New Styrenic Block Copolymers and Applications
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1 New Styrenic Block Copolymers and Applications The Woodlands, Texas USA October 22, 2015
2 What are Styrenic Block Copolymers (SBC s)? Primary Raw Materials Products Consumer Product/Enduse Styrene Butadiene Isoprene Un-Hydrogenated SBC s SBS, SIS Hydrogenated SBC s SEBS, SEPS Isoprene Rubber (IR) & IR Latex Compounds SBC s, PP + Additives Polymer-modified asphalt Tapes, labels, non-woven adhesives and industrial adhesives Soft Skin, Personal care, IV bags, Medical tubing Medical stoppers, Cold seal adhesives, Surgical gloves, Condoms Kraton is the only provider of these value components across all products touching a wide array of applications 2
3 We provide highly-engineered polymer solutions to enhance a wide variety of end use products SBCs provide valuable performance enhancement for polymers in a host of everyday applications 3
4 We market Cariflex products in both solid and latex forms for a wide variety of applications Polyisoprene rubber latex Food & medical packaging Dental Dams Catheters Strong Soft Pure Elastic Transparent Needle shield Transparent soles Condoms Solid polyisoprene rubber Resealable insulin plugs Surgical gloves Marine coatings 4
5 We have a global manufacturing, R&D, and technical support presence Broadest manufacturing footprint and production capabilities in the industry Sales network covering >60 countries, five R&D centers and global technical support Innovation center Production facility 5
6 We bring the industry s broadest portfolio to numerous end markets Cariflex Products (11% of revenues) Polyisoprene rubber & Polyisoprene rubber latex Key markets: Surgical gloves, condoms, medical components Specialty Polymers (34% of revenues) Hydrogenated SBCs Key markets: Oil gels, medical, lubricant additives, personal care, automotive Performance Products (55% of revenues) Unhydrogenated SBCs Key markets: Paving and roofing, labels, tapes, printing plates, personal care Exceptional breadth: The broadest product portfolio in the industry High end focus: 57% of sales are differentiated, with premium margins Excellent IP Protection: 1,440 patents granted or pending underpin our global differentiated market position Data for 2014 FY 6
7 Key technology projects have contributed >$200M to the top line in 2014 Cariflex Products We announced a portfolio of projects in 2012 many have delivered on expectations Many applications are early in the adoption curve we expect these investments to drive further growth 7
8 Polymer Development is key to our success in Innovation and Differentiation Giving Innovators Their Edge Increasing profitability through portfolio shift Advance growth in core markets via new polymers Explore new markets & technology concepts Leverage new polymer technology for new applications 8
9 Broad Polymer Design Capability Styrenic Block Copolymer (SBC) SEBS, SEPS, SBS, SIS, SIBS, PS USBC Rubber PS Advantages of Anionic Polymerization 1. Precise control of block size and formation SBS x y 2. Precise control of molecular weight + H2 3. Narrow molecular weight distribution HSBC 4. Precise control of midblock structure SEBS x y 5. High hydrogenation ratio 9
10 Value Creation Through Unique Polymer Design Design Tools Properties Value Molecular Weight Melt viscosity Adhesion PS/BD/Isoprene Ratio Block structure Types Block structure Length Vinyl Content Monomers Phase Matrix Solution parameters Hysteresis Modulus Strength Glass Transition T G Temperature Resistance Compatibility Clarity Strength Softness/ Hardness Processability Post reactivity (curing) Viscosity enhancement Compression Set 10
11 The new Semi-works at Belpre is further accelerating our ability to bring new polymers to market The Semi-Works Advantage Shorter time to market and reduced investment risk Small batch capabilities; can produce HSBC, USBC, and Cariflex Products Shorter product development cycle Semi-works plant at Belpre New Polymer Profile: Project: MD8703 used to modify drilling and completion fluids in oil field applications, providing superior viscosity stability at high temperatures up to 150 C Process: Multiple product runs on the Semi-works were critical to fine tuning the molecular structure to meet customer specs. Commercialization time less than 12 months Results: Leading oilfield services company has adopted the polymer for well casing insulation for permafrost conditions. The polymer has been qualified by two of the super majors 11
