Successful Integration of Energy Efficiency in the Company Culture

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1 Successful Integration of Energy Efficiency in the Company Culture Dr. Hanno Bruemmer Head of Production & Technology Polyurethanes COVESTRO Deutschland AG ener.con, Berlin, March 20 th 2018 covestro.com

2 Covestro AG Forward-looking statements This presentation may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro s public reports which are available on the Covestro website at Covestro assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments

3 Covestro at a glance Who we are ONE OF THE WORLD'S LEADING POLYMER PRODUCERS 3

4 Covestro at a glance Portfolio, served industries & share of sales Automotive/ transportation Construction Wood/ furniture Polyurethanes Polycarbonates Coatings, Adhesives & Specialities Basic Chemicals 20% 17% 16% Raw materials for rigid and flexible foams Granules and sheets for a wide variety of applications Raw materials for coatings, adhesives and specialities Important backbone for polymer production Electrics/ electronics Chemicals Sports/leisure, cosmetics, health & others 11% 8% 28% 4

5 Covestro at a glance 2 year old start-up with 80 years of innovation and leadership Invention of polyurethanes Invention of polycarbonates Invention of crosslinking agents for lightfast polyurethane coatings Flexible foams Food & water packaging / electrical insulation First all plastic car: K67 Polyurethane coatings for large vehicles and aircrafts First Compact Disc (CD) First automotive polyurethane clear coat CFC-free rigid foam insulation Automotive headlamps and glazing Waterborne dispersions and UV cure Solventfree synthetic leather Microcellular insulation in appliances Flame-retardant IT housing Ultra-mobile notebook grade 1930 s 2010 s 5

6 Covestro at a glance Global production sites in the 3 regions Leverkusen Leverkusen: Brunsbüttel Uerdingen Dormagen Rotterdam Antwerp New Martinsville Newark South Charleston Tarragona Barcelona Baytown Filago Niihama Shanghai Map Ta Phut 6

7 Covestro at a glance Key figures 2017 Sales EBITDA* Employees Core volume growth 14.1 bn 3.4 bn 16, % CO 2 e-emissions** Total production volume** Primary energy** ~5.78 m t ~14.97 m t ~20.9 TWh 7 * EBITDA: earnings before financial result, taxes, depreciation and amortization ** For the major production sites; > 95% of total CO 2 e-emissions and primary energy consumption

8 Covestro s company culture Our Purpose TO MAKE THE WORLD We are open to new ideas and strive for progress. We are constantly looking for improvements. Curiosity drives us to listen closely and offer solutions that are creative and needbased. A BRIGHTER PLACE. April 18 Dr. Hanno Brümmer, Production & Technology PUR, Covestro Deutschland AG

9 Covestro s company culture Our Mission We inspire innovation and drive growth through profitable products and technologies that benefit society and reduce the impact on the environment April 18 Dr. Hanno Brümmer, Production & Technology PUR, Covestro Deutschland AG

10 Covestro s company culture Our Values We are curious We are courageous We are colorful We are open to new ideas We are open to new and ideas strive and for progress. strive for progress. We We are are constantly constantly looking looking for improvements. for improvements. Curiosity drives us to listen Curiosity closely and drives offer us to solutions that are listen creative closely and needbased. and offer solutions that are creative and need-based. We see opportunities where others see risks. Where others ask why we answer why not?. With our knowledge and experience we can push boundaries always with our eyes set on the future. In the often dull corporate world we stand for diversity, optimism and creativity. We know that different views help to solve problems in an innovative way.

11 Covestro s company culture Our Strategy Harnessing potential for growth Focus on sustainability Innovation as a core element Efficient production Competitive costs Our customer industries are expected to grow faster than the global economy in the years ahead. We are looking to help preserve the environment, advance society and create added value. Through focused innovation we aim to maintain and expand our position in the global competitive arena. To improve profitability on a sustainable basis, we work continuously to increase the efficiency of our sites, plants and equipment. We work continuously to improve efficiency and effectiveness across the company, ensuring competitive cost structures.

