2016 ANNUAL AND SUSTAINABLE PERFORMANCE REPORT ENGAGING TOMORROW INNOVATING STAKEHOLDERS WITH OUR FOR

SHARING HIGHLIGHTS OUR 2016 IN ASIAAND GROWING

DAILY LIVES VITAL TO CHEMISTRY

SHARE 03 Thierr y Le Hénaff reviews Arkema’s outstanding 2016 performance A special report on an eventful year

10 YEARS OF SUCCESS GIVES US CONFIDENCE IN THE FUTURE INNOVATE 07 Chemistry that is a wellspring of innovation in all our markets rkema turned 10 in 2016. 08 Our products address today’s major challenges, Ten years that transformed us into a world-class, efficient, creative, agile including lighter materials, eco-sustainability and new energies producer of specialty chemicals and advanced materials, with a balanced 16 Digital transformation, a tremendous source of innovation regional footprint. 20 R&D focused on the markets of the future Ten years that proved we have both the right strategy and solid foundations Afor moving forward with confidence and ambition. Tackling the future with confidence means SHARING a bold ambition to design and invent materials and innovative solutions that are ever more useful in addressing GROW society’s major energy and environmental challenges. 27 10 years of regional rebalancing This goal spurs us to INNOVATE continuously and make our customers the core 28 A winning strategy in North America focus of our growth. We innovate through applied R&D that helps improve our customers’ 32 , Arkema’s growth engine in competitiveness in increasingly demanding markets. We innovate by investing in disruptive projects that anticipate their needs. And we also innovate in terms of our internal processes, such as our digital transformation, to better serve them. It also means continuing to GROW by identifying and seizing opportunities in all ENGAGE our markets and in the most dynamic regions. 37 Materiality assessment adds a new dimension to our CSR Lastly, it means becoming even more ENGAGED in corporate social responsibility 43 Arkema gets behind sustainable growth by cutting (CSR) and sustainability. We take steps to improve our environmental footprint and the water and energy usage and promoting a circular economy safety of our employees and neighbors, innovate to meet major social challenges, foster 46 Our priorities: employee safety and operational our employees’ collective and individual development, and cultivate interactions with excellence our stakeholders. 48 An HR policy to retain our employees The 10 years spent transforming ourselves demonstrate the soundness of our major 54 Common Ground® program: reaching out to the world of education industrial projects, the value of our innovation efforts, and the collective energy of our workforce of 19,700 talented individuals. All these advantages give Arkema tremendous growth potential. There’s no doubt in our minds that this 10-year-old has a bright future ahead. SHAREHOLDERS’ NOTEBOOK Governance and financial performance INTERVIEW WITH THIERRY LE HÉNAFF Chairman & Chief Executive Officer

AN 2016 was a year of record financial results for Arkema. It was also an eventful year. We celebrated our 10-year anniversary at our sites worldwide. We made promising OUTSTANDING investments in production capacity, especially in technical polymers and to acquire PERFORMANCE Den Braven, which makes our subsidiary Bostik a global leader in high-performance sealants. And it was a year that brought partnerships and awards for our innovations, Our excellent performance in 2016 confirms success for our Pebax® polymer at the UEFA Euro 2016, and top finishes for our the wisdom of our last decade, which remade trimaran and monohull racing boats thanks to the materials used in their construction. the company into one focused on specialty chemicals, innovative materials, growth regions We’re proud to share all our successes and highlights with you. and corporate social responsibility.

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02 03 and Coating Solutions — Arkema in Asia, close to commitments — safety, contributed to these results. emerging marketplaces, the environment, innovation, Our people can be proud and in North America, personal and collective of their performance. an area of stable growth. development and open lines of communication with our What drove How are you stakeholders — are backed Arkema’s approaching the next by quantified targets for performance? few years? 2025. To establish that T. L. H. > Beyond financials, T. L. H. > With confidence our CSR and sustainability 2016 was an inflection and ambition. For 2017, processes are on track, we point: several major projects we’re maintaining the bold surveyed our stakeholders in realized their full potential. EBITDA target of €1.3 billion 2016 through a “materiality We began reaping the set in 2014. If we achieve assessment.” It confirmed rewards of adding Bostik that, our EBITDA will have that our priorities match the — which achieved its 2017 risen by more than 65% expectations of the internal growth targets a full year in three years, a growth and external stakeholders ahead of schedule. rate among the best in the we surveyed. We halved our RECORD EBITDA OF In Malaysia, our Kerteh industry. We now have very total recordable injury rate plant, which started up solid foundations, including between 2012 and 2016. €1.19 BILLION in 2015, came to full several product lines with Innovations that promote operating capacity, confirming strong prospects. They sustainability — especially AND EBITDA the growth potential of include Bostik’s , in lightweight materials, thiochemicals in Asia. strengthened by the acquisition water filtration and new MARGIN OF And, buoyed by innovation, of Den Braven in 2016, energies — are core to our our technical polymers technical polymers, molecular growth strategy. Our human 15. 8 % were hugely successful. sieves, downstream acrylics resources staff has taken steps

“ OVER 10 YEARS, ARKEMA HAS CREATED EXCEPTIONAL VALUE FOR SHAREHOLDERS.”

> How would you How does this (with Sartomer and Coatex) to develop the leadership skills describe Arkema’s performance fit into and thiochemicals. We see of women and non-French performance Arkema’s history? our first decade as a step nationals. The Arkenergy in 2016? T. L. H. > It is the direct result and a springboard to even program has cut our energy T. L. H. > Arkema reported of the transformation begun better things. Our clear goal usage 6% since 2014. In record earnings last year. In the moment the company was is to keep growing in the 2016, we introduced the an environment of moderate created and of unflagging future, thanks to the solidly Optim’O program to reduce global growth, we generated innovation. Ten years later, established growth platforms our water bills by 15%. €7.5 billion in revenue and you would hardly recognize I mentioned. All these improvements are increased our volumes by Arkema. For one thing, we’ve positively reflected in ratings 3.2%. Our EBITDA rose shifted the focus of our product How do corporate by specialized agencies. — 12.5% to €1.19 billion — portfolio to specialty chemicals social responsibility its highest level ever. EBITDA and innovative materials. (CSR) and margin grew to 15.8%, Innovation has become our sustainability gaining two points over last essence; Arkema has made contribute to year. And our adjusted net the list of the World’s Top 100 Arkema’s success? income increased by 34%. Global Innovators for the sixth T. L. H. > CSR and All three business segments year in a row. For another, sustainability are integral — Industrial Specialties, we rebalanced the company to our performance. Our High-Performance Materials regionally to strengthen CSR and sustainability

04 2016, AN EVENTFUL YEAR A YEAR OF CELEBRATIONS FOR ARKEMA’S TENTH ANNIVERSARY

MAY 2016: ARKEMA TURNS 10 In May 2006, a few months after its creation, Arkema was publicly listed. Ten years later you would hardly recognize us. Arkema is now an innovative, agile, regionally balanced global company that produces specialty chemicals and advanced materials. All our employees celebrated 10 years of a complete metamorphosis. From May 17 to 28, countless events marked this milestone anniversary at every site. Among the 50 countries participating were Denmark, Spain, , Italy, Dubai, Malaysia, the , the Philippines, Poland, Singapore, Thailand, Turkey, the and China.

THE EXECUTIVE TEAM ALSO HOSTED MAJOR CUSTOMERS AT THREE EVENING CELEBRATIONS IN , PHILADELPHIA AND .

