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ELASTOMERS – TIRE AND CONSTRUCTIONS OPPORTUNITIES IN GCCSABIC
April 9, 2017
No. 1
TOPICS
Elastomers - Overview
Major applications of Elastomers in GCC
Tire industry in GCC
SABIC Elastomers for Tire and Construction Applications
SABIC Application Development Center (SPADC)
ELASTOMERS - OVERVIEW
No. 3
STABLE RATIO BETWEEN NATURAL AND SYNTHETIC RUBBER
**Source: IRSG
Natural Rubber – Natural Elastomer
from Rubber trees
Synthetic Rubber – Artificial Elastomer
from Petroleum byproducts
9850 10057 10098 9723 10403 11239 11658 12281 12115 12314
12700 12829 12285 1148813277
14091 14042 14199 14179 14460
0
5000
10000
15000
20000
25000
30000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
World Rubber Production**
Natural Rubber Synthetic Rubber
46%
54%
World Rubber Consumption – 2015**
Natural Rubber Synthetic Rubber
No. 4
ELASTOMER TYPES
General Purpose Rubber (GPR): Used in high volume
rubber goods such as Tires, belts, hoses, footwear.
Typically low cost with good mechanical properties at room
temperature
• Natural Rubber (NR)
• Styrene-Butadiene Rubber (SBR)
• Polybutadiene Rubber (BR)
• Butyl Rubber (IIR)
• Ethylene Propylene Rubber (EPR/EPDM)
Special Purpose Rubber (SPR): Used in applications
requiring specific properties such as high resistance to heat,
oil, solvents etc.
• Nitrile Rubber (NBR)
• Neoprene Rubber (CR)
• Hydrogenated Nitrile rubber (HNBR)
• Silicone Rubber (Q),
• Fluoroelastomer etc.
Emulsion SBR, 24%
Solution SBR,10%
Polybutadiene Rubber, 24%
Ethylene Propylene
Rubber, 9%
Butyl/Halobutyl Rubber, 8%
Poly Isoprene Rubber, 5%
Nitrile Rubber, 4%
Poly Chloroprene Rubber, 2%
Others,14%
Global Synthetic Rubber Capacities
19,863 KT
MAJOR APPLICATIONS OF ELASTOMERS IN GCC
No. 6
ELASTOMERS - KEY APPLICATIONS IN GCC
Building & Construction
Automotive Tires
Footwear & Sports
Tires70%
Building & Constructions
10%
Automotive10%
Industrial5%
Footwear & Sports 3%
Others2%
No. 7
ELASTOMERS IN AUTOMOTIVE APPLICATION
Brake parts
(EPDM, SBR
Tires (BR, SBR,
EPDM)
Coolant Hoses
Air Hoses
A/C Hose (EPDM)
Glass Run Channel
Windshield Wipers (EPDM)
Belts (EPDM, BR, SBR)
Avg. 25 – 27 kg of Rubber is used in
a passenger car including approx.
20Kg in tires
- -
Sunroof Seal (EPDM)
Bumpers (POE, EPDM) Body sealing
(EPDM)
Hood Seal
(EPDM)
No. 8
ELASTOMERS IN BUILDING & CONSTRUCTION
Window/Door seals
A/C Hoses
Toilet hoses
Pipe seals and gaskets
Kitchen utensils
Foam insulations
Wire & Cables
Furniture
Roof sheeting and membranes
Water pipes
Washing machine gaskets
Etc..
