2 nd Annual European Petrochemicals

Transcription

1 2 nd Annual European Petrochemicals End user markets : overview and expectations Düsseldorf, March , 12:10 This document is incomplete without its oral comments

2 I. What end users want from the chemical 29/10/2012 sector? 2

3 I What end users want from the chemical sector? Perimeter and horizon of this analysis The first part of this presentation aims at showing mid term (up to 2030) overview about end users demand at a world level. This analysis is based on a sectorial approach with 4 sectors covering more than 50% of the petrochemical demand : automotive, construction, packaging and personal care. Global petro chemistry demand This document is focusing mainly on the demand. To be comprehensive, offer should also be considered. Others The second part of the document is a short term forecast (2015) by industries in Europe. This forecast is based on an input /output model of the economy by sector. 3

4 Drivers importance I What end users want from the chemical sector? Drivers in the automotive industry DEMAND ++ No price premium allowed with the same functionality Technical performance: no tradeoff authorized but OEMs interested in improvements Environmental regulation: GHG emission reduction & recyclability Recyclability regulation 2015 European target of 85% recyclability & 95% with recovery Worldwide regulation is likely to follow European targets GHG emission reduction light weighting is a solution that can be achieved by replacing metal components by composites & plastics parts Possible confrontation of these two targets Safety / Health: new materials may require substantial testing to ensure safety standards can be met. VOC emission reduction challenge for interior parts Worldwide market: need to adapt to the most restrictive requirements (e.g. recyclability regulation in Europe) + Availability of raw materials required for large volumes: alternative sourcing channels will help ensure sustainable supply Source : Le BIPE 4

5 Drivers importance I What end users want from the chemical sector? Drivers in the construction industry DEMAND ++ Technical performance & environmental regulation + Environmental regulation will foster the demand for high added value materials in terms of life time, energy efficiency & safety Consumers are sensitive to value for money. However, a premium is possible if technical performance is up Health, especially for indoors applications, for workers during material installation & for inhabitants during building life Local production for region-specific demand. It raises the problem of availability of raw materials. Traditional supply chain is short to minimize transportation costs Recyclability regulation as volumes involved are important Source : Le BIPE 5

6 Drivers importance I What end users want from the chemical sector? Drivers in the packaging industry : technicity, environment, cost DEMAND ++ Technical performance (ergonomics and pleasure of use, protecting the content: life time ) depending on consumer expectations (in the packaging industry, supply adjusts to regional demand, first through technical functionalities, then through prices) Environment / end-of-life management / recycling regulation Biodegradability is not necessarily beneficial (no packaging recovery is possible & environmental profit is objectionable) No green premium foreseen for iso performance but premium can be acceptable to a very limited extend for greener / safer packaging (e.g. bioprefered label in the USA) Health & regulation: Chemicals that replace potentially harmful products like styrene and bisphenol A could benefit from stricter regulation, or a change in the consumer sensitivity Availability of raw materials due to short product life and large volumes + Source : Le BIPE 6

7 Drivers importance I What end users want from the chemical sector? In the personal care industry : technical performances, health and sustainability DEMAND ++ Technical performance requirements or new functionalities No green premium foreseen but premium is acceptable when bringing new functionality detectable by the consumer If a strong sanitary constraint prohibits the use of a molecule, lesser performance with isocost or more expensive isoperformance are temporarily tolerable Regulation & consumer: health / sustainability Regulation : health removal of suspicious molecules, more biocompatible molecules Consumer: sustainability = consumer sensitivity to product composition + ethical sourcing + traceability + environmental footprint (water footprint, biodiversity, ecotoxicity ) + Natural products: consumption patterns tend to prefer natural products Source : Le BIPE 7