12 Sustainability Energy efficiency is part of our DNA HELPING THE ENVIRONMENT, CONSERVING RESOURCES 12

13 Sustainability The Global Challenges Climate change Population growth Demographic change Urbanization WE NEED TO MASTER THESE CHALLENGES WITH INNOVATIVE AND SUSTAINABLE SOLUTIONS 13

14 Sustainability These changes shape the needs from entire industries and value chains Lightweight & corrosion protection in transportation Energy efficiency in construction Cost effectiveness in renewable energies Eco-Efficient production processes Enabling materials in electronics High performing materials for convenience & health 14

15 Sustainability Sustainability is integrated in all Covestro policies and specified in its own policy Value creation Sustainability Innovation People HSEQ Compliance We believe in the principle of the three Ps : People, Planet and Profit We always consider the product life cycle in its entirety We are committed to find ways of contributing towards reaching the United Nations Sustainable Development Goals (SDGs) We develop and foster collaborations with external partners We set high standards that are applicable globally 15

16 Sustainability The guiding principle PEOPLE PLANET PROFIT Serving people Improve well-being Enhance safety Support social progress Responsible use of resources Reducing CO 2 emissions Improve product life cycles Close material cycles Creating value Need-based products and solutions Safeguarding growth and jobs Scalable solutions 16

17 Sustainability Focusing on the whole value chain with ambitious targets Sustainability targets 2025: Covestro pursues a holistic approach and views value creation cycles in their entirety with sustainability in mind at all times. Increasing reusability Enabling savings and increasing benefit End-of-life Utilization phase Customer operations PEOPLE PLANET PROFIT Enabling improvements for our partners Our raw materials Our operations Our logistics R&D: Aligning the project portfolio with the UN sustainability targets Procurement: Applying own dedicated sustainability standards to all suppliers Production: Halving own specific greenhouse gas emissions and specific primary energy consumption (2030) Products: Improving living conditions of 10 million people in underserved markets Value Chain: Using carbon in the most intelligent way 17

18 Sustainability Energy Efficiency Examples for innovative technologies and processes Production/ Management Process TDI: Gasphasetechnology Aniline: Adiabaticprocess Chlorine: ODCtechnology** STRUCTese Energy Management Advantages* Specific energy consumption reduced by ~60% Specific energy consumption reduced by ~25% Specific energy consumption reduced by ~30% Average reduction of specific energy consumption ~15% Status Quo Two world scale units in operation: 2011 China 2014 Germany Demo plant in Belgium World scale unit in operation: 2010 China Demo plant in operation: 2011 Germany 2013 external marketing started EnEff potentials globally evaluated for implementation STRUCTese rollout in ~60 energy intensive plants 18 *Compared to conventional process technologies **ODC: Oxygen Depletion Cathode

19 Sustainability Resource Efficiency Examples for disruptive process & product developments Production Process / Product Polyol: Dreamreaction using CO 2 Aniline: Bio-based process PDI: Bio-based coating hardener Advantages* CO 2 replaces ~20% of the normally used crude oil as raw material 100% of carbon content from biomass replacing fossil resources ~70% of carbon content from biomass replacing fossil resources Status Quo Demo plant in operation: 2016 Germany Full scale unit in planning Successful proof of principle Mini plant in operation Full scale technical production *Compared to conventional production technologies or products 19

20 Sustainability Examples for integration of energy efficiency in the organization Community of plant energy managers Energy monitors for control room awareness Energy efficiency as part of training and talent programs Employee initiatives and idea awards Business units and sites to steer their energy efficiency Adjust to changing society, skip company car policy 20

21 Sustainability Achievements by new technologies, sustainable efficiency projects & operational excellence 36,4% reduction of specific primary energy consumption since 2005 (2030 target: -50%) 43,8% reduction of specific greenhouse gas emissions since 2005 (2025 target: -50%) Sustainable yearly savings achieved: t CO 2 e*/a 1,83 Mio. MWh PE**/a Over ten years growth in production without increasing energy consumption & GHG emissions! 21 *CO 2 e = Carbon dioxide equivalents acc. to Kyoto Protocol **PE = Primary energy equivalents acc. to standardized COV factors

22 Thank you for your attention! Dr. Hanno Bruemmer Head of Production & Technology Polyurethanes Covestro Deutschland AG covestro.com