Industrial hoses and belts
Rubber sealing and gaskets
Sheeting and membranes
Insulations
Rubber linings
Rubber floorings
Rubber mounts and bushes
Rubber pads
Valves and stoppers
Rubber bearings
Conveyor belts
Rubber fenders and guards
Expansion joints
Rubber rollers
Rubber tracks
Rubber footwear
Speed breakers
Running tracks
No. 9
• Growth in Automotive industry – Largest segment for Elastomers consuming 70% of total production
• Infrastructure development projects – Mega projects worth US$2.0 billion under pipeline
• Environmental concerns and sustainability drive – Green buildings
• Higher population growth – Expected to reach 59.1 million by 2020 at a CAGR of 2.4%**
• High rate of Urbanization – 89% lives in urban areas$$
• Higher GDP per capita - $60,348 in 2015**
• Improved standard of living associated with the rise in income levels
• High growth in tourists – Expected to reach 69.5 million in 2020 at a CAGR of 5.7%***
KEY DRIVERS OF ELASTOMER INDUSTRY IN GCC
* Source: ** Source: IMF 2016, *** Source: GCC Hospitality Industry Report-2016, $$ Source: World bank
7.1 7.8 8.4 9 9.7 10.3
2.62.8
3.13.2
3.33.3
0
2
4
6
8
10
12
14
16
2010 2011 2012 2013 2014 2015E
Total vehicles in use in GCC
Passenger Cars Commercial vehicles
10.3 10.8 11.9
13.2
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2015E 2016E 2018F 2020F
Forecast of Passenger Cars in use in GCC
TIRE INDUSTRY IN GCC
No. 11
TIRE INDUSTRY IN GCC
22.624.4
26.428.5
30.8
0
5
10
15
20
25
30
35
2016 2017 2018 2019 2020
KSA - Future Demand$$
0
500
1000
1500
2000
2500
3000
3500
4000
2011 2012 2013 2014 2015
1604 1843 1789 1776 1683
1348
1495 1382 1521 1500
146
172159
173 178216
195200 163 164207
195201 199
16654
6050 50
46
Total Tire Imports to GCC***
Saudi Arabia UAE Qatar Kuwait Oman Bahrain
• Total tire sales in GCC expected to grow 9% to reach $3.6 billion in value by 2021**
• Total GCC Tire market estimated to be around 36 million units per year in 2015
• KSA remains the largest tire market having around 50% share followed by UAE
• As per Persistence Market Research, total KSA Tire market expected to reach US$ 2,123 Million in revenues in 2016
• UAE Tire market expected to grow at a CAGR of over 5% through 2021
• Four-wheel and Luxury segment remains strong and anticipated to grow steadily at 10%
• High rate of Tire replacement in GCC – Average 1.5 years
** Source: Frost & Sullivan ***International Trade Statistics, $$ Source: Saudi Industrial Development Fund report
Mill
ion
s
Mill
ion
s
No. 12
MEGA TRENDS IN THE TIRE INDUSTRY
• Reducing fuel consumption – Rolling resistance of the tire estimated to contribute to 4% of the global fuel
consumption*. Reducing 5% of tire rolling resistance saves approximate 1% of fuel
• Green house gas emission – Fuel consumption of fleets make up 5% of all green house gas emission in Europe
and quarter of all CO2 emissions.
• Tire recycling – In US, Europe and Japan approximately 90% of end-of-life tires are recycled for energy recovery*
and other beneficial uses such as Crumb Rubber, Rubber mats etc.
• Tire Labelling – KSA already introduced Tire labelling in line with EU system.
• Changing automotive landscape – Automated cars, Technology advancements etc.
• Sustainable raw materials – Bio rubber, Chemicals etc.
