was somewhat lower because of decreasing margins due to higher raw material prices and currency exchange rate effects.

12 3.12 The trends in society offer a lot of opportunities for innovation and growth. Growing prosperity, especially in developing countries, means that many people are lifted above the threshold at which they can afford luxury goods, in which DSM s engineering plastics are used. The trend for increased connectivity drives growth in electronic equipment. An example of changing lifestyles that influence growth is the increased use of packaged food in China. Health and awareness drives growth in packaging solutions as well. A trend that offers a lot of opportunities for us are Sustainability and Environment: Fuel efficiency in vehicles can be improved by weight reduction, trough replacing metal parts with plastics. Engine control systems that reduce emission require complex and precise parts that can withstand high temperatures - and ideal fit with DSM s products. Increased safety features in cars and electrical devices, and the need for zero failures, offer opportunities for DSM EP s high end products. DSM has the total quality systems in place to be a trusted partner. A strong trend over the past period is the need for flame retardant systems in plastics that are halogen free. Pressure on halogens is mounting as they can generate dioxins at too low incineration temperatures. Growth of plastics is high in Emerging Economies, especially China and India, because of increased local demand, and by shifting global manufacturing bases to China. Also some local companies are growing on the world-stage. DSM Engineering Plastics has become more resilient to GDP developments because of its focus, its leadership in key segments, its upstream integration and its presence in emerging economies. However, the effect of global economic growth in general and economic growth in DSM EP s markets in particular, remain important.

13 3.13 DSM Engineering Plastics has a solid pipeline with several new developments in products and applications. DSM Engineering Plastics target contribution to DSM s innovation ambition will be EUR 200 million by DSM EP is fully on track to reach that target.

14 3.14 OEMs and NGOs, such as Apple, Sony and Greenpeace are pushing strongly to come up with flame retardant systems in plastics that are halogen free, especially Chlorine and Bromine free. These systems are mostly used in Electrical and Electronic devices. This drive fits with DSM s Triple P policy. DSM EP has available to the market halogen free solutions in our full range of products, which allows for differentiation and growth. As DSM EP has leadership positions in E&E, it has been able to quickly introduce these new solutions. Sales are growing by over 25% per year. As a result of DSM s efforts in this field, DSM Engineering Plastics has been a certified Sony Green partner for several years now.

15 3.15 A stunning example of DSM s innovations for the automotive industry is Stanyl Diablo. This product is based on patented technology. There is a sharp increase in the use of diesel turbo technology to increase fuel efficiency and to reduce emissions. Also cars and engines are becoming more compact. This all means that engine temperatures go up, and the need for heat resistant plastics increase, especially since plastic parts can be made much lighter than metal parts. Stanyl Diablo can withstand 5,000 hours at up to 230 C, without deterioration of properties. This is well beyond what any competitive engineering thermoplastic can do. This makes it a material of choice for several turbo engine parts. This material has been introduced, combined with DSM s knowledge of engine systems, with very positive results. Sales are expected to grow by over 25% per year for the coming years.

16 3.16 The Akulon product portfolio is engineered for optimum performance to suit different processing techniques and end use markets. A recent innovation is Akulon XP. Akulon XP is a high productivity grade of polyamide 6 for various extrusion applications. One of the key applications is film for food packaging, where DSM can combine its knowledge in materials sciences and life sciences (food). Akulon XP, as a high productivity polyamide 6 resin, offers improved thermo-formability, printability and transparency, whilst maintaining excellent barrier properties. The new material differs from standard polyamide 6 resins thanks to its exceptional processing characteristics that make significant productivity gains possible. The resulting film has improved layer thickness distribution, higher output and lower friction at high shear rates.

17 3.17 It is quite something that DSM has been able to introduce another new polymer. Most of the polymers used today were introduced to the market from the 30 s until 60 s. After 1980 few new polymers were introduced. One of them was Stanyl high performance polyamide, which is the global number #1 in high performance polyamides. Now the market is enlarging because of new trends. There is a need and opportunities for new performance polymers. Polyamide 4T is the first new polymer to be introduced by anyone in the new millennium. This is a true achievement, and a true commitment of DSM to Innovation. There is a very good synergy with Stanyl high performance polyamide. The market introduction of PA4T is progressing very well.

18 3.18 One of the most impressive growth opportunities for us are in emerging economies, especially in China and India. GDP in those countries for the coming years is expected to grow close to 10% per annum, and plastic demand growth will exceed that. Growth will be strong in construction and in luxury goods such as cars and electronics, and in food packaging It is important to have a strong base in Asia to capture this growth. We have local manufacturing in the key growth areas China and India. We have also set-up design and development capabilities in Asia, as more and more specification will be done locally. It is therefore important to be present at the key design centers throughout Asia. Growth will come from growing domestic demand, and global manufacturing. For Electronics China has become the manufacturing hub of the world. In addition in some segments, such as consumer durables, electronics and cars, Asian companies are global leaders, and many products are designed and materials decided locally. A new trend is the emergence of local companies that are competing on the world stage. Examples include Cherry (cars), HuaWei (telecom equipment) and Lenovo (computers).