8 II. Examining changing factors

9 New consumption patterns Consumer expectations II Examining changing factors Demographic growth, ageing population, urbanization and economic growth lead to growing markets and functionality expectations First, the demographic growth in the world will continue with a slower rhythm (1%). The world will count 8,4 billions in The demographic growth of India and Nigeria will be the most significant. The Chinese population should fall in 2030 The population will decrease in some European countries, in Russia, Japan, then in China, Thailand, Taiwan Secondly, the ageing population phenomenon will affect in 2030 OECD, South America and all Asia. Longer life expectancy changes consumer expectations Thirdly, urbanization will develop particularly in South-East Asia and ASEAN, in North Africa and Middle East too + GDP Booming of the middle class, and consequently of everyday consumer good & durable equipment markets Finally, local expectations and local sensitivity especially for building and personal care 9

10 II Examining changing factors Growing markets in 2030: first, the demographic growth in the world will continue with a slower rhythm. The world will count 8 billions in 2024 Demog. growth CAGR ,3 Billions +1,8% ,9 Billions +1,3% ,4 Billions +1,0% Demographic growth (natural and migrations) World population in New demographic dynamics : The population will increase by 2030 on every continent, except in Europe. Asian markets remain very significant In structure, Europe and Asia will lose 2 points to respectively 9% and 58% Africa will increase 4 points to 19% Strong quantitative market growth Source : INED according to United Nations, 10

11 Dependency ratio in % II Examining changing factors The ageing population phenomenon will affect in 2030 OECD, South America and all Asia and impacts consumer expectations 65 years or more in 1990 in 2010 (8%) in 2030 (12%) Source : INED according to United Nations, In nearly all regions, evolution of population pyramid structure will imply important changes in consumption patterns: Health and better aging Natural products Hair, skin care and anti-aging products demand Functional needs Special food and supplements Easy to use, to open, practicality Labels & packaging legible to fading eyes High purchasing power but very high sensibility to quality-performance price ratio Senior ratios* evolutions (estimate and projection) : X1,5 * Population 65+ per 100 population Source : United Nations, June 2013 Europe North America Eastern Asia South America South-East Asia South Asia 11 X2 Africa

12 II Examining changing factors Consumer awareness and expectations: Health considerations will gain momentum and consumers will accept to pay more for healthy products Example of banned molecules for health or environmental regulation A strong growth of urban pollution which risks hardly to continue, especially in south and eastern countries 1.4 The World in 2030: risks and expectations Banned molecules Regulation for health or Consumers environmental regulation: opportunities for New to-the-world and revival biobased molecules Rapid growth of regulations policies molecules for food packaging and VOC emission in the past few years, especially in the US and EU. China and Brazil follow. Since 2010 Canada, 5 UE countries, Brazil, Argentina, Ecuador and 15 US States By 01/01/2015 France: for food packaging Regulation Consumers Deaths per population directly linked to AAP Source WHO 2013 Since 2009 EU: CMR 1 BBP and DEHP Since 2011 US: classified as potential carcinogenic agent EU: damages acknowledge By 2015 NYC ban Future stricter regulation could indirectly benefit Newto-the-world biobased molecules Source WHO 2013 VOC emissions Painting - EU: 1999/2004 Coatings 2007: EU labeling 2013: US national standard EU: 10% to 75% in coatings Beijing: 50% by 2017/2012 BIPE Biobased Chemistry Outlook - WS14-09/04/ a necessary awareness especially in Russia, Eastern Europe, Middle East and China 12

13 II Examining changing factors Urbanization and economic growth lead to booming of the middle class, thus of everyday consumer good & durable equipment markets Purchasing Power Parity (PPP) per capita (Worldbank 2010) Middle-class: Purchasing Power Parity (PPP) per capita > $/year (dollar 2005) Middle-class growth is remarkable in the coming 20 years. According to the estimation of Ministry of Economy, based on the GDP projection of CEPII and database of the Worldbank, middle-class population will double between 2012 and 2030 from 1 milliard to 2 milliard. 80% of this increasing Middle-class population is from emerging countries, 15% from developed countries and 5% from other developing countries,. Asia is the region with largest middle-class growth: 600 millions more, with 400 millions of Chinese, 80 millions of Indian Millions 2500 Global Middle-class population evolution Geographic distribution of Middle-class population 100% 80% 60% 40% 20% 0 0%