*Source: UN Transportation estimates & Goodyear Dunlop Rolling resistance data, **Source: World Business Council of sustainable development tire projects
Fuel
Saving
SafetyHigher
Mileage
No. 13
MATERIALS USED IN TIRE INDUSTRY
• Natural Rubber (NR)
• Styrene Butadiene Rubber (SBR)
• Poly Butadiene Rubber (BR)
• Butyl Rubber/Halogenated Butyl Rubber
• Carbon black
Side wall
(NR/BR)
Steel Belts
(NR/BR)
Inner Liner
(HB) Bead Filler
(NR/BR)
Chaffer
(NR/BR)
Shoulder
(NR/SBR/BR)
Body plies
(NR/BR)
Bead Wire
Tread
(NR/BR/SBR)
Natural Rubber
32%
Synthetic Rubber
14%
Fillers24%
Steel15%
Textile1%
Chemicals10%
Oil4%
Truck/Bus Tires
Natural Rubber
18%
Synthetic Rubber
25%Fillers28%
Steel11%
Textile5%
Chemicals6%
Oil7%
Passenger Car Tire
No. 14
MAJOR CHALLENGES FACING THE GCC TIRE INDUSTRY
• Lack of OEM’s – Typically 40% of the tire production goes to OEM segment
• Brand loyalty - Consumer preference for the Original Equipment brand
• Economy of Scale - Competitiveness
• Skilled manpower
• Government policies and regulations
• Changes in mobility preferences: UBER, shared Taxi, Public transport
SABIC ELASTOMERS FOR TIRE & CONSTRUCTION APPLICATIONS
No. 16
SABIC SYNTHETIC RUBBER PROJECT - OVERVIEW
• Investment: $3.4bn Synthetic Rubber & Carbon Black Complex
• Products: BR, S-SBR EPDM, POE, Carbon Black and other rubbers
• Capacity: 360,000 t.p.a
• Partners: SABIC and ExxonMobil 50:50 Joint Venture
• Location: Strategically located at Al-Jubail, Saudi Arabia
• Start-up: In Q1-2016
• Commercial production: Q2-2016
Product availability:
• BR, EPDM and POE grades are available from
Kemya plant for commercial sale
First Synthetic Rubber plant in GCC partnered with world’s leading technologies, to address growing needs of
high performance Elastomers in GCC and around the world
No. 17
KEY FEATURES OF POLYBUTADIENE RUBBER (BR)
High Cis 1,4 content (Up to 97%)
High average Molecular weight – Better physical properties
High Abrasion resistance, high Resilience and low Rolling resistance
Broad Molecular Weight Distribution – Better processibility
Medium to high branching – Better mixing and processibility
Better filler incorporation and higher mix quality
Lower mixing time – Low energy consumption
No. 18
SABIC POLYBUTADIENE GRADES GRADES
SABIC
GradesCis Content
Mooney Viscosity (ML
1+4, 100°C)Volatile Matter Ash Content Appearance Key features
SABIC® BR 5510 Up to 97% 55 +/- 5 0.5% Max. 0.25% Max.Off-white to light
amber
Highly linear,
High Mooney
SABIC® BR 4610 Up to 97% 46 +/- 5 0.5% Max. 0.25% Max.
Off-white to light
amberHighly linear,
Low Mooney
SABIC® BR 4010 Up to 97% 40 +/- 5 0.5% Max. 0.25% Max. Light AmberBranched, Low
Mooney
Technology from Goodyear Chemicals, USA
No. 19
The SABIC BR grades are applicable for most of the applications
Tire72%
Plastic Modification15%
Shoe Sole3%
Conveyor belts3%
Sporting Goods2%
Industrial Goods
5%
BR-Consumption
POLYBUTADIENE RUBBER - MARKET SEGMENTS
Tread
(Up to 40 phr)
Shoulder Strip
(30 – 60 phr)
Sid wall
(40 – 60 phr)
Rim Strip
(40 - 60 phr)
Carcass -1 (Up to 20 phr.)
Carcass – 2 (Up to 20 phr.)
