Creating Markets for Bio-Plastics Value Drivers and Targeted Applications Marc Verbruggen Bangkok – October 2014

Creating markets for bio-plastics Value drivers and targeted applications Marc Verbruggen Bangkok – October 2014

1 Topics

• NatureWorks • Value drivers for bio-plastics • Targeted applications

• World’s leading bio-polymer player − 150,000 ton plant in Blair, NE − Significant manufacturing know-how and an extensive IP position • Jointly owned by Cargill and PTTGC • Proprietary portfolio of Ingeo bio- polymers & intermediates • Ingeo - competitive on a cost and performance basis with traditional plastics (PS, PET) • Superior environmental characteristics − Lower carbon footprint , low fossil energy − Additional end-of-life options • Established global market channels − Over 100,000 ton in annual sales volume − Commercial partnerships with global brands

Ingeo GPPS PET PP Tensile Strength Mpa 53 45.5 58.6 35.9

Elongation at break % 6 1.4 5.5 350 (%) Tensile Modulus Gpa 3.6 3.03 3.45 1.31 Izod Impact J/m 16 21.4 26.7 48.1 Tg C 55-60 102 74 -20 Melting Point C 125- None 270 165 180 Density g/cc 1.24 1.05 1.35 0.9

* Properties measured on 3.2 mm thick injection molded tensile bars. Specific properties pertain to Ingeo 2003D

8-series Foam

7-series Blow Molding

6-series Fibers/Non-woven

4-series Film

3-series Injection Molding

2-series Thermoforming

Lactide Monomer

Bulk Railcar

1 MT Super Sack 750 kg Box

Nonwovens / Fibers Durables Lactides Incubator

Europe, Middle East, Africa Asia Pacific Americas • Resinex (EU 27 countries) • PTT Polymer Marketing (Thailand) • Nexeo (USA & Canada) • Resinex BMY (Turkey) • BP Consulting (Japan) • Jamplast (USA) • Protea (South Africa) • Unic (China) • Promoplast (Mexico) • Jolybar (Israel) • First In Colours (Philippines) • Cromex (Brazil) • Seeplas (Australia) • Oxiquim (Chile & Peru) • Poynter Agency (New Zealand) • Quimicoplasticos (Colombia) • Cosalco (Costa Rica)

New Asia Pacific Regional Headquarters Blair, NE USA

Rayong Province Thailand

• Bangkok, February, 2013. NatureWorks 1st Asia Pacific regional headquarters established – Warehousing and logistics capabilities, customer service, finance staff, • Engineering Underway for plant II in the region

Investments reinforce NatureWorks' commitment to the region and its support of accelerating Asian market growth

• Most (all) bio-plastics compete against commodity plastics – Developed & optimized over the last 50 years – Large & global asset base, established converter network

• Except for legislated applications, carbon footprint reduction has failed to gain much traction as a value driver (no “green premium”) – Consumers are confused and/or don’t see value (packaging) – Brands have largely not succeeded positioning “carbon footprint” as a brand differentiator.

• Bio-plastics are increasingly recognized as “just” plastics – Compete on price/performance – AND THAT WORKS FINE FOR A BIO-PLASTIC SUCH AS PLA

Norming & Forming Storming Performing “Bioplastics “Bioplastics “Bioplastics are for sequester = Biodegrading” Carbon” Plastics”

• Biobased = exception • Carbon footprint • Biobased = expectation • Litter focused focus • Performance is king • “biodegradable” where it’s the highest good

1990’s 2000’s 2010’s

100 60 Our End Applications 58Bn lbs/$50Bn LLDPE 11

Films / Cards Cards Films HDPE 50 14.5 80 17

1 PC 3 Nylon 40 Apparel Home Textiles 4 ABS 5 PS Fibers / 60 14.0 Non-wovens 7 PET

30 Non-Wovens 9 LDPE

40 13.6 Durables PVC 18 20 Durable Goods Folder Cartons

Food 20 5.9 Serviceware PP 10 Food Packaging Serviceware 25 Fresh Food 5.9 Packaging

3.6 Beverage 0 0 Bottles

“The 3 P’s for Ingeo PLA”

Properties Price Preferences

• Broad and Sugars vs oil  Lower carbon adjustable physical footprint and energy property set Favorable yields, usage

Economies of scale  Health Concerns  BPA free Feedstock hedging  Phthalates free capabilities  Acrylonitrile free  Styrene free Cradle to cradle economics

Nonwovens / Fibers Rigids Durables Food Serviceware Films

Key Properties Key Properties Key Properties Key Properties Key Properties

 Range of melting  Stiffness  Stiffness  Stiffness  Stiffness points/crystallinity  Gloss, transparency  Miscibility  Compostability  High gloss and levels transparency  Printability  Improved flow  High versatility for  Tunable hydrolysis injection, extrusion  Dead fold / twist  Weight reduction (vs.  Chemical resistance  Hydrophilic / moisture and coating retention PET) wicking processes  Grease, oil and aroma