19 3.19 DSM Engineering Plastics is well positioned in China and India with local compounding and polymerization. To grow in the Asian markets, DSM Engineering Plastics has a regional development and support center in China. This has been one of the success factors to achieve rapid growth in recent years. In India DSM Engineering Plastics builds on a long established position, and we have reached a leadership position in the Engineering Plastics market; average growth amounts to 23% per annum. In China, growth has accelerated over the past couple of years with an average of 40% p.a. We target to maintain our growth rate > 25% for the years to come including the effects of the new PA6 polymer plant and the further expansion of the compounding operation.

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23 3.23 Functional requirements on Electronic components are increasing with each new design, because of integration of functions, miniaturization, and faster assembly. With the new polymer PA4T, and Stanyl high performance polyamide leading position in Electronics, with long standing partnerships with leading OEMs and parts suppliers, we can cover more application areas.

24 3.24 DSM Engineering Plastics has been working with Tata and its suppliers to engineer several parts in our products. We have a leading market position in India and with our new plant coming on stream this year, we are well positioned to meet the growing demand of Tata and other car OEMs.

25 Abbreviation Explanation Abbreviation Explanation 3P ABS AGA ANH APAC Auto ATW BG BMM BoP CAGR CEO CEP CFROI CNRIFFI CPU DoE DSM EP E&E EBA EBIT EBITDA EP EPDM ERP EVA FDI FTE FX GDP GMO GRAS HDPE HNH HRR IP IPP JV LATAM LCC LCP LDPE LED LTP M&A mppo MNC NBD NCPC Triple P (People, Planet, Profit) Acrylonitril butadieen styreen Accelerated Growth Area Animal Nutrition & Health Asia Pacific Automotive Industry Aspire to Win (DNP profit improvement program) Business group BioMedical Materials Program Base of the Pyramid Compound Annual Growth Rate Chief Executive Officer Certificate of Pharmacopeia Cash Flow Return on Investment China National Research Institute of Food and Fermentation Industry Central Processing Unit United States Department of Energy DSM Engineering Plastics Electrical & Electronics industry Emerging Business Area Earnings Before Interest and Tax Earnings Before Interest, Taxes, Depreciation and Amortization Engineering Plastics Ethylene Propylene Diene Monomer Enterprise resource planning Ethylene-Vinyl Acetate Foreign Direct Investment Full-time Equivalent Foreign Exchange (exchange rates) Gross Domestic Product Genetically Modified Organism Generally Recognized as Safe High-density polyethylene Human Nutrition & Health Heat Resistant Resin Intellectual property Isoleuctine-Proline-Proline Joint Venture Latin America Low cost country Liquid Crystal Polymer Low-density polyethylene Light Emitting Diode Lipid Technology Development Mergers & Acquisitions modified Polyphenylene oxide Multinational corporation New Business Development North China Pharmaceutical Corporation NHU Zhejiang NHU Co. Ltd. NIP Nutrition Improvement Program OEM Original Equipment Manufacturer PA Polyamide PA46 Polyamide 46 PA6 Polyamide 6 PA66 Polyamide 66 PA4T Code name for new polyamide molecule PBT Polybutylene terephtalate PBS Polybutanediol Succinates PC Polycarbonate PC blends Polycarbonate blends PDA Personal Digital Assistant PEEK Polyetheretherketone PEI Polyetherimide PES Polyethersulfone PE Polyethylene PE Private Equity PET Polyethene terephtalate PF Phenol-formaldehyde PHA Polyhydroxyalkanoates PLA Poly Lactic Acids PMMA Polymethylmethacrylate POM Polyoxymethyleen PP Polypropylene PPO Poly (p-phenylene oxide) PPS Polyphenylene Sulfide PS Polystyrene PSU Polysulfone PTFE Polytetrafluoroethylene PTG Polymer Technology Group PUFA Polyunsaturated fatty acid PUR Polyurethane PVC Polyvinyl chloride R&D Research & Development RMB Renminbi RoW Rest of World SEPA State Environmental Protection Agency SBR Styrene-Butadiene Rubber SO2 Sulfur dioxide TEDA Tianjin Economic Development Area TGBS Tianjin Green BioScience TPC Thermoplastic Copolyester TPE Thermoplastic Elastomers USD United States Dollar UF Urea Formaldehyde UH Ultri High (molecular weight polyethylene) UV Ultra Violet VC Venture Capital VOC Volatile Organic Compound WFP World Food Program

26 DISCLAIMER This document contains forward-looking statements. These statements are based on current expectations, estimates and projections of DSM management and information currently available to the company. The statements involve certain risks and uncertainties that are difficult to predict and therefore DSM does not guarantee that its expectations will be realized. Furthermore, DSM has no obligation to update the statements contained in this document.