12 New SBC s and potential applications Advance growth in core markets via new polymers High Melt Flow Polymer portfolio extension Explore new markets & technology concepts Nexar Polymers Functional polymers with unique technical features Leverage new polymer technology for new applications Soft Skin Technology New polymer based formulation for automotive applications 12
13 We are continuing to make select investments in breakthrough innovation High Melt Flow Example Polystyrene Content High Low Technology Overview: Melt Flow Rate Current polymers HMF polymers High Commercial Opportunity: Low viscosity allows SBCs to compete with other material types in existing processes that were previously inaccessible Automotive (dashboards & interiors) Specialty Polymers - coated fabrics for contract furnishings High Melt Flow allows us to extend a group of polymers into low viscosity HSBC applications Hot melt adhesives 13
14 MD6951: The Newest Polymer in the Kraton A Family 14
15 Kraton MD1648: The Newest Polymer in the Kraton ERS Family Kraton ERS polymer Polystyrene content, % MFR (230ºC/2.16kg), g/10 min Shore A Hardness Product form G <<1 58 Crumb G <1 60 Fluffy crumb G <1 48 Crumb G Dense pellet G Dense pellet MD Dense pellet MD1648 Key Features: 10X lower viscosity than next comparable HSBC polymer ODT ~ 200 C Excellent elasticity & strong mechanicals Available in dense pellet with organic dust Kraton ERS polymer MFR (230ºC/2.16 kg), g/10 Tensile strength, MPa Elongation at break, % G > MD
16 The Low Viscosity of MD1648 is Expected to Enable New Applications High Flow PP Toughening High Flow Soft, Transparent SEBS/PP Compounds Excellent compatibility with PP Efficient Impact Toughener Long Glass Fiber PP Composite Toughening MD1648 S EB S High Flow Enables Processability Sound/Vibration Damping Applications Tg tunable with tackifying resins Excellent compatibility with APAOs Excellent Elasticity + High Flow Melt Blown Elastic Constructions Low Viscosity Thermally Stable Adhesives 16
17 New SBC s and potential applications Advance growth in core markets via new polymers High Melt Flow Polymer portfolio extension Explore new markets & technology concepts Nexar Polymers Functional polymers with unique technical features Leverage new polymer technology for new applications Soft Skin Technology New polymer based formulation for automotive applications 17
18 New functionalization approach extends SBC market space Features & Benefits High water flux and transport rates Mechanical strength & ion selectivity with low area resistance. Good Chlorine resistance and tolerates ph 1-14 Typical application processing: Printing Coating or Lamination Applications Cooling technology for apparel Energy recovery ventilation (ERV) Water purification (Membranes) tbs EP ss EP tbs ( ) ( IEC (meq/g) ) ( ) O S O OH ss (mol% ) Volume Fraction PSsS
19 ERV Energy Recovery Ventilation - Cost Savings - ERV is a energy recovery air exchanger Improved Air Quality - ERV transfers both heat and moisture; keeps humidity at comfort level Optimum Home Comfort - Utilize inside air that has already been cooled or heated to pre-condition fresh outside coming air - Pre-cools air and removes moisture in the summer - Pre-heats air and retains moisture in the winter Nexar laminates allow for less impeded air flow and minimal pressure drop impact. Nexar membrane composites improve the total energy recovery of an ERV unit Nexar laminates exhibit excellent mechanical properties that improve durability and wash-ability. 19
20 Textile Apparel Application Microclimate Control for Textiles Absorb Moisture Scavenge Perspiration Reduce Surface Temperature Enhanced Cooling Durable Stable During Washing (50 + cycles) Decorative Printing Patterns Smart Technology Humidity Activated 20
21 New SBC s and potential applications Advance growth in core markets via new polymers High Melt Flow Polymer portfolio extension Explore new markets & technology concepts Nexar Polymers Functional polymers with unique technical features Leverage new polymer technology for new applications Soft Skin Technology New polymer based formulation for automotive applications 21
22 Injection Molded Kraton TPE Technologies for Soft Skin Automotive Interiors Benefits of the Kraton Injection Molded Soft Skins (IMSS) Products Simplified process. Inherent density advantages versus PVC slush and TPO foils. Competitive systems economics versus slush mold PVC skins and thermoformed TPO foils. Enables the reuse of scrap and production trim waste. Phthalate free and low plasticizer content results in exceptional VOC, Fogging and long term validation performance. Designed to meet Automotive OEM Specifications.