A YEAR IN SPORTS WITH PEBAX®, STAR ELASTOMER

PEBAX®, BEST GOAL SCORER OF THE UEFA EURO 2016! Three hundred of the 552 UEFA ARKEMA STEPS UP COLLABORATION WITH PUMA Euro 2016 players, including In June, Puma unveiled its new evoSPEED and Antoine Griezmann, Olivier Giroud, evoPOWER shoes for the UEFA Euro 2016 and Gianluigi Buffon and Cesc Fabregas, Copa America 2016 soccer championships. Both wore shoes with Pebax® elastomer feature high-end outsoles containing Arkema’s Pebax® outsoles and shanks, which provide thermoplastic elastomer, which is appreciated by support. As of the final on July 10, sports equipment manufacturers for its unique players wearing shoes containing combination of light weight, flexibility, energy return Pebax® had scored 62% of the goals and exceptional reliability. and made 60% of the passes that led to goals, according to the detailed calculations of specialists.

PEBAX POWERED® TEAMS UP WITH MIZUNO RUNNING For the launch in October of the new Wave Rider 20 running shoe, which has a Pebax® outsole, Arkema teamed up with Mizuno in a new video to promote Pebax®’s outstanding properties.

Watch the Pebax Powered® Running with Stretching the limits of performance with Pebax Powered® Mizuno video A YEAR OF GROWTH FOR BOSTIK ADHESIVES

BOSTIK EXPANDS The company also MANUFACTURING CAPABILITIES IN invested in Malaysia SOUTHEAST ASIA and Sweden to supply AND SWEDEN TO KEEP UP WITH the same innovative GROWTH IN THE products. In May, CONSTRUCTION Bostik expanded MARKET production capacity In April, Bostik, our at its Seremban plant specialty adhesives in Malaysia to meet business line, opened growing demand BOSTIK EXPANDS IN HIGH-PERFORMANCE a new plant in the SEALANTS WITH THE ACQUISITION from the construction OF DEN BRAVEN Philippines, in Misamis market in the Central, In December, Bostik finalized a deal to Oriental Province. Northern and Sabah acquire Den Braven, a leader in sealants This increase in regions. A month for insulation and construction in cementitious powder e later it opened a new ( 350 million in revenue). It’s a great production capacity opportunity for Bostik to help consolidate manufacturing plant in is based on its the still-fragmented adhesives and sealants Helsingborg, Sweden cutting-edge polymer market. Through this acquisition, we are to meet rising demand modified binder actively pursuing growth in our High- in the construction (PMB) technology. Performance Materials business segment, market in northern The new Bostik facility which is expected to account for 50% Europe and the Baltic of Arkema’s revenue in 2020. can now supply states. construction customers in the high-growth Mindanao and Visayas regions with tile adhesives, wall finishing products and other construction systems. A YEAR AFLOAT WITH THE ARKEMA LALOU MULTI TEAM

FIRST RECYCLABLE ARKEMA MULTI50 MONOHULL TRIMARAN WINS THE TRANSAT BAKERLY: ARKEMA TRIMARAN DESIGNED USING TRANSAT QUEBEC FINISHES SECOND IN NEW YORK ARKEMA MATERIALS SAINT-MALO RACE On Monday, May 16, Lalou Roucayrol In late 2015, we At 4 a.m. on July 20, crossed the finish line in New York in second began work on a Arkema’s Multi50 place in the Multi50 class. Sailing without high-tech prototype and its crew, led by a daggerboard for six days, the skipper monohull that Lalou Roucayrol, defied the odds to finish the legendary solo incorporated our crossed the finish line transatlantic race. materials and of the 9th Transat innovations from Québec Saint-Malo, the rough sketches winning its first onward. Six months transatlantic race. later, in June, the yacht performed its first tacks in Port Médoc, France. Developed and built in partnership with Lalou Multi, a small business based in southwestern France, the Mini 6.50 has an innovative hull and deck made of the recyclable thermoplastic resin Elium®, a world first.

Experience the trimaran’s arrival Watch an exceptional racing boat take shape in St. Malo, France A YEAR OF INVESTMENT IN ASIA AND THE UNITED STATES

ARKEMA OPENS ARKEMA ARKEMA EXPANDS ARKEMA INCREASES AN INNOVATION INCREASES IN POWDER ITS KYNAR® CENTER IN ITS SPECIALTY COATING RESINS FLUOROPOLYMER POLYAMIDE IN INDIA CAPACITY IN CHINA In June, to support CAPACITY In October, In October, Arkema IN CHINA AND our growth in Asia, THE UNITED STATES we announced announced a 25% ® Arkema opened an To support our plans to build increase in Kynar innovation center customers’ growth India’s first facility PVDF manufacturing in South Korea around the world in to manufacture capacity at the on the campus the sports, consumer polyester powder Changshu complex of the prestigious electronics and resins. The project, near Shanghai. Hanyang University automotive markets, built within The investment in Seoul. The we continue to Arkema’s resin will enable us to new laboratory expand our bio- production complex keep up with high ® embodies a years- based specialty in Navi Mumbai, Kynar demand for long partnership polyamide Maharashtra batteries and water between Arkema production capacity. state, represents treatment. and the university. In September, an investment It will focus on we announced of $15 million research into expansions at the and consists of high-performance Zhangjiagang a world-class polymers and site in Jiangsu manufacturing unit renewable energies, province in China and a dedicated two fields in which and the Birdsboro, laboratory to Hanyang University Pennsylvania facility provide technical excels. in the United States. support. A YEAR OF AWARDS PARTNERSHIPS AND INNOVATIONS

ARKEMA COLLABORATES WITH HP INC. AS IT GETS INTO THE PRODUCTION OF 3D PRINTERS In May, Arkema announced a partnership with HP Inc. through the HP Open Platform. Arkema will design materials for HP’s new Multi Jet Fusion™ 3D printers and spur our own customers’ innovation — in the ELIUM® THERMOPLASTIC RESINS FOR sports, automotive, aerospace and healthcare COMPOSITES EARN A “TECHNOLOGY industries — by giving them the option to use SHOWCASE” LABEL FOR ARKEMA HP’s manufacturing process and our own range In June, at a ceremony attended by of 3D printable materials. Emmanuel Macron, then the French Minister of the Economy, Industry & Digital Affairs, the chairman of the French NGO Alliance Industrie du Futur awarded the “technology showcase” label to Arkema’s new thermoplastic resins for composites.

WITH JARYSOL®, ARKEMA ARKEMA IS THE LEAD PARTNER EXPANDS ITS RANGE IN THE REVERPLAST INITIATIVE, UNDERSCORING OF SOLUTIONS FOR SOLAR OUR COMMITMENT TO “GREEN” GROWTH ENERGY In April, Arkema signed the Reverplast In September, Arkema agreement, a project to use recycled materials to inaugurated the MicroSol-R solar micro-power plant with produce new thermoplastics for the automotive, the French National Center boatbuilding and wind turbine markets. The other for Scientific Research’s signatories were Ségolène Royal, French Minister PROMES laboratory at its of the Environment, Energy & Marine Affairs, Font-Romeu-Odeillo-Via Emmanuel Macron, at the time French Minister facility in southwestern of the Economy, Industry & Digital Affairs, and France. It uses our Jarysol® four other partners. The initiative is part of a new heat transfer fluid, program — Green Growth Commitments — developed by researchers launched by the French government to support at our Jarrie site in businesses’ efforts to create a circular economy. southeastern France.