14 III. What are the growth industries and economic outlooks

15 III What are the growth industries and economic outlooks to 2030 Automotive industry: a market growth of about 117% implies important sourcing constraints Market size 2010 Min market size 2030 Max market size 2030 CAGR Light vehicle market in 2010 and by 2030 World North America Europe Asia 70 millions sales 11 millions sales 16 millions sales 23 millions sales 134 millions sales (Porto Alegre) 152 millions sales (Dallas) 20 millions sales (Dallas) 21 millions sales (Porto Alegre) 21 millions sales (Porto Alegre) 22 millions sales (Kyoto) 59 millions sales (Porto Alegre) 74 millions sales (Dallas) 4% 3% 1,5% 5,5% Light vehicle sales projection by 2030, in thousands Whatever the scenario, automotive market will boom, driven by China. Key points to be monitored Access to raw materials - Already a concern for butadiene - Competition for composites with aeronautics and wind energy Secure penetration of Asian market Source : Le BIPE 16

16 III What are the growth industries and economic outlooks to 2030 What are the drivers for automotive components? Interior products Optical Purchasing lever Higher technicality Light weighting Under the hood Thermal and chemical resistance Light weighting Recycling VOC emissions Light weighting Recycling Exterior products Recycling Light weighting Tire Butadiene and isoprene sourcing Security Light weighting and energy footprint reduction are the major drivers, common for all categories of components Little evidence is found that the consumer is expecting / requiring sustainable products. Paying more for it is out of the question. Health concerns only refer to interior components Highest technicality is expected for under the hood applications (B to B) Tire is a specific category, the main driver being the sourcing constraint, but no composition change is being considered Legislation Sourcing Product technicality Consumer Sustainability 17 Health

17 III What are the growth industries and economic outlooks to 2030 Construction market growth: Europe and Asia dominate the current market and huge boom of Asian market in the future, primatily driven by China Market size 2010 Min market size 2030 Max market size 2030 CAGR World North America Europe Asia bn $ bn $ bn $ bn $ bn $ (Babel) bn $ (Dallas) 1500 bn $ (Dallas) 1700 bn $ (Kyoto) 2400 bn $ (Babel) 2700 bn $ (Dallas) 7100 bn $ (Babel) 8100 bn $ (Dallas) 4% 2,5% 1,8% 5% Construction market (G$) Key points Fast growing rates in BRIC countries: a sourcing challenge in these countries in the next years? Fall back of the global market in because of the economic crisis. For the construction market prevision in 2030 China will become the largest construction market (40% of studied regions global market) Real estate crisis is likely in emerging countries, even a soft landing is managed by public authority in China (shadow banking) Source: Euroconstruct, US Census, StatCan, KoStat, BIPE Analytics 18

18 1II What are the growth industries and economic outlooks to 2030 What are the drivers for products in buildings? Insulation Less VOC Use of renewables rather than petrochemicals? Adapt to stricter regulation requirements for energy efficiency Façade mortars Use of renewables rather than petrochemicals? Development of outdoor insulation with exterior mortars for better energy efficiency Maintain or better technical performances as resistance, durability, toughness, etc. Tile mortars No VOC emissions Use of renewables rather than petrochemicals? Maintain or better technical performances as viscosity, etc. The reduction of the energy footprint during the construction process and the elimination of the Volatile Organic Compound (VOC) are the major drivers Health concerns mainly refer to the indoor elements. For outdoor products, the impact on the worker who manufactures or assembles the product has to be monitored. Consumers are willing to spend more for natural products if they provide new capacities and are technically even or better efficient. Legislation Sourcing Product technicality Consumer Sustainability Health 19

19 III What are the growth industries and economic outlooks to 2030 Packaging market is expected to double in size within 20 years, driven by Asia Packaging market in 2010 and by Market size 2010 Min market value 2030 Max market value 2030 CAGR FSU World North America Europe Asia 330 bn $ 53 bn $ 77 bn $ 145 bn $ 546 bn $ (Babel) 63 bn $ (Mosaic) 604 bn $ (Dallas) 66 bn $ (Global) 100 bn $ (Babel) 110 bn S$ (Dallas) 287 bn $ (Porto Alegre) 316 bn $ (Dallas) 3% 1% 2% 4% LAM MENA Asia Eur Health care House care Personal care Beverage Food NA Whatever the scenario, the packaging market is & will remain driven by Asia because of socio-demographic drivers max 2010 max 2010 max 2010 max 2010 max 2010 max min min min min min min Source: Le BIPE 20

