NeoPentyl Glycol (NPG) INVESTMENT OPPORTUNITY SCORECARD CHEMICALS

October 2020 CHEMICALS High Potential Moderate Potential Low Potential (NPG) OPPORTUNITY DESCRIPTION: Opportunity to setup a NeoPentyl Glycol (NPG) production facility of ~25 - 50 KMT in KSA to cater regional and global demand

DEMAND INVESTMENT OVERVIEW MARKET SIZE, KMT INVESTMENT HIGHLIGHTS VALUE PROPOSITION . Expected Investment size of USD 116 Mn 3.7% . KSA has a strategic location and access to feedstock enabling it to serve . Plant capacity: 25-50 KMT emerging markets like India, Africa and South East Asia 812 843 727 755 783 9 702 15 16 . KSA can leverage favorable trade agreements (eg: GAFTA) and strong logistics 148 . Expected IRR: More than 12% 12 12 13 infrastructure to enhance export capability 5 . KSA is one of the largest chemical producers in the world and contributes ~10% 797 827 to the global output 690 715 742 769 . Opportunity for first mover advantage due to non-existent local production of NPG and lack of competition from major global manufacturers

2020 2021 2022 2023 2024 2025 KSA Global

KEY DEMAND DRIVERS MARKET OVERVIEW . NPG is largely consumed by powder coating resin and high GLOBAL TRENDS solid coating resin industries . US, Western Europe and North East Asia (Japan & South Korea) are the current net exporters, while the rest of the world are . Both end-use industries expected to grow substantially due net importers of NPG to renewed focus on environmental sustainability, resulting . Asia is the leading consumption market, owing to the strong growth of automotive & transportation and building & construction in the growth of NPG industries . Rising demand for paints & coatings, and plasticizers is expected to generate healthy demand for NPG in Asia . China is the most prominent market in Asia, primarily driven by growth in Chinese Oxo chemical industry . Booming construction sector in emerging economies of . Central Eastern Europe and Indian Subcontinent rely totally on imports. Healthy growth rates are expected in these regions Asia, such as China, India, Indonesia and Malaysia is expected to boost the growth of NPG market in the region

2 CHEMICALS NeoPentyl Glycol (NPG) ENABLING SUPPLY FACTORS SCALABILITY AND LOCALIZATION IMPORT DEPENDENCY ENABLERS Grade: Low Medium High

. Easy access to key raw materials for NPG production in KSA – and . No local production of NPG in KSA, and . Up to 75% of project financing by Saudi Industrial Isobutyraldehyde 100% of the entire Middle East and Africa Development Fund (SIDF) . An MoU has been signed to establish an automobile manufacturing plant at the Sudair region demand is met by imports . 2-year grace period for the repayment of loans Industrial City, located at 120 km from Riyadh and 160 km from Qassim. These . Expat worker levy waived-off for industrial investments will provide opportunities for downstream integration manufacturers until October 2024

COST OF DOING BUSINESS IN KSA NeoPentyl Glycol (NPG) value chain Factor Ranking Amongst Regional Peers Ethylene Neutralization Propionic Propionic acid salts Electricity tariffs for $48 industrial players /MWh Air/O Formaldehyde . Unsaturated 2 polyester resins Synthesis gas Oxidation Cannizzaro NPG Hydrogen . Coating resins Productivity adjusted $3.3 wages /hour POx/Reforming Hydroformylation IBAL NBAL Natural Cannizzaro TMP Logistics gas Propylene Performance Index 3.2 Air/oxygen Formaldehyde (1 – 5) steam Methanol Hydrolysis & Carbonylation Formic acid separation Customs Clearance Index 2.7 Key stakeholders (1 – 5)

Ease of getting credit (0 – 100) 50

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# SCORECARD SECTION DEFINITIONS

Size of market in value/volume in KSA and/or Region (MENA/GCC) covering future projections based on available estimates 1 Market size from published /government sources 2 Demand drivers A select number of factors that will influence future demand for the related product/service An overview of key financial metrics summarizing the investment opportunity along with the expected return based on the 3 Investment highlights suggested investment size

4 Value proposition Summary of key differentiators that position KSA as a strategic choice over other regional/global peers

5 Market readiness An overview of KSA market structure, market maturity and level of participation by local and global players

6 Competitor analysis List of the local & international players manufacturing the underlying product in Saudi Arabia and their market share

7 Global trends Latest business developments within the sector/product category

Ease of scaling the business across the value chain or into new adjacent products or geographies that would maximize the 8 Scalability and localization opportunity’s investment returns and the ability and potential to locally manufacture the product and its components An overview of the countries from which Saudi Arabia is importing the product and their value/volume and share in total 9 Import dependency imports 10 Value chain analysis The process or activities that would potentially need to be carried out to deliver the underlying product or service Government institutions, organizations, and/or authorities that participate or influence the market for the underlying 11 Key stakeholders product/service

12 Enablers Factors that enable investment in the underlying opportunity

13 Cost of doing business in KSA Key factors that position KSA as a competitive destination for investment in the region

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