KYNAR® GRADE FOR WATER ULTRAFILTRATION: FIRST PRODUCTION LINE AND AN AWARD! This innovative PVDF material developed by Arkema can be used to make a new generation of more efficient, energy-saving hollow fibers used in ultrafiltration modules for water treatment. In February, we announced we were building, at our partner Polymem’s plant, the world’s first production line to make the hollow- fiber Kynar® membranes. In June, the Kynar® Find out about membranes won the Pierre Potier Prize, a Kynar®’s advantages French award given to chemical innovations that for water filtration promote sustainable development. OUR STANDING Revenue €7.5 billion of which 2.9% 3 BUSINESS SEGMENTS AND 9 BUSINESS LINES allocated to R&D

COATING SOLUTIONS INDUSTRIAL SPECIALTIES HIGH-PERFORMANCE MATERIALS • ACRYLICS • PMMA (ALTUGLAS • SPECIALTY ADHESIVES (BOSTIK) • COATING RESINS INTERNATIONAL) • TECHNICAL POLYMERS 19,700 AND ADDITIVES • THIOCHEMICALS • PERFORMANCE ADDITIVES • FLUOROCHEMICALS employees • HYDROGEN PEROXIDE 24% OF REVENUE 30% OF REVENUE 46% OF REVENUE

A GLOBAL MANUFACTURER Present in AND IN 2017... 50 NORTH EUROPE countries AMERICA 34% 36% OF REVENUE OF REVENUE

ASIA AND REST OF THE WORLD 133 30% production OF REVENUE sites

WORLD NO. 1 TO WORLD NO. 3 IN OUR MAIN BUSINESSES 3 regional R&D • Specialty • Organic • Adhesives No. 1 Polyamides No. 2 Peroxides No. 3 • Fluorogases and innovation hubs • PVDF • PMMA • Hydrogen Peroxides in Europe, Asia • Thiochemicals • Acrylic Monomers and North America • Coating Resins

05 IN ALL OUR MARKETS CHEMISTRY, A WELLSPRING OF INNOVATION Chemistry is vital to our daily lives. By supplying chemicals and materials to other industries, Arkema’s chemistry helps to clothe, transport, feed, house, and communicate. Our R&D focuses on resins for paint, high-performance plastics, adhesives, additives, fluorogases, hydrogen peroxide, sulfur-containing compounds and other products to meet the world’s biggest challenges both today and tomorrow. In other words, curbing carbon emissions, building eco-sustainable homes, making our daily lives better and more comfortable, developing new energies and conserving natural resources.

MAKING DEVELOPING TRANSPORTATION DESIGNING IMPROVING NEW LIGHTER ECO- COMFORT AND ENERGIES AND CURBING SUSTAINABLE WELL-BEING AND CONSERVING CARBON LIVING EVERY DAY NATURAL EMISSIONS RESOURCES

ELECTRICAL AUTOMOTIVE UTRITION AIR CONDITIONING N ATER TREATMENT SPORTS,AND BEAUTY HEALTH ACKAGING AND PAPER RENEWABLEENERGIES OIL AND GAS P W AND AEROSPACE AND REFRIGERATION CONSTRUCTION AND ELECTRONICS

Acrylic glass for Refrigerant gases Adhesives, sealants Plastics and additives Plastics for Sulfur compound Hydrogen Coatings for Resins and varnishes Plastics to make car headlights, for building air and foams for sheathing ski boots used in peroxide to water pipes to manufacture and flexible lines taillights conditioning and for for insulating materials for electrical and animal feed bleach pulp protect wind turbine to carry oil and windows refrigeration systems buildings cables sports shoes blades and gas Chemistry is infinite in its variety. We develop a wide range of state-of-the- art materials and solutions vital to many key markets. We pioneer disruptive Plastics to replace Refrigerant gases Acrylic glass for Resins for Acrylics for Resins and Polymers for Plastics to bond Products to metal in pipes for automotive illuminated signage encapsulation superabsorbent adhesives for drinking water and protect solar improve oil well innovations that anticipate our customers’ changing markets and requirements. and engine parts air conditioning and recyclable furniture shells and polymers and elastic multilayer filters panel components output protective adhesives packaging coatings for Innovating is a part of our essence that goes beyond product R&D. electronic components Innovation is a hallmark of our industrial processes, support functions and customer relationships: our digital transformation is a prime example. Adhesives and resins Insulating coatings for window Fine powders Protective coatings for composite parts glass and products and synthetic intermediates for glass bottles in airplane fuselages to prevent condensation for cosmetics Explore the wide range and strengths of “Designed by Arkema” innovations in the in double-pane windows following pages.

Fluoropolymers as Resins and additives binders for electric for building paints battery components and metal siding 06 07 1 4 7 IN ALL LIGHTWEIGHT, REINFORCED PMMA: AN EXTREME 7 RECYCLABLE CARS BETTER THAN GLASS POLYMER Thermoset composites Altuglas® ShieldUp is Kepstan® PEKK OUR MARKETS are widely used in an even tougher version (polyether ketone ketone) 6 aerospace, automotive of conventional polymer offers manufacturing and wind polymethyl methacrylate exceptional properties turbine blades. They are (PMMA) that combines suited to the extreme light, have excellent two components demands of aircraft mechanical properties — PMMA and an engines. It boasts and provide a solution elastomer — organized excellent resistance to the weight challenge. on a nanometric scale. to chemical damage But they are hard to The result is perfect and abrasion and can recycle, at a time when transparency combined withstand continuous end-of-life concerns are with very high high temperatures above The Challenge of becoming a major issue. mechanical strength and 200°C. Reinforced with So Arkema developed chemical resistance. Half carbon fibers, it is used Elium®, the only liquid the weight of glass, it is to make light, rigid thermoplastic resin that already being used by composites for structural is processed like a many motorcycle and car and fuselage parts, thermoset resin, yet brands as an alternative replacing metal for LIGHTWEIGHTING makes fully recyclable to glass in windshields about half the weight. composite parts. Elium® and sunroofs. TRANSPORTATION is revolutionizing the composites sector, finding its way into passenger Arkema thermoplastics can be substituted for metal compartments, hoods and wind turbine blades 5 (see pages 22 and 23). or glass to make parts that weigh less, for lighter READY-TO-USE COMPOSITES vehicles and aircraft with improved fuel efficiency and Polystrand® products are continuous lower carbon emissions. And these thermoplastics 2 fiber-reinforced tapes and prepregs made of ULTRA-HIGH- thermoplastic polymers. have a big advantage over thermoset plastics — PERFORMANCE These ready-to-use BOSTIK ADHESIVES polyamides, FOR COMPOSITES they are 100% recyclable! polyvinylidene fluoride Bostik skin-to-core (PVDF) and composite adhesives polypropylenes weigh bond various substrates 30% less than aluminum in aircraft cabins. They but provide similar apply easily in thin layers rigidity and impact (14 to 72 grams per resistance. These square meter), reducing lightweight composites the amount required are used in structural and cutting waste. parts to make airplane cargo containers and truck panels and to reinforce the front 3 ends of cars.