23 Kraton Injection Molded Soft Skins Product Inherent Ability to Provide A Range of Haptics and Flow Characteristics Without Compromising Performance Properties Method Kraton TPE IMMS Grades* Shore A Hardness (15 sec) ASTM D Specific Gravity (g/cm 3 ) ASTM D ** 0.95** Tensile Strength (MPa) ASTM D Break (%) ASTM D Tear Strength (N/mm) ASTM D Abrasion Resistance CS10, 250 Cycle No Wear No Wear No Wear Scuff Resistance SAE J365, Knife A No Wear No Wear No Wear Coefficient of Friction ASTM D *** 0.3*** PVC TPO Heat Ageing (1000hrs o C) ISO Tensile Strength Change (%) ASTM D Elongation Change (%) ASTM D Weathering (Color Change E) MFR 190 o C, 2.16Kg (g/10min) MFR 230 o C, 2.16Kg (g/10min) FLTM BO <1 <1 <1 ASTM D ASTM D a * Based on Kraton IMSS Grades: KICH , , -010 and MD6743 ** Based on Manufacturer s Technical Data Sheet *** Reading taken on grained surfaced a MFR readings are not accurate due to low viscosity of the compound at this temperature Carrier: Polypropylene Over Molding: Kraton IMSS Flow length: 30 cm Thickness: mm Gating Scheme: Three Tunnel Gates 23
24 Performance Cold Impact & Abrasion Resistance Improved Cold Temperature Impact Resistance* at -35C vs TPO & PVC Offerings Kraton IMSS PVC Skin TPO Skin Abrasion Performance Equivalent to PVC Without the Aid of a Top Coat Kraton IMSS PVC Skin *Gardner Impact Tester per ASTM D5420; Height of drop 100cm; Diameter of striker 16mm; Weight 1.8 Kg (4lbs); Temperature -35ºC 24
25 SUMMARY Creative polymer design leads to high melt flow polymers which allow easier processing and broaden the application space for HSBC s. New functionalization chemistry via polymerization expands the use of HSBC polymers into totally new market and application areas. Creative formulations enables the use of HSBC s in new applications while reducing system cost. 25
26 LEGAL DISCLAIMER For more information, please call KRATON, or Kraton Performance Polymers, Inc. believes the information set forth herein to be true and accurate, but any recommendations, presentations, statements or suggestions that may be made are without any warranty or guarantee whatsoever, and shall establish no legal duty on the part of any Kraton Polymers affiliated entity. The legal responsibilities of any Kraton Polymers affiliate with respect to the products described herein are limited to those set forth in Kraton s conditions of sale or any effective sales contract. Kraton does not warrant that the products described herein are suitable for any particular uses, including, without limitation, cosmetics and/or medical uses. Persons using the products must rely on their own independent technical and legal judgment, and must conduct their own studies, registrations, and other related activities, to establish the safety and efficacy of their end products incorporating any Kraton products for any application. Nothing set forth herein shall be construed as a recommendation to use any Kraton product in any specific application or in conflict with any existing patent rights. Kraton reserves the right to withdraw any product from commercial availability and to make any changes to any existing commercial or developmental polymer. Kraton expressly disclaims, on behalf of all Kraton affiliates, any and all liability for any damages or injuries arising out of any activities relating to the use of any information set forth in this publication, or the use of any Kraton products. This publication includes "forward-looking statements," which are statements other than statements of historical fact and are often characterized by the use of words such as "believes," "expects," "estimates," "projects," "may," "will," "intends," "plans" or "anticipates," or by discussions of strategy, plans or intentions. All forward-looking statements in this publication are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These risks and uncertainties are more fully described in "Part I. Item 1A. Risk Factors" contained in our Annual Report on 10-K, as filed with the Securities and Exchange Commission and as subsequently updated in our Quarterly Reports on Form 10-Q. We hereby make reference to all such filings for all purposes. Readers are cautioned not to place undue reliance on forwardlooking statements. We assume no obligation to update such information. Kraton maintains a Cosmetics, Drugs and Medical Device Policy that restricts the use of Kraton s Products in certain end use applications without Kraton s prior written consent. Accordingly, Kraton does not guarantee that Kraton s products will be available for use in all potential end use applications. Kraton s Cosmetics, Drugs and Medical Device Policy is available on Kraton s website at Kraton, the Kraton logo and design, the Cariflex logo, Cariflex, Nexar and the Giving Innovators Their Edge tagline and, in some cases, their expression in other languages, are trademarks of Kraton Performance Polymers, Inc. and are registered in many countries throughout the world Kraton Performance Polymers, Inc. All rights reserved. 26
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