Albemarle Corporation Investor Visit Nanjing, China. September 20, 2007 John Sun Managing Director, China

Transcription

1 Albemarle Corporation Investor Visit Nanjing, China September 20, 2007 John Sun Managing Director, China

2 Forward-Looking Statements Portions of this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Although Albemarle Corporation believes its expectations reflected in the presentation are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation, the inability to pass through increases in costs and expenses for raw materials and energy; competition from other manufacturers; changes in demand for our products; the gain or loss of significant customers; fluctuations in foreign currencies and increased government regulation of our operations or our products. Additional factors that could cause Albemarle s results to differ materially from those described in the forward-looking statements can be found under Risk Factors in item 1A of our Annual Report for the period ended December 31, 2006.

3

4

5 Asia Pacific Sales by Country & Segment

6 Diesel Fuel Specifications : Sulfur How about in Asia Pacific? EU California or /10 ppm 15 Japan Korea Taiwan 350/100 Thailand 100/30 Singapore Australia NZ Philippines Malaysia Indonesia China Hong Kong

7 AP Region Growth Drivers Albemarle has fostered polymer additive relationships in the Pacific Rim for many years. The global electrical and electronics industries have migrated to Asia Pacific based on manufacturing economics, increasing the region's demand for polymer additives. Albemarle has been able to leverage relationships, knowledge of the region, and innovation, to gain a disproportionate share of that growth. With China's rapid rise in living standards, the region also has one of the fastest growing demands for refinery catalyst to produce more, and lower sulfur, gasoline and diesel fuel. With our new technology center, future manufacturing plants, and several JV's (refinery catalyst, aluminum alkyls, anti-oxidants), we are well positioned for continued growth in the region.

8 China Focus Albemarle Chemicals Shanghai Beijing sales office Guangzhou sales office Trading and commercial platform Albemarle Chemicals Nanjing Technology center Catalyst repackaging facility Flame retardant production Domestic/Export sales WOFE format (production FIE ) Albemarle Jinhai Companies Ningbo production Shanghai production Domestic/Export sales JV format Market coverage Innovation Cost leader Local talents

9 Our Business Performance and Organization in China Business Performance 2006 revenue $177MM, 48% growth over GP $79MM, 256% over 2005 Price increased 15%, volume increased 29% Pipeline for sustainable and profitable growth Ethacure, Alblend, PVC heat stabilizers; paper additives, industrial ceramics, Abzol; AA Nanjing repackaging unit completed; PU FR local production, bromine HUB Organization Sales offices in Shanghai, Beijing and Guangzhou Nanjing Phosphorus Flame Retardant manufacturing plant and Catalyst repackaging facility Nanjing Technology Center AOX Production Shanghai and Ningbo Not just a trading entity, but a full scale organization with committed employees driving for success

10 Greater China - Segment Sales 2006 AA leadership position in polyolefin Building relationships in refinery catalyst New opportunity: GTL/CTL, AA in drug Sales leadership Build China bromine strategy New business opportunity: oil field chemical, Abzol Contract mfg and R&D capability in China CATALYST FINE CHEMICALS POLYMER CHEMICALS $177MM* *2006 sales data

11 Greater China Products and Customers Emerging local key accounts, Kingboard, King Fa New technology leader, DSM Refinery catalyst opportunity Bromine business alliance opportunity move down the value chain CP2000 a workhorse for value 8010, BrPS new growth opportunity Products SAYTEX CP-2000 SAYTEX 8010 SAYTEX HP-3010 TOPAZ BROMINE SAYTEX HP-7010 PYROCHEK TETRABUTYLTIN MARTINAL FINE PRECIP 2,6 DTBP TOTAL Key Customers DSM ENGINEERING PLASTICS (JIANGSU) KINGBOARD (PANYU NANSHA) PETRO- FORMOSA PETROCHEMICAL CORPORATION GUANGZHOU KINGFA SCI. DUPONT CHINA HOLDING CO., LTD ARKEMA BEIJING CHEMICAL CO., LTD. NAN YA EPOXY RESIN (KUN SHAN) DOW CHEMICAL (ZHANGJIAGANG) CO LTD

12 Greater China Business Growth Opportunities Share Gain Organic Growth PU FR Br FR Mineral FR Br2 and HBr AA Technology Driven BRPS EBP Abzol ALBlend New Market Fuel and Lub AOX E330 Curatives Oil field Chemical Industrial ceramics Adjacent Segment FR in Textile and Coating PVC additives Partnership Alliances Fine Chemicals Expand Pond Managing business portfolio for profitable and sustainable growth

13 Driving future focused business Expanding research and development Seeking solutions for alternative fuels, low risk additives, providing chemistry services Acquiring new technologies and business to expand our reach Aggressively moving into emerging economies Exiting non-sustainable businesses

14 Albemarle Chemicals Nanjing

15 Albemarle Nanjing Complex 16.5 acre (67,000 sq meters) Nanjing Technical Center Opened March 07 Located in the Nanjing Chemical Industry Park 300 km west of Shanghai on Yangtze River Center of Petrochemical industry in China Well-developed logistics infrastructure Excellent education system (38 universities with S&T degrees) Initial focus on technical support for polymer additive customers One of the most advanced polymer labs in China Adding new product development synthesis Nanjing Manufacturing Plant Polyolefin Catalyst Repackaging Facility opened May 06 Phosphorus Flame Retardant Plant schedule start up Q1 08

16 Catalyst Repackaging Operation Started operation in May 06 Employees use Albemarle s Best Practices for handling a very hazardous product Proximity to major customers and domestic inventory, aiding business growth Technical support improves safety in operation of customer facilities Logistics successes demonstrating Nanjing infrastructure excellence

17 Phosphorus Flame Retardant Plant Operations Center Temp. Constr. Facilities Production Building Tank Farm Waste Water Treatment Warehouse Reserved for Phase 4 Phosphorus-based flame retardant plant scheduled for start-up in Feb. '08 Targeting fast growing construction and consumer electronics market in the region Product for the rigid polyurethane foam market and Product for the PC/ABS electronic enclosure market Facility being built for 50% of US costs Will meet Albemarle's industry-leading safety and environmental guidelines Operating costs at <40% of equivalent US facility

18 Nanjing Impact - One Year Highlights Repackaging Facility operates at design rates with outstanding safety and environmental performance Technical Center opens for business Nanjing chemists file first global patent Nanjing chemists develop new polyurethane viscoelastic foam FR formulation Business growth positively impacted by local technical service capability 3-5 year goal to add new product development advanced to Year 1 Construction of 20 mt manufacturing plant nearing completion

19 Headwinds Market slowdown Customer Inventory Build-up Local competition Flame Retardant standards and advocacy VAT drawback reduction Fluid labor market

20 Strategic Priorities Build execution and tactics to sustain value gain Control GS&A within 5% of Sales Continue to build good relationship with key customers Maximize value of bromine franchise implement China bromine strategy Continue to develop effective distribution channels Build first class commercial operations focusing on marketing and sales functional excellence

21 In China Everything is possible, but nothing is easy.