ENGINE PARTS MADE OF HIGH- TEMPERATURE 6 PLASTIC Rilsan® HT (High FULL BEAMS Trimming 100 kilograms Temperature) ON PMMA off the weight of a car saves high-performance Altuglas® polymethyl 0.40 liters of fuel and 10 grams polyamide weighs methacrylate (PMMA) of carbon per 100 kilometers. six times less than steel polymer, or acrylic glass, Reducing an airplane’s and can resist offers outstanding weight by 1,000 kilograms temperatures of up to resistance and saves 6,000 tons of jet fuel, 220°C. Its outstanding transparency superior or 20,000 tons of carbon, properties mean it can to glass. One of its star applications is taillights. over the plane’s 30- to 40-year replace steel and Around 92% of light lifespan. aluminum in complex 4 auto engine parts, passes through Altuglas®, reducing weight and making taillights bright cutting fuel consumption. and easy to see. It’s also It is also a “green” used today to make plastic, made 70% cockpit windows for from castor oil. some small airplanes and helicopters. Look for Altuglas® to be used in airliners in the future. 1

3 2 5 08 09 1 4 7 IN ALL 9 “GREENER” ROADS WHITE ROOFS AS BEAUTIFUL, QUIET Recycling existing AN ALTERNATIVE TO FLOORING OUR MARKETS materials when building AIR CONDITIONING What could be nicer or repairing roads helps White roofs and building than a wood floor that cut down on the amount walls in sunny countries doesn’t lose its shine and of new aggregate reflect light and allow doesn’t scratch? The needed for the job. people to cut back on air secret to getting one? Adding Cecabase RT® conditioning. White Install flooring already additives to asphalt paint that is protected coated with fast increases the use of by a top coat containing UV-cured Sartomer® recycled aggregate Kynar Aquatec® PVDF resins. This coating by up to 70% compared acrylic resin offers much protects against DESIGNING higher light reflectance to standard technology, scratches and stains for by making it easier to than conventional paint. years. Install it with mix into the asphalt. Kynar Aquatec® keeps Bostik’s AxiosTM The additives also lower the paint white for nearly Tri-LinkingTM polymer the asphalt’s application 20 years, without technology; it is much temperature, cutting maintenance, and more than an . ECO- energy usage by as lowers the need for air The membrane it forms much as 50%. conditioning by 15%. when dry keeps the wood from splitting, acts as a barrier against substrate moisture and dampens sound by SUSTAINABILITY 2 5 38 decibels — leaving you with a comfortable Preventing heat loss and minimizing energy usage TRANSPARENT GAS FOR REVERSIBLE living environment NOISE BARRIERS AIR CONDITIONING and happy ears. in buildings, improving acoustic insulation, or using Recognized for its sound Reversible insulating properties, air-conditioning systems, Altuglas® PMMA can or heat pumps, are more sustainable or recyclable materials are all ways be used as a noise gaining popularity barrier on highways, in the residential market. 8 that Arkema solutions help make our homes and beltways and other Easy to use and high-traffic roads. producing three to four ENERGY-EFFICIENT cities greener. 8 The biggest advantage times less carbon than ILLUMINATED SIGNS of Altuglas® PMMA a fossil-fuel-fired furnace, For backlit signs, barriers is transparency, they keep temperatures Arkema has developed of course. They let the optimal year round, Altuglas® PMMA sheets light through and blend providing heat in the with outstanding light into their surroundings. winter and cool in the transmission. Lighting summer. Forane® 410A intensity can be reduced is recognized as one of by 20% and the sheets the most efficient can be paired with refrigerants for heat energy-efficient LED 3 pumps. lamps. Not a bad way to shrink your power bill. SMART WINDOWS Siliporite® molecular sieves are tiny beads that adsorb around 6 7 a third of their weight 4 in water. Window A COATING TO KEEP 9 manufacturers use them WALLS SNUG to prevent condensation Bostik has developed SOLVENT-FREE, 2 in double-pane a leveling coat that ODORLESS PAINT windows. Placed inside provides thermal Synaqua® resin can a frame between the insulation and reduces be used to formulate panes, the sieves protect heat loss by 15%. waterborne, solvent-free 1 the window’s features It preps interior walls paints that have the for decades. for painting just like same high gloss and Another product, conventional coatings. resistance as Certincoat®, is a huge It’s an ideal choice for conventional plus in cold climates. renovating old buildings solvent-based ones. This low-emissivity and improving their Made 97% from The construction and housing sector flat-glass coating makes thermal insulation. bio-based materials, uses 43% of the world’s energy windows smarter by the resin can be used to and generates 23% of greenhouse letting sunlight in and produce paints with very 5 gas emissions. It offers significant keeping heat from low rates of volatile energy-savings potential. escaping. The end result: organic compounds, heating savings of 30%. or VOCs. Its main applications are in interior decorating. Coapur® thickeners optimize paint texture and viscosity, helping them go on easier 6 without splattering.

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10 11 1 4 8 QUALITY WHITE PEBAX® GIVES LONG-SHELF-LIFE IN ALL PAPER SHOES A BOOST FOOD PACKAGING Albone® hydrogen Pebax® elastomer has Multilayer food OUR MARKETS peroxide and Alpure® made diehard fans out packaging — bottles, sodium chlorate are vital of the big sports brands. bricks, bags and trays 10 for bleaching pulp. Its unique combination — are commonplace 9 Arkema’s affiliate of strength, lightness thanks to the excellent Coatex has unique and flexibility goes into adhesive properties knowledge and their high-performance of our functional 9 expertise to improve soccer and running shoe polyolefins Orevac®, IMPROVING EVERYDAY paper coating. Its outsoles, ski boot shells Lotader®, Lotryl® and Rheocoat™ and and more. How do we Evatane®. Manufacturers Rheocarb™ additives know this? Two-thirds use these adhesives to 10 control the viscosity of of the goals in the UEFA combine the advantages the liquid coatings Euro 2016 were scored of different materials applied to the paper’s by players wearing (plastic, cardboard, surface. shoes with Pebax® aluminum) and outsoles! manufacture packaging COMFORT that acts as an oxygen barrier and keeps 2 food fresh. 5 LIGHTWEIGHT 1 and Convenience DESIGNER EYEWEAR SAFER, AND SMARTPHONES “SMELLABLE” GAS You’ll find them at home, in sports equipment, personal ® 9 Rilsan Clear is one We detect gas leaks at of the few polymers to home or on the street MORE DURABLE care products, cosmetics, eyewear, smartphones, combine chemical and immediately by their RETURNABLE impact resistance with distinctive smell. Yet gas BOTTLES packaging and even the pages of this report. thinness, lightness, has no natural odor. Certincoat® and softness, transparency Spotleak®, a Tegoglas®, two glass Sometimes invisible but always vital, Arkema’s and deep, high-gloss sulfide-containing surface treatment colors. Eyewear makers odorant, is added by solutions applied prize these qualities for gas companies to make when bottles are products play a big part in enhancing our daily lives. creating imaginative it safe to transport gas. ® manufactured, designer styles. Rilsan The smell disappears ensure more robust Clear weighs 20% less when the gas is burned. performance and than polycarbonate and prevent scratches. 40% less than aluminum. Bottle manufacturers Our products for consumer Tablet and smartphone use Kercoat® protective applications make up 21% manufacturers have coating to delay the of our sales. recently adopted it to 6 appearance of scratches make ultra-light, and white scuff marks streamlined internal FLUIDS THAT KEEP ® ® on glass and Opticoat casings. Rilsan Clear is IT COOL to mask the scuffs that also a “green” plastic, Forane® refrigerants do occur. Together they 2 made from castor beans. can be found wherever can lengthen the life 8 cooling or freezing is of returnable bottles by required. Examples as many as 50 cycles. include home appliances, car and building air 5 3 conditioning, industrial refrigeration, ALL-NATURAL supermarket cases BEAUTY 10 and refrigerated trucks. There’s strong demand in the cosmetics market KEEPING FOOD FRESHER for natural products. ® Oleris® is a 100% Bostik’s Reseal adhesive bio-based (castor oil) 7 for food packaging seals synthetic intermediate in freshness, yet lets you for flavors and KEEPING BABY DRY open and reclose ® cheese, ham and other fragrances. Orgasol ZeroCreep Avancé™ deli packages dozens Green Touch is another is the latest-generation 7 of times, until it’s all bio-based innovation, Bostik adhesive for gone. Food keeps longer an ultrafine powder disposable diaper and you waste less. used as a texturizing fasteners and elastic side 4 agent in makeup strips. It offers maximum (lipstick, mascara, elastic stretch and powder), skincare perfect adhesion, creams and sunscreens. to move with baby 3 and prevent leaks. It only takes two or three grams of the adhesive to assemble a diaper’s 20 components. Another product for diapers that gets the job done is the superabsorbent polymer 6 (SAP) made with Arkema acrylic acid. Less than 10 grams of this gel can absorb up to 100 times its weight in liquid.