 Inherent odor barriers resistance  Chemical resistance  UV resistance  High throughput  Low bonding temp

• Low polymer thermal shrinkage means high resolution printing of the most complex parts • Strong Ingeo fusing performance means it’s easy to use and performs well on most prints • Low Ingeo melt point means safer, lower temperature printing. • Very low emissions with Ingeo means no unpleasant odors

Improved Stiffness with Crystalline Ingeo for Practical Temperature Range of Hot Foods 100

~40% increase ) 80 in stiffness

Mpa 60 High Productivity Grade 40

20 Incumbent Modulus ( Modulus 0 60 70 80 90 100 110 120 Temperature, °C

Existing Ingeo Grades

New High Productivity Ingeo Grades: ~ 70% shorter cycle times

Temperature

© 2014 NatureWorks 23 Price: Ingeo can compete with rigid plastics (PS, PET) since: 1: Sugar-to-polymer yields allow for feedstock cost competition with oil 2: Plant yields, CAPEX, OPEX are comparable with PS/PET

Polymer Technology Overall Kg sugar for Process Yield 1 kg polymer Bio PLA (Ingeo) Sugar to PLA via lactic 80% 1.25 acid and lactides Bio PP Sugar to ethanol to 47% 2.14 propylene to PP Bio PET Bio MEG + Bio PTA from 36% 2.77 sugar Bio PE Sugar to ethanol to 31% 3.22 ethylene to PE

$250 PET $200

Above lines, Ingeo wins $150 PS $100 Material Indifference Curve $50 Cost of Oil ($/bbl) Oil of Cost Below lines, PET/PS wins $0 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Cost of sugar (c/lb)

PET Analysis from McKinsey margin models, CMAI, February 2006

$250 For Example • When sugar cost ~$.17/lb, the cost $200 of feedstock per lb of Ingeo is the

Above lines, same as the cost of feedstock per Ingeo wins lb of PS when oil is ~$50/barrel $150 • OPEX and CAPEX arePS similar. • The rest is scale… $100

$50 Cost of Oil ($/bbl) Oil of Cost Below lines, PS wins $0 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Cost of sugar (c/lb) Cellulosic sugars Gen 3 sugars PET Analysis from McKinsey margin models, CMAI, February 2006

Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio.

GENERATION I: 1st step GENERATION I: 2nd step GENERATION II GENERATION NEXT

Where we are today Where we are going now Next 3-5 years And next?

Dextrose from corn starch Sucrose from locally Lignocellulosics: Sugars CO2 to lactic acid abundant materials such as from bagasse, wood chips, technology? “Bridging Crops” sugar cane switch grass or straw. CH4 to lactic acid technology?

• In non-legislated markets/applications, “carbon footprint” does not create a “green premium”

• Health & safety perceptions with some plastics increasingly drive materials substitution – “BPA free – “Phthalates free – “Acrylonitrile free – “Styrene free … Greenpeace’s “Pyramid of Plastics”

“IMPACT OF INGEO CONVERSION” • Carbon savings Environmental • 75% reduction in CO2 emissions

• Equivalent to 1,320 MT CO2/year savings

• Ingeo out performs polystyrene • Stronger/less breakage Performance • Better lid adherence • Lower temperature filling (less energy use) • Maintained line speed and shelf life

• Addresses consumer concerns • Well received by key opinion leaders Consumer • Reduction in human toxicity • Did NOT increase our retail price & Cost

Stonyfield CEO Gary_Hirschberg, Innovation Takes Root Conference Keynote: “Inventing a WIN-•WIN-•WIN-•WIN-WIN FUTURE”, February 21, 2012

2005 – 2013 Footprint in the market

6 X

1 Billion lb Milestone

aggregate volume in the market as of 2013

2005 – 2013 Footprint in the marketToday

Poised for 6 X Strong Operations Growth Startup & Established 1 Billion lbMarket Seeding Technology & MilestoneIntellectual Property Established aggregate volume in the market 1990-2001 2002-2005 2006-2013as of 20132014 - forward 4k -8k mt 2002 -140k mt 2006 - 24/7 Blair Expanding pilot plant facility @ Blair. operations at Blair customer & 2003 -largest 2013 – 150k ton product base. lactic acid plant expansion Plant 2

• Mulch film • Shopping bags Rigids Films

3D Printing Nonwovens Durable Taiwan Japan

Food Service Rigids

Fibers Durable

Thailand Australia / New Zealand

1-in- 5 coffee cups is made of Ingeo Rigids Food Service

Food Service Foam

Avitez’s Bottle

Doi Chaang’s Cup Chaho’s Cup

Marc Verbruggen

NatureWorks LLC www.natureworksllc.com

@natureworks

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