High-performance rubber: key material for “Green Tires”

Dr. Joachim Grub Head of Performance Butadiene Rubbers business unit

São Paulo, March 4, 2013

2

LANXESS PBR – top solutions meeting future mobility needs

Market Sales by end use PBR overview Key figures:   Sales: >€500 m   Capacity: >900kt/a

  Employees: >1,000   Customers: >250

Product groups:   Polybutadiene rubber

(PBR)   Styrene-butadiene rubber

(S-SBR and E-SBR)

  Global nameplate capacity: ~10,600kt1

Plastics 11%

Tire & retread

72%

Technical rubber

10%

Lifestyle & leisure

7%

[BU sales]

Global demand growth (CAGR 2012-2017)2 for

S-SBR and Nd-PBR ~10%

1 IHS Chemicals 2012; 2 LANXESS estimates based on IHS Chemicals 2012

LANXESS is the leading supplier of high-performance rubbers

High-end rubber needed to improve overall tire performance

Grip RR**

E A E E

B E E E E B B B

1 � 2 � 3 � 4 � 5 � 6 �

Rolling resistance still underperformed

LANXESS solutions to reduce rolling resistance

Effect of LANXESS high-end rubbers in treads

Rolling resistance coefficient

Standard rubber

LXS HP rubber

Durability coefficient

Standard rubber

LXS HP rubber

Rolling resistance accounts for 20%-30% of fuel consumption

Selected tire* classifications by grip and rolling resistance

Durability Wet Grip

Nd-PBR

General Purpose Rubber

Rolling Resistance Reduction

Nd-PBR & S-SBR

Source: GTÜ and ACE; * Six of the leading global tire producers; ** Rolling resistance

3

Nd-PBR and S-SBR – enabling high-performance “Green Tires”

  PBR production technologies lead to:

–  Nd-PBR with high molecular weights and low poly-dispersities

–  Rubber with superior performance / processing balance, e.g. via patented “Mooney Jump Reactions”

–  Tailor-made S-SBR via fine tuning of macro- and microstructures and functionalization

Characteristics Products Tire industry applications Nd-PBR

S-SBR

  Outstanding abrasion resistance

  Reduced rolling resistance

  Excellent strength

  High crack resistance

  Excellent wet grip

  Reduced rolling resistance

  Good abrasion characteristics

  Superb mechanical properties

  Tread

  Tread   Under-

tread   Sidewall   Carcass   Bead-

region

4

LANXESS’ AA-rated concept tire

A A

LANXESS

AA concept tire

European tire labeling

5

LANXESS PBR – global footprint with world-class manufacturing base

Growing with our customers BU PBR: production site BU PBR: technical & marketing center

Cabo de Santo Agostinho, BR

Triunfo, BR Duque de Caxias, BR

Port Jérôme, FR Dormagen, GE

Orange, US

Singapore

  Serving current and future requirements of performance-oriented customers

  Emerging markets shift towards performance applications – LANXESS has strong footing in BRICs

  Strategic investments underpin excellent position

6

Converting production in Triunfo from E-SBR to S-SBR

  Production of the latest grades of S-SBR as of the end of 2014

  Investment of EUR 80 million – financed from the company’s cash-flow

  Up to 500 temporary workers needed during conversion phase

  A regular supply of E-SBR will be maintained from the company’s plant in Duque de Caxias in Brazil with a capacity sufficient to fulfill the entire demand of the Brazilian market

7

New capacities to meet the strong demand for “Green Tires”

  4th largest market & 6th largest producer in the world

  6% annual car production growth expected until 2020

  5.2% of total GDP & 22% of industry

  63 million vehicles produced until 2011 (54 years of activity)

  26 automakers, 500 autoparts manufacturers, 53 plants, 4,554 dealers

  US$ 50.5 billion invested (1994-2011) and US$ 60 billion investment estimated between 2013-2017

  66.9 million tires produced in 2011

  Tires market boosted by growth in vehicle production

Promising future for automotive and tire industry in Brazil

8

Sources: ANFAVEA; ANIP; ABLA; Valor Econômico

  Tire Labeling planned to be implemented in October 2016

  Inovar-Auto – new automotive regime between 2013-2017

  Aim: more energy efficient vehicles

  LANXESS sales of high-performance rubber for green tires boosted by Tire Labeling and Inovar-Auto

Strategy driven by the Tire Labeling Program and the Inovar-Auto

9

Green tires alone reduce fuel consumption up to 7%

Inovar-Auto goal: minimum improvement of 12% in energy efficiency of the fleet by 2017

The leading supplier of high-performance rubbers for “Green Tires”

Future-oriented investments with proximity to key markets

LANXESS S-SBR and Nd-PBR enable high-performance tires

Satisfying the increasing demand for high-performance rubbers

1

2

3

10