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MORE EFFICIENT LONGER-LIFE BETTER-FILTERED IN ALL 9 BATTERIES SOLAR PANELS DRINKING WATER Battery range and Kynar® PVDF is Arkema has developed OUR MARKETS durability determine a fluoropolymer used a new, particularly the growth of the market in protective sheets sustainable filtration for electric vehicles. for solar back panels to material. It combines We have developed help lengthen their life. Kynar® PVDF’s intrinsic a specific grade of It offers excellent ultrafiltration properties Kynar® polyvinylidene protection against — it is capable of fluoride (PVDF) that the elements — high removing even bacteria improves battery temperatures, abrasive and viruses — with performance. Because it dust, moisture and UV hydrophilic properties. is inert to the electrolyte rays — while staying Filtration systems made Develop ing — the conductive white and reflecting light with this material treat RENEWABLE ENERGIES substance the ions pass to the silicon in the 20% more water without through — Kynar® is photovoltaic cells. using any more energy an excellent binder for and last an extra five the active particles in to ten years in service. the cathodes and anodes that “capture” those ions. Its 5 effectiveness makes CONSERVING it possible to decrease A SOLAR 8 Natural Resources the amount of binder ACRYLIC GLASS by two-thirds and Altuglas® acrylic sheet PROTECTED WIND increase by one-third replaces tempered glass TURBINE BLADES the number of active as the face sheet of Photocure acrylic Arkema materials used in solar panels, particles that drive the photovoltaic panels. coatings made by 8 battery’s performance. Its optical properties Sartomer, an Arkema wind turbine blades and electric batteries — crystal clear subsidiary, are used transparency and UV as a surface coating support society’s transition to new energies resistance — make it for wind turbine blades. especially well-suited for Acrylic coatings harden by making them cheaper to produce and 2 the solar power market. instantly under ultraviolet It helps focus the sun’s light, making this new DURABLE rays directly onto the protective technology more efficient. Arkema is also developing WATER PIPES thin silicon wafers, greener than green: 7 Rilsan® Fine Powder making the panel it is solvent-free and emits solutions to conserve water and make it high-performance more efficient. zero volatile organic coatings are used in compounds (VOCs). available to as many people as possible. place of stainless steel Tomorrow’s turbine to protect water pipes, blades may eventually be pumps and valves from manufactured using our abrasion and corrosion. new Elium® thermoplastic Worldwide, green energies Made from renewable 6 resin, making them ® posted record growth in materials, Rilsan PROTECTING recyclable (see page 22). 2015: investments totaled powder coatings use SOLAR CELLS $286 billion, or twice less energy and emit Evatane®, a polyolefin what was spent less carbon than metal hardened with Luperox® on new coal- and 2 coatings. Their long organic peroxide, service life also lowers gas-fired facilities is used to encapsulate 9 the costs of maintaining silicon photovoltaic ($130 billion), according pipe systems. to the Renewables 2016 solar cells and protect INDUSTRIAL WATER FREE OF SULFUR Global Status Report. electrical circuits. Its 6 high UV resistance and RESIDUE excellent transparency Effluents from refineries, (better than 92%) make petrochemical units 3 it a valued, durable, and and food processing economical material for plants contain sulfur 5 HEAT TRANSFER compounds that build FLUID FOR SOLAR protecting photovoltaic CONCENTRATORS solar cells. up in treatment plants, creating unpleasant Micro solar power plants odors. Arkema has are becoming increasingly developed a hydrogen common. Parabolic peroxide-based process, troughs focus the sun’s Albone®, which rays onto a tube filled eliminates this waste with Jarysol® heat transfer sulfur without generating fluid, which collects and treatment sludge or toxic stores the heat and power. byproducts. The epitome This fluid has excellent of a clean reagent, thermal, chemical and hydrogen peroxide’s environmental properties only byproducts are and was specifically water and oxygen. 3 developed and approved for solar concentrators. 4

1 14 15 SIMPLIFYING EACH STEP IN > functions. The last covers are used properly. This will help THE CUSTOMER organization, management and us understand the best practices WITH DIGITAL EXPERIENCE culture: the idea is to tap our essential for broader deployment. TECHNOLOGY Digital technology is collective intelligence, become more We’re advancing in steps, central to marketing collaborative, share information in a targeted, iterative way. performance, including and work together, by promoting B2B, whether using What are the key factors digital media to attract and adopting new digital practices. “ARKEMA prospects, analyzing in the success of a project data or transforming What will your like this? SEES DIGITAL A Digital the customer experience next steps be? C.A. > You can’t just order people to through customer C.A. > Each of the three cornerstones embrace digital technology. Adoption TECHNOLOGY relationship management will have several aspects, each hinges on a mix of culture and skills. (CRM). Every step in the complete with tangible goals. That’s why our HR teams put together AS A customer experience can Examples include website digital awareness programs specific be simplified by today’s TREMENDOUS Transformation new digital practices. performance audits to make sites to each business and occupation. That includes quickly more user-friendly and better manage We’re also going to tap into the skills SOURCE OF SERVING GROWTH locating a material or contacts and leads to optimize of millennials — defined as 17 to product for a specific business relations. Another is effective 35-year-olds, born in the digital era INNOVATION TO application on a website, collection and use of data from — and lean on “advocates” to As everything today goes digital, we view our own having the website production plants to make facilities encourage people to learn today’s CREATE MORE recognize customers more reliable and move toward new digital work methods. All this will digital transformation as an opportunity to step up and point them toward predictive maintenance. And a third also make us more attractive to the customized information, VALUE ADDED.” our manufacturing and marketing performance. then placing an order is improved knowledge sharing new talents we need, in big data for and tracking its progress and collaboration using an enterprise example. Our digital transformation Christophe André, Executive Vice President, and delivery online in a social network. We’re conducting is a challenge that we must meet dedicated space. pilot projects on these topics to to improve our production, sales Technical Polymers & Performance Additives, is “Customers are at the confirm that the digital resources and marketing performance. — center of our digital and tools provide benefits and transformation,” leading Arkema’s digital transformation project. emphasizes Isabelle Torelli-André, He fills us in on how things are evolving. head of Customer Experience & Digital Marketing at Arkema. How would you describe of our business activities we’ve begun The first tangible signs Arkema’s digital targeted e-marketing campaigns, of the transformation will transformation? collecting more detailed data in the be visible in 2017. They C.A. > New digital practices process. We boosted share of mind include showcasing and tools are radically changing and visibility among both customers products on social media; the way we work, collaborate, and end users, for example, with the strengthening a simpler, DIGITAL TECH ENHANCES INDUSTRIAL do business and interact with Pebax Powered® campaign aimed at comprehensive PERFORMANCE our customers and suppliers. athletes looking for high-performance market-based approach For several years now, we’ve been harnessing the potential of on the web; multi-criteria Chemical manufacturing, like all shoes. Ultimately all this improves innovative digital tools to build and start up our new plants. To design searches (by application, the new molecular sieve production line that began operating in industry, doesn’t exist in a bubble. our performance and benefits properties); and online We see digital technology as a our customers. Honfleur, France in 2016 for example, Arkema enlisted immersive sample ordering. It’s the 3D display systems. Operators could use the spatial representation tremendous source of innovation, beginning of a thorough How will you cascade and virtual reality applications to project themselves onto their future decisive to our growth. The transformation of the shop floor and make suggestions to improve efficiency. “This frontline transformation will update practices the digital transformation customer experience, feedback in the design phase let engineers build a more ergonomic, across all our businesses and across Arkema? coordinated with the safer work environment for operators. It’s a great demonstration of functions, leverage our know-how C.A. > In 2016, Arkema’s digital marketing and sales collective intelligence,” comments Laurent Baseilhac, Vice President, teams of every Arkema and create more value added. transformation became an established Processes at Arkema. business line. project — an ambitious, global project In late 2015, the Kerteh thiochemicals plant in Malaysia began What concrete benefits managed at the Executive Committee commercial-scale production just six weeks after it was commissioned. do you expect from level. It has three major cornerstones. “That’s a record for a plant its size, whose paint was barely dry. Our the switch? The first is business-centric. It aims to digital tools saved us valuable time,” says Laurent Baseilhac. Arkema used simulators to train operators to run the facility, in the same way C.A. > Several projects at the plant improve the customer experience as airlines use flight simulators to train pilots. The operators were or business activity level have paved and their awareness of the Arkema ready to respond to any potential situation as soon as they stepped the way and shown digital’s potential. brand, to provide our business into their jobs. “This eliminated ‘rejects’ and lots of the minor incidents For example, we have used 3D partners with more services and that tend to happen during start-up phases. And most important, we simulations to accelerate the start-up of showcase our knowledge and delivered to our first customers very quickly,” Laurent Baseilhac adds. new production units, shortening expertise. The second centers Spurred by these successes, Arkema’s design and engineering team is engineering time and training on operations and improvements working on next-generation tools. Examples include 4D modeling — the in production, logistics or support fourth dimension being time — for plant construction and smart, mobile operators more efficiently. In some > solutions to help production operators with decision-making.

