daniele ferrari daniele ferrari – – ceo versalisceo...

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1 Daniele Ferrari Daniele Ferrari – CEO Versalis CEO Versalis Perspective of the rubber industry: sustainability shaping the future 56 th AGM * “Future Vision.....Forward Movement” Global oil demand vs supply from non-OPEC countries Oil price in Europe vs natural gas price in the US $/barrel $/BTU The world is changing The world is changing rapidly and unpredictably: rapidly and unpredictably: the the oil oil price dip price dip Var % 5 120 20 4 3 2 1 0 100 80 60 40 20 4 6 8 10 12 14 16 18 56 th AGM * “Future Vision.....Forward Movement” -1 2004 2006 2008 2010 2012 2014 2016 2005 2007 2009 2011 2013 2015 20 0 0 2 US natural gas (Henry Hub) Oil (Brent) Non-OPEC Supply Demand

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Page 1: Daniele Ferrari Daniele Ferrari – – CEO VersalisCEO …agmdownload.weebly.com/uploads/1/4/6/3/14639552/ferrari.pdfDaniele Ferrari Daniele Ferrari – – CEO VersalisCEO ... Global

1

Daniele Ferrari Daniele Ferrari –– CEO VersalisCEO Versalis

Perspective of the rubber industry:

sustainability shaping the future

56th AGM * “Future Vision.....Forward Movement”

Global oil demand vs supply from non-OPEC countriesGlobal oil demand vs supply from non-OPEC countries Oil price in Europe vs natural gas price in the USOil price in Europe vs natural gas price in the US

$/barrel$/BTU

The world is changing The world is changing rapidly and unpredictably: rapidly and unpredictably: the the oil oil price dipprice dip

Var %

512020

4

3

2

1

0

100

80

60

40

204

6

8

10

12

14

16

18

56th AGM * “Future Vision.....Forward Movement”

-12004 2006 2008 2010 2012 2014 2016

2005 2007 2009 2011 2013 2015

20

00

2

US natural gas (Henry Hub)

Oil (Brent)Non-OPEC Supply Demand

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The The chemical chemical industry can hold a breath, industry can hold a breath, but the competitive but the competitive framework in the long run is framework in the long run is structurally unchangedstructurally unchanged

Europe Stimulus on demand and margins increased due to lower

energy and feedstock prices Positive currency effect on exports, partly offset by the import

of raw materials+3.6%

US

-3%

Russia Economy squeezed between

oil decline and sanctions Competitive export into EU

due to rouble depreciation

L i A i

North America Highly competitive industry

(production cost base) High level of chemical

investment projects ongoing

+1.2%Euro Area

+1.3%

+3.3%/+4.9%

+6.4%

56th AGM * “Future Vision.....Forward Movement”

Asia Steady slowdown in China to

continue, while India gaining ground From over-supply to well-balance

supply in the medium term

Middle East / Africa GDP diversification need: most countries

vulnerable to oil price decline Priority towards downstream integrated

chemical projects

Latin AmericaWeaker-than-expected domestic

demand in Brazil (GDP +0.3%) Net imports of raw materials and

products from US and focus on renewable sources

GDP growth 2015 (source: IMF World Economic Outlook, Update January 2015)

Megatrends driving market opportunitiesMegatrends driving market opportunities

Disruptive technology

Shortage of resources &

Mobility &

Demographic change

Economic shifts &

Key global megatrends impacting the chemical industryKey global megatrends impacting the chemical industry

developments

High performance

Climate change

Chemicals and Mega/smart

Urbanizationchange

Population growth

Globalization

Economic power of

56th AGM * “Future Vision.....Forward Movement”

g pmaterials (i.e.smart, nano, bio)

Customized and personalizedproducts

plastics from renewables

Environmentalimpact assessmentof processes and products

g /cities and infrastructure

Safe, fast and ecologicallysound mobility

p gin emerging countries

Aging societies

pemerging markets

Increasing middle class and growing wealth

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Butadiene and synthetic rubber: will the price ever recover ?Butadiene and synthetic rubber: will the price ever recover ?