20 III What are the growth industries and economic outlooks to 2030 Main drivers for selected products of Packaging industry BEVERAGE FOOD PERSONAL CARE packaging Bottle Purchasing lever Thinner material O₂ and CO₂ barrier Recyclability Cans Thinner layer No BPA Body wash & shampoo Durability Make up Butadiene sourcing Finishing quality No Styrene Demand for sustainability Because of consumer direct contact, health and consumer drivers, together with regulation are the key drivers for the packaging industry. Higher technicality is linked to prices because it drives the product thickness to reach the same barrier properties. Legislation Sourcing Product technicality Consumer Sustainability Health 21

21 III What are the growth industries and economic outlooks to 2030 Personal care market projections: Rapid growth of Asian market and relatively low growth rate in Europe Market value 2010 CAGR World North America Europe Asia 760 B$ 125 B$ 127 B$ 296 B$ 2,2% 1,5% 0,7% 3% Personal care market (M$) Key points to be monitored Fast growing rate in Asia countries: a sourcing challenge in these countries in the next years? In 2010, Europe and North America accounting for ½ of global market Africa and Middle East, accounting for only 2% of global market Markets doubling in all Asian regions in four scenarios 22

22 III What are the growth industries and economic outlooks to 2030 What are the regional drivers for personal care market? US Brazil Europe China Japan Drivers Technicality Environment Health India Developing markets : Sustainable claim : a strong argument for the development of natural personal care product in Brazil and India (concern on deforestation/biodiversity, and the pairing of a green image to personal care) Technologic claims (Premium segment) in China Developed markets : Europe focusing on ethical and sustainable sourcing American are concerned by their health and potential toxicity of personal care products 23

23 III What are the growth industries and economic outlooks to 2030 Everyday consumer good & durable equipment market projections: Asia gains 7-9 points of market shares by 2030 Personal care market (G$) Light vehicle sales projection by 2030, in thousands % % Packaging market (G$) +3.1% Building market (G$) by %

24 IV. Short term forecasts in Europe

25 IV Short term forecasts in Europe Construction : growth for Europe but difficulties remain in France and Italy in 2015 Construction Millions Euros 2013 Part dans le G6 (%) Production : taux de croissance annuel moyen (% en volume) France % Allemagne % Italie % Royaume-Uni % Belgique % Espagne % G % Source : Eurostat, Macrobond, Euroconstruct &BIPE 26 26

26 IV Short term forecasts in Europe Automotive: the European recovery Automobile Millions Euros 2013 Part dans le G6 (%) Production : taux de croissance annuel moyen (% en volume) France % Allemagne % Italie % Royaume-Uni % Belgique % Espagne % G % Source : Eurostat, Macrobond, forecast BIPE 27 27

27 IV Short term forecasts in Europe Capital goods: revelation of the competitiveness by country after the crisis Biens d'équipement Millions Euros 2013 Part dans le G6 (%) Production : taux de croissance annuel moyen (% en volume) France % Allemagne % Italie % Royaume-Uni % Belgique % Espagne % G % Source : Eurostat, Macrobond, forecast BIPE 28 28

28 IV Short term forecasts in Europe Intermediate goods: France stays lagging behind Biens intermédiaires Millions Euros 2013 Part dans le G6 (%) Production : taux de croissance annuel moyen (% en volume) France % Allemagne % Italie % Royaume-Uni % Belgique % Espagne % G % Intermediate goods include : Chemistry and petro chemistry Plastics and rubber Steel industries Non metallic materials transformations Source : Eurostat, Macrobond, forecast BIPE 29 29

29 Pascal MARLIER Partner BIPE nd Annual European Petrochemicals Conference 12 March 2015 Düsseldorf 30