Strengthen and intensify relationships with customers and markets; 1 showcase Arkema’s brands and know-how.

Streamline and improve our production, innovation and functional 2 support practices.

Expand digital culture and practices to increase our agility, 3 cross-functionality and collective intelligence.

16 17 Before Sartomer’s new website went live, customers had a print catalogue — a sample IN OUR APPROACH card — to help them identify which grade had the properties they were looking for. Then they TO CUSTOMERS requested a sample or technical literature from a technician or salesperson. This entire process can now be completed online. TECHNICAL POLYMERS Click Your Way Paints TO 300 a Picture Sartomer Items n order to bring our technical browsing it. “We sketched out PEBAX POWERED® ith 700 customers in Europe and nearly 300 products TACKLES ATHLETES polymers to a wider audience, scenarios for three visitor profiles: Lightweight, in all, used in markets as varied as 3D printing, we redesigned the way we market shoppers, who are seeking impact resistant adhesives, coatings and food packaging, Sartomer’s market them. We began a solution for a specific market, and flexible with photocure resins business is inundated with requests high energy return, by putting ourselves in our product shoppers, who want to Pebax® soles for information. “Our customers and prospects Icustomers’ shoes. “They’re explore a particular product line, mean outstanding Ware formulators. Their markets change very fast and they need new looking for innovative, ultra-high- and data shoppers, who are performance recommendations on products all the time. We receive countless requests performance solutions that can looking for specific properties,” for runners and for information,” says Caroline Bastien, Chief Executive Officer of soccer players. meet the technical challenges of says Kevin Hanrahan. Visitors To win over this Sartomer Europe. the future, such as lighter, more can pick from three entry points: demanding group, fuel-efficient vehicles, tougher Markets and Applications, Product we launched an IN 2016 SARTOMER DECIDED TO GO DIGITAL and offer its customers a online video solar panels and faster additive Families, and Materials Database, campaign in very high-value-added service that would also attract new customers. “Lots manufacturing,” explains Kevin which features over 200 available partnership with of requests can be handled without direct contact. We redesigned our Hanrahan, Chief Marketing Officer materials. two brands, Puma website with Internet users in mind. The goal is to make it easier for them for Arkema’s Technical Polymers. and Mizuno. The to get information and process their request on line immediately,” explains videos show what From there, visitors navigate Pebax Powered® Julie Haevermans, Marketing Communications Manager at Sartomer. THAT’S HOW ARKEMA’S intuitively through the content — shoes can do “EXTREME MATERIALS” markets, products, applications, during intense In October, the original shop-window website built around products was WERE BORN IN LATE 2016. effort. “We technical data — for a seamless promote Pebax® replaced by a user-friendly, intuitive search tool. Visitors choose a family The new banner encompasses experience modeled after B2C to athletes so of resins and refine their selection based on several criteria, including three major product families: sites. They’re eventually invited, they associate type of product (monomers, oligomers), target application, properties and Kynar® fluoropolymers, Pebax® using “Let’s Run TogetherTM” sports it with enhanced attributes. They can also download technical and safety literature and performance and thermoplastic elastomers and visuals, to contact Arkema’s sales ask to have it order product samples. “We’ve created an online technical assistance ® Rilsan polyamide resins and and marketing teams. “The website included in their option,” sums up Caroline Bastien. alloys. The deceptively simple is where we meet our existing or gear,” says Kevin tagline — “An Extreme World future customers. It reflects our aim Hanrahan. Users create an account and log in to gain access to functions. “Their Needs Extreme Materials” — is of making ourselves more attractive account helps us better understand their needs and ultimately customize illustrated by a video that highlights in our target markets, instead of just their experience,” adds Julie Haevermans. It provides an opportunity to their ability to tackle the challenges presenting a catalogue of products. mine new contacts and leverage the company’s online presence as a of a world in which technical But it’s also only step one in a powerful sales prospecting tool. requirements are being pushed top-to-bottom transformation of the to the limit. At the same time, we entire customer experience,” says Sartomer is aiming to become the sector’s leading online platform, the are underscoring each iconic Kevin Hanrahan. — one Internet users turn to first for information. That would give it a huge brand’s identity with a color: red competitive advantage. — for Kynar®, orange for Pebax® and green for Rilsan®.

Our extreme materials have taken up residence on the Internet. But the www.extremematerials-arkema. com website is much more than a showcase: it guides web users

Technical Polymers FLYING COLORS ARKEMA EXTREME MATERIALS BY THE NUMBERS takes a new position. As with any digital marketing initiative, traffic statistics and analytics help • 9 markets: Automotive and Transportation; Chemical to measure its quality. The numbers are good for Sartomer: in four months, Industry and General Industry; Powder Coatings and nearly 400 accounts were created at its website and almost 60 orders for Adhesives; Construction (Coatings); Consumer Goods, samples were placed on line. The site logs an average of 700 visits a week. Sports and Healthcare; Electronics and Electrical; Energy “Most Web visitors are not current customers and they come back regularly (Oil & Gas); Renewable Energy; and Water and Environment. to find new information,” says a pleased Julie Haevermans. The figures will • 3 product families: Kynar®, Pebax® and Rilsan®. get even better in 2017, when the site is set to add new content • 200+ grades. and features.