Weak crude oil and natural rubber markets weigh on C4 1 500

2.000

2.500

3.000

3.500

4.000

4.500

Natural rubber and butadiene price trends (€/ton)Natural rubber and butadiene price trends (€/ton)

Synthetic rubber

gvalue chain

15

20

Synthetic rubber: Operating capacity by area vs Global Demand (Mton)Synthetic rubber: Operating capacity by area vs Global Demand (Mton)

0

500

1.000

1.500

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Natural Rubber (Spot SEA) Butadiene (Contr. Delivered WE)

56th AGM * “Future Vision.....Forward Movement”

market is in oversupply, but demand will continue expanding

0

5

10

2010 2011 2012 2013 2014 2015 2016

EMEA AMERICAS ASIA Global Demand

The outlook for the rubber industry: what’s at stakeThe outlook for the rubber industry: what’s at stake

Sustainability in the automotive supply chain as a tool of competitive advantage

Tyre labelling and regulatory pressure in

OPPORTUNITIES CHALLENGES

Boom in butadiene and synthetic rubber capacity additions, especially in Asia

Progressive saturation of the rubber marketsy g g y pthe developed markets

Evolving tyre technology towards better performances and new raw materials

Butadiene supply to tighten in the medium term

Strong growth of the vehicles demand in emerging countries

Progressive saturation of the rubber markets in the developed countries (slow demand)

Surplus of natural rubber (new plantings and producing countries coming to market)

Uncertainty of macroeconomic scenario: slowdown of emerging countries

Imports of light vehicles and tyres in North America and Europe

56th AGM * “Future Vision.....Forward Movement”

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AllAll--round sustainability: a competitive factor to create shared valueround sustainability: a competitive factor to create shared value

Environmental impact

Suppliers Access and

Viability

EmployeeSkills

Gender and Racial Equity

Worker Safety

Employees Health

Water Use

Energy Use

Company Productivity

Creating a competitive advantage by leveraging social and environmental needs

56th AGM * “Future Vision.....Forward Movement”

Source: Harvard Business Review, “Creating Shared Value” by E. Porter and Mark R. Kramer

environmental needs Reconceiving products, needs and customers Redefining productivity in the value chain Enabling local cluster development

The The tyretyre value chain: sustainability value chain: sustainability shaping shaping the the futurefuture

NR Plantation

Tyre factory Automotive/ Consumer/

SR Producer

Tyre factory /Retailer

/Stakeholder

+ performance + transparency

56th AGM * “Future Vision.....Forward Movement”

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Consumers go ‘green’Consumers go ‘green’

92%Fuel efficiency

Top consumer purchase issues

The product sustainability

62%

62%

64%

71%

77%

78%Safety innovation

Ergonomics and comfort

Environmental friendliness

Vehicle styling

Use of alternative fuel technologies

Enhanced vehicle lifespan

The product sustainability profile is central to end-users’ choice

Green consumers look for efficient, longer-lasting and high performance cars, to save costs keeping safety and comfort

56th AGM * “Future Vision.....Forward Movement”

Note: percentage of respondents rating issues as “extremely important” and “very important”. Source: KPMG’s global Auto Executive Survey 2013

Automotive industry: collaboration for sustainabilityAutomotive industry: collaboration for sustainability

Working together to improvethe supply chain sustainability

A CASE STUDY: the A CASE STUDY: the European European Automotive working Automotive working group on supply chain sustainabilitygroup on supply chain sustainability

the supply chain sustainability

Guiding principles to achieve excellence, innovation and performance in a sustainable manner:

• Business Ethics

• Environmental Standards

• Human Rights

56th AGM * “Future Vision.....Forward Movement”

• Human Rights

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TyreTyre makers makers going beyond compliancegoing beyond compliance

Extensive and specific metrics integrated with financial tiv

e

Curve of environmental awareness

Few metrics low

External best practices & “own” standard and data to evidence achievements

greporting to international auditable standards

Ch

ange

& C

ompl

exit

y

Qua

ntita

tQ

ualit

ativ

e

Less advanced tire makers

Leading tire makers (i.e. Bridgestone, Michelin, Pirelli)

56th AGM * “Future Vision.....Forward Movement”

Source: AB sustain, Tire Industry ResearchBob Willard, the next Sustainability Wave – 5 stages of sustainability

Few metrics, low transparency, use of specific standards and indexes

Commitment

Pre-compliance Compliance Integrated strategy

Purpose & passion

Rubber producers Rubber producers facing sustainability facing sustainability challenges challenges

Natural RubberNatural Rubber Synthetic RubberSynthetic Rubber

Technology and performance Butadiene/isoprene availability Energy saving (resource exploitation) Renewable resources Emissions and pollution

Productivity Quality and reliability Waste, water and energy management Health & Safety Forest sustainability

56th AGM * “Future Vision.....Forward Movement”

Emissions and pollution Forest sustainability

Communication Price volatility Tyre Regulations

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The The rubber industry rubber industry is on the right is on the right track ...track ...