Bead Apex
(Up to 25 phr)Bead wire
Chaffer
Inner Liner
No. 20
SABIC EPDM – COMPOSITION AND TECHNOLOGY
(- CH2- CH2- ) (- CH - CH2- )
I
CH3
Ethylene 40 - 80%
(Crystallinity)
Propylene 20 - 60%
(Elastomeric Properties)
(- R - )
II
CH
I
CH3
Diene 0 - 12%
(Cross linking)
Random Distribution
• Ter polymer of Ethylene, Propylene and a Diene
• Technology : ExxonMobil Chemicals, USA
• Metallocene catalyst system
• Solution polymerization method
• Five selected grades to fit majority of the applications
No. 21
KEY FEATURES OF SABIC EPDM AND COMPOUND
Excellent weather and ozone resistance
Very good physical properties
Very good compression set
High purity and better quality finished products
Wide range of service temperature
Faster cure rate and higher cure state
High filler / plasticizer acceptance
No. 22
SABIC EPDM - GRADES AND APPLICATIONS
SABIC GradesMooney Viscosity ML
(1+4, 125°C)
ENB content
(wt%)
Ethylene
Content (wt%)Typical Applications
SABIC®
EPDM 657 60 5 73
-General purpose hose (up to 125°C)
-Auto weather seals and profiles
-Automotive and industrial belts
-Wire and cable insulations
-Gaskets and seals
SABIC®
EPDM 626 67 2.8 69
-Roof sheeting
-Flexible pond liners and Geo-membranes
SABIC®
EPDM 756 72 5 69
-Auto weather seal profiles
-Auto coolant hoses,
-Air hoses, Industrial hoses
-Other extruded applications
SABIC®
EPDM 855 82 5 55
-Auto weather seals profiles,
-Auto coolant/Air hoses,
-Industrial gaskets, O rings for pipe/hose,
-Washing machine gaskets.
-Other extruded applications
SABIC®
EPDM 245 25 4.5 50
-Brake parts
-Industrial gaskets/O rings for pipe/hose
-Molded Rubber goods
No. 23
Industrial
EPDM MARKET - SEGMENTS
Automotive
Polymer Modifications
42%
14%
13%
9%
7%
6%
6%3%
1200
kta
Construction
Electrical Appliance
Oil Modification
Source: IHS 2015
Others
EPDM mostly used in out-door and heat resistant applications
SABIC APPLICATION DEVELOPMENT AND TECHNICAL SUPPORT CAPABILITIES
No. 25
TECHNOLOGY AND INNOVATION
World-class technical innovation with 2,000 researchers worldwide. More than
10500 global patents
Application development with key customers is at the heart of SABIC’s winning
strategy
20 Technology and Innovation centers distributed globally in 5 key geographies.
More than 200 equipment and over 300 tests are available
No. 26
RUBBER TESTING AND ANALYSIS CAPABILITIES
Rheological Study
Physical & Mechanical Property
Hot Air Aging Study
Fluid Resistance
Weather/ Ozone Resistance
Dynamic Properties
Thermal Analysis
Rubber
Compounding
and curing
MATERIAL DEVELOPMENT
TECHNOLOGY ASSESSMENT
PROCESS IMPROVEMENT
INNOVATIVE TEST METHODS
MATERIAL CHARACTERIZATION
POLYMERIZATION PROCESSES
TECHNOLOGY LICENSING
PLANT IMPLEMENTATION
R&D PROJECT EXECUTION
RESOURCE UTILIZATION
APPLICATION DEVELOPMENT
No. 27
WE ARE FULLY CAPABLE OF DEVELOPING AND SUPPORTING OUR CUSTOMERS.
• Collaborate with customers for developing new
solutions
• Creates a catalyst for new ideas & thinking.
• Provide technical support and training for
SABIC’s customers around the world
CREATING
LONG-TERM
SUCCESS
A SPIRIT OF
INGENUITY
No. 28
CONCLUSION
• About 90% of the rubber products are currently imported to GCC
• Excellent opportunity for Elastomer in Automotive and Construction industry in GCC owing to the outstanding
growth in this region
• 70 – 80% of the raw materials will be available locally to cater to the Elastomer industry
• Enablers for the Elastomer industry is available locally – Technical support, skilled manpower….
• Strong drive from the Government to localize end use products creates new business avenues
No. 29
THANK YOU