18 19 FOR TOMORROW NANOLITHOGRAPHY R&D Etches the Electronics Industry’s Future A newcomer in the semiconductor FOCUSED ON market, we’re making a splash with block

Sustainability copolymers that could push the boundaries of electronics miniaturization. Arkema has teamed up with major European and U.S. Six innovation platforms partners to develop this groundbreaking technology.

or nearly 50 years the to make electronic nanocomponents electronics industry has made that are extremely thin (5 to 10 BIO-BASED NEW WATER ELECTRONICS LIGHTWEIGHT HOME PRODUCTS ENERGIES MANAGEMENT SOLUTIONS MATERIALS EFFICIENCY AND good on the pace of growth nanometers). Just the ticket to push AND DESIGN INSULATION predicted by Moore’s Law: the photolithography envelope namely, doubling the number and keep Moore’s Law in effect! These six platforms address societal issues described among the 17 Sustainable Development Goals (SDGs) established Fof transistors on chips — and thus We already produce block January 1, 2016 by the United Nations 2030 Agenda for Sustainable Development. Governments, the private sector microprocessor performance — copolymers on a pilot scale at and civil society all have a role to play for the goals to be reached. every 18 to 24 months. “Doubling our Lacq facility, as part of the processing power is still vital to European Union’s PLACYD project, achieve the miniaturization and whose partners include the French speed required by increasingly smart research institute CEA-Leti, Intel products, such as smartphones, and STMicroelectronics, among computers, tablets and connected others. The Lacq line can turn out devices,” explains Ian Cayrefourcq, block copolymers with the consistent Science Director at Arkema. quality the electronics industry 196 priority patents filed in 2016 of which 60% involve sustainability issues DARRON JURAJDA, requires. partner SEMICONDUCTOR BUT CONVENTIONAL interview BUSINESS UNIT LEADER 7,678 patents held by Arkema PHOTOLITHOGRAPHIC BUOYED BY THESE RESULTS, AT BREWER SCIENCE TECHNIQUES ARE NOW ARKEMA HAS SIGNED AN R&D 2.9% of company revenue allocated to R&D RUNNING INTO A PHYSICAL AND MARKETING PARTNERSHIP LIMIT: the wavelength of the beam AGREEMENT WITH THE U.S. What does the strategic R&D up to commercial used to pattern printed circuits. COMPANY BREWER SCIENCE, partnership between semiconductor 1,500 researchers “This floor — around 40 nanometers a global leader in materials for Brewer Science and production. — can still be lowered, but only the microprocessor industry (see Arkema aim to achieve? 13 R&D centers in three major regional R&D hubs: Europe, North America and Asia through complex processes that opposite). The pairing creates a D. J.: We’re combining What is the partnership’s increase production costs. For the serious contender to reach the our strengths to greatest strength? first time ever, the price of electronic next technology milestone set commercialize the D. J.: The way we 1 incubator to develop disruptive innovations components is no longer falling,” by the Semiconductor Industry materials needed for complement one 1 the next generation another. Arkema notes Ian Cayrefourcq. Association : circuit etching smaller of semiconductors. brings its expertise than 10 nanometers by 2019. in block copolymer THIS IS WHY ARKEMA’S BLOCK Arkema and Brewer are banding What steps have you manufacturing and COPOLYMERS ARE SPARKING together to tackle this immense already completed? Brewer Science A TOP 100 MORE THAN 50 PARTNERSHIPS SO MUCH INTEREST. They can challenge. — D. J.: Working as a brings knowledge in GLOBAL INNOVATOR We pursue open, connected innovation, using self-assemble their molecules team, Brewer Science formulating resins In 2016 and for the sixth straight year, the best scientific expertise and the latest on a nanometric scale, creating and Arkema scientists to produce materials Arkema was included in the Top 100 tools, through partnerships with 50 top schools, and engineers have for the semiconductor geometric patterns — nanolines 1. The Semiconductor Industry Association Global Innovators ranking — compiled universities, and public research organizations demonstrated pilot-scale industry. This enables by Clarivate Analytics, formerly around the world. and nanocontacts — that can be includes all of the industry’s manufacturers. production of high-quality us to deliver high- Thomson Reuters. precisely adjusted. This directed In its International Technology Roadmap for directed self-assembly value-added products self-assembly lithographic Semiconductors 2.0 (ITRS 2.0), it regularly (DSA) materials. that meet the emerging process, also known as DSA sets new technological milestones (or nodes) It’s an important step needs of semiconductor nanolithography, can create patterns for them to achieve. in bringing DSA from manufacturers.

20 21 LESS ADHESIVE Current wind turbine FOR blades made of thermoset composites TOMORROW require adhesives that are often time-consuming and expensive to process. Blades made from Elium® thermoplastic ® resin can be assembled using low-temperature adhesives or, for some parts, simple heat welding. Less adhesive ELIUM means lower FOR RECYCLABLE COMPOSITES manufacturing costs. Elium®, a thermoplastic resin developed by ELIUM®: Arkema, reinforced with carbon or glass THE RECYCLABILITY BONUS fibers, makes tough, lightweight composite The installed base of ® wind turbines around parts. Elium composites make vehicles lighter the globe spins blades totaling several million and improve the performance of wind turbine tons of epoxy or polyester composites. blades. And, unlike thermoset composites, they These thermoset materials are are fully recyclable, – better for the environment. challenging to recycle, a fact that will pose a growing environmental headache as REDUCING installations multiply CREATING and age. Arkema meets this challenge Automobile with Elium®, the first thermoplastic resin the Wind Turbines of the Future for recyclable wind Pollution turbine blades. THE WIND AT ELIUM®’S BACK LIGHTER VEHICLES WITH ELIUM® A 95-GRAM TARGET To comply with increasingly strict carbon emission standards, In 2020, the carbon emission cap The number of wind turbines installed worldwide grew PARTNERING WITH 1 A SPECIALIZED carmakers are striving to trim vehicle weight. We’re a key partner for new cars in the European Union 17% in 2015 . We are on the cutting edge of innovation COMPOSITES LAB in this weight-loss program. Up to 30% lighter than aluminum will drop from 130 grams to 95 grams in this booming market, working with our partners to Arkema is working and 50% lighter than steel, Elium® resin composites offer the a kilometer. To achieve this target, develop a new generation of wind turbine blades made alongside the Institute mechanical properties auto body parts demand and are lightweight carmakers are designing lighter vehicles from Elium® thermoplastic resin. High-performance for Advanced replacements for metal structural parts like welded sheet metal by replacing metal with composites. composite parts manufactured using Elium® resin reinforced Composites components, flooring, and reinforcing bars. They have two major At once light, tough and, most important, with glass fiber offer serious advantages. First, Elium® Manufacturing advantages over thermoset composites: superior impact resistance recyclable, Arkema’s thermoplastics resin can be processed using the same methods employed Innovation (IACMI), compared to thermoset composite parts and recyclability that are a part of this solution. for thermoset resins, thus requiring no additional capital a major U.S. program enables carmakers to comply with the new European Union outlay. Second, Elium® composites have ten times greater to invest in composites. regulations on recycling end-of-life vehicles. The first cars featuring fatigue resistance than epoxy thermoset composites. Lastly, In January 2017, Arkema composites are expected to roll off assembly lines in 2020. unlike thermoset composites, Elium® thermoplastic resin we and our partners is recyclable (see opposite). Arkema’s Elium® is a breath produced a nine-meter of fresh air for wind power. blade prototype made ® n partnership with the M2P Institute 1. Source: Global Wind Energy Council (GWEC) of Elium resin to of Technology Research in Metz SHEDDING demonstrate its Fast RTM MORE WEIGHT: industrial feasibility, and several French carmakers and mechanical properties automotive OEMs, Arkema joined Project THE INNOVATIVE and environmental the Fast RTM Technology Platform RILSAN® MATRIX benefits. Iin 2015. “In June 2016, we set up a With the support of the Canoé R&D rkema has teamed up with Plastinov pilot-scale unit to demonstrate the feasibility center in southwestern France, Arkema and other innovative small businesses of mass-producing automotive parts has developed Rilsan® Matrix tape. on the Effiwind project in France. made of Elium® composite, at the speeds Introduced in March 2017 at the JEC World 2017 international composites The goal is advanced wind turbine required by automakers: a part every ® ® ® event in Paris, Rilsan Matrix is blades made from Elium resin. In two minutes,” says Michel Glotin, Director, Rilsan Matrix a high-temperature-resistant polyamide Alate 2016, Effiwind achieved a milestone when Materials Science at Arkema. A winner for composite ribbon reinforced with continuous it crafted an initial 25-meter blade. “We proved for process technology at the most recent automotive parts carbon fiber and packaged in tapes the project’s industrial viability,” comments JEC Innovation Awards, Fast RTM is and rolls. Automotive OEMs will make Michel Glotin, Director, Materials Science at expected to run through December 2017. composite parts by using robots to Arkema. “Elium® resin is currently the only And pave the way for lighter, lower- position the thermoplastic tape thermoplastic compatible with conventional carbon-emission vehicles featuring “Made in preforms, then hot-stamp these blade-making equipment and processes.” Soon by Arkema” thermoplastic composites. in a press. The stamped part will Find out about withstand high temperatures and enable to be tested at the Plougras wind farm in Brittany, Elium®’s advantages ® carmakers to combine metal and France, the first Elium blades could reach for wind power composite parts in a single vehicle body. the market by 2019.