Regulation / LabellingRegulation / LabellingRegulation / Labelling

Alternative feedstocksAlternative feedstocksAlternative feedstocks

Reduce-Reuse-RecycleReduce-Reuse-RecycleReduce-Reuse-Recycle

56th AGM * “Future Vision.....Forward Movement”

Life Cycle AssessmentLife Cycle AssessmentLife Cycle Assessment

Compliance: a bridge between Compliance: a bridge between environment environment and performanceand performance

EU and TurkeyLabel enforced since Nov 2012, based on Fuel Economy (RR), Wet Grip (WG) and Noise

USLabel on RR, WG and wear under discussion at federal level

ChinaGreen tire industry self-regulation standards since Feb 2014

Brazil Label mandatory since 2015, same scope as EU

Korea Label mandatory since Nov 2012, based on European scheme

Japan Label scheme on a voluntary basis since 2012

EUTargets to reduce CO2 emissions for Original Equipment Manufacturers since 2009

USEmission standard CAFE on Fuel Economy set by the US Environmental Protection Agency (EPA)

Regulations

56th AGM * “Future Vision.....Forward Movement”

Labelling

Europe paves the road worldwide for tyre requirements, the major driver for performance improvement and technological innovation

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Alternative Alternative feedstocksfeedstocks: innovation : innovation backed up by sustainabilitybacked up by sustainability

1° generation s-SBR & HCBR (Ti, Co, Ni)

Next generation functionalized HMW s-SBR & BR

Biobutadiene-based s-SBR, BR

Bioisoprene-based IRe-SBRLow Cis BRIR, IIR

SR

Functionalized s-SBR, Nd-BR

GuayuleRussian Dandelion

HeveaBrasiliensis

New cellulosic fibers

NR

Highly aromatic oils

Mineral safe oils (low PCA content)

Vegetable oils(extensor, and loose)O

ils

56th AGM * “Future Vision.....Forward Movement”

Precipitadedsilicas

CB and modified silicas

Nanotubesand nanofillerCarbon

blacksFille

rs

Biofillersand fibers

ReduceReduce--ReuseReuse--RecycleRecycle

Retreading trucks retreading up to 3-4 times (even more for off-highway use) retreading involves 20% of rubber in trucks tyres 70-80% reduction in energy and resources consumptiongy p

Run flat tyre reducing spare tyres and weight/fuel consumption

Recycle and Disposal recycle in new tyres: there are issues to be solved regarding

t h l l i ti d li biliti

56th AGM * “Future Vision.....Forward Movement”

technology, logistics and liabilities recycling options in different applications: road paving, rubber

flooring, artificial turf infill, etc. energy recovery as alternative to landfill

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Quantifying Quantifying environmental environmental impacts: the impacts: the Life Cycle AssessmentLife Cycle Assessment

Raw Materials Manufacturing

Synthetic Rubber Industry

Focus on Sustainability:

Minimization of waste, air emissions, waste water

D l i t h l i t

Transportation

Product

End of life

i ib i

Developing new technologies to improve energy efficiencies

Transitioning to raw materials having lower impact on the environment

Utilization of returnable packaging thereby reducing the consumption and disposal of fiber board

Developing new elastomers to improve fuel efficiency in transportation sector and energy saving in industrial applications

56th AGM * “Future Vision.....Forward Movement”

Distribution

First comprehensive multiproduct LCA study issued by IISRP in Q4 2014 on ESBR, SSBR, BR and SBS

Versalis green Versalis green tyretyre philosophy: aligned to the philosophy: aligned to the next next generationgeneration

Today Coming soon...

Polymers rangeNew polymer grades Functionalized HMW s-SBR

e-SBR (dry & o.e.)

s-SBR (batch & continuous)

Low Cis BR

Nd High Cis BR

“Safe” low PCA content extensor oils (TDAE, RAE, MES)

Upgrading generations in Nd-BR

New product line Guayule natural rubber Isoprene-Butadiene rubbers (Nd

catalyst based)

New additives for compounds Vegetable oils (extensor & loose) Tackifying resins

Plus…

Self integrated with raw materials

56th AGM * “Future Vision.....Forward Movement”

Bio-fillers

New raw materials Bio-butadiene

Self integrated with raw materials

Experienced Technical Services Teams

Dedicated Research Centers (in house equipments for processing & application tests)

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Conclusions: 3 tweets for the IISRP Conclusions: 3 tweets for the IISRP 2015 Annual 2015 Annual General MeetingGeneral Meeting

Increasing #consumer awareness makes the difference

Going beyond compliance to untap the potential of #innovation

Join forces on #sustainability to create shared value

56th AGM * “Future Vision.....Forward Movement”

Join forces on #sustainability to create shared value