22 23 “WE SUPPLY OUR for small-run prototypes, tools, MATERIALS TO FOUR MAIN molds and customized parts. FOR 1 TYPES OF CUSTOMERS.” Recent converts to 3D printing, says Ilias Iliopoulos, medical device makers use TOMORROW Scientific Director at Arkema, Arkema materials to produce IMPACT “ORIGINAL EQUIPMENT AND DESIGN hearing aids, dental and other RESISTANCE MANUFACTURERS, SUPPLIERS prosthetics, and medical LIGHTWEIGHT MATERIALS OF 3D PRINTING SOLUTIONS, instruments. Makers of athletic WELCOME TO THE KEPSTAN® service providers, and end gear create new designs for N3XTDIMENSIONTM MAKES A STRONG users – mainly in industry.” innovative, higher-performing In November 2016, IMPRESSION We partner with customers equipment. Lastly, Sartomer launched Often referred to as to provide products tailored engineering professionals, N3xtDimensionTM, an extreme polymer, to their current needs and Arkema’s Kepstan® architects and designers a new range of products that anticipate future make highly attractive mockups The Future photocure 3D printing PEKK offers a technologies and applications. materials that yields remarkable set of and models using Sartomer OF MANUFACTURING ultra-high-definition mechanical properties. In 2016, Arkema announced resins. prototypes and parts Light and tough, a new materials partnership with superior Kepstan® PEKK is with HP Inc., which has just Arkema is reaping the mechanical properties. nonflammable and can entered the 3D printer market, rewards of a very active 3D Printing N3xtDimensionTM withstand exposure to and another with Prodways, a R&D policy, one that closely materials may take high temperatures, French specialist in 3D printing tracks emerging market 3D printing from abrasion and chemicals. solutions (see opposite). 2 prototyping to mass It is perfectly suited to demand and is open to production. additive manufacturing partnerships with the major 3D printing — or additive parts for aeronautics, THROUGH SUCH users of 3D printing. — aerospace, and oil and PARTNERSHIPS, ARKEMA IS manufacturing — is a revolutionary gas extraction, industries THE LEADING MATERIAL looking for lighter SUPPLIER IN A NUMBER OF new production method. Arkema products and fatigue MARKETS. In aeronautics, resistance under additive manufacturing exploits plays a leading role in this booming extreme conditions. the advanced mechanical Plus, Kepstan’s® properties of Rilsan® and market, providing materials for chemical structure ® optimizes the 3D Kepstan powders (see ARTNERSHIP a wide array of manufacturing P printing process: all of opposite) to produce complex COLLABORATIVE the powder is used up, airplane parts much faster applications ranging from R&D leaving no waste. and more cheaply than the We work hand Economical, usual molding and assembly ultra-high-performing aeronautics to medical devices to in glove with our ® processes. Additive customers and and light, Kepstan manufacturing in the partners to develop gives even the most athletic gear. demanding industries automotive industry uses additive Arkema powders and resins manufacturing new options. solutions. In May 3 2016, Arkema announced a partnership with HP Inc. to develop materials for their “WE ARE new Multi Jet Fusion ccording to a ARKEMA PRODUCES THE printers. In November SmarTech Markets “FUELS” FOR A REVOLUTION we signed a STRENGTHENING industry report THAT IS SHAKING UP partnership agreement published in 2015, MANUFACTURING METHODS with Prodways, OUR POSITIONS IN THE 3D printing posted IN EVERY SECTOR. a French 3D printing 3D printing gives professionals specialist, which will $ Aglobal revenue of $4.7 billion allow us to quickly BOOMING 3D PRINTING that year. Some $900 million of and businesses a way to make bring to market new that was attributed to polymers customized objects without 15 powders that meet the and resins, which are growing the long and costly process of 3D challenges facing billion MARKET BY OFFERING 25% annually. Arkema brings building a mold. Functional the automotive, The estimated size to this particularly vibrant and prototypes, small-run finished aerospace and of the global 3D medical industries. printing market — innovative market a range of parts, and industrial instruments printers, materials A WIDE, VARIED, materials covering every type and devices can be produced and production of printing technology. in record time using in-house services — by INNOVATIVE AND ® printers or those available 2020. That’s three Examples include Rilsan and times higher than ® Orgasol polyamide powders at fabrication laboratories in 2015. (Source: and Kepstan® PEKK powders (“fablabs”) and specialized SmarTech Markets HIGH-PERFORMING design offices. 1. Fused Filament Fabrication (FFF) technology based on 2015 report) for selective laser sintering; depositing a continuous fine filament of thermoplastic TM Sartomer N3xtDimension resin. RANGE OF MATERIALS.” photocure resins for 2. Prodways, an Arkema partner, offers two types of printers: stereolithography and one that polymerizes photocure resins using UV light and material jetting; and another that employs a laser to sinter polyamide powders. ilias iliopoulos, thermoplastic resins used in The printers can be used to mass-produce small parts or scientific director at arkema the Fused Filament Fabrication, more technical prototypes. or FFF, printing process. 3. Close-up of a part made from Sartomer N3xtDimension™ resin, showing the quality of the finish.

24 25 WHERE MARKETS ARE EXPANDING EUROPE

THE LAST TEN YEARS HAVE SEEN 36% EUROPE’S SHARE OF REVENUE of revenue in 2016 versus 58% in 2006 DECREASE, WHILE ASIA’S AND NORTH AMERICA’S HAS RISEN.

e 3.2bn e 2.7bn

2006 2016

NORTH AMERICA With revenue up from €5.6 billion in 2006 to €7.5 billion in 2016, Arkema has never stopped growing and investing in growth regions. We have spent REST 34% OF THE WORLD 10 years working on a strategic rebalancing of our activities among Europe, Asia of revenue in 2016 ASIA versus 25% in 2006 5% and North America.Now, thanks to our targeted acquisitions policy and major e of revenue 2.5bn in 2016 and in 2006 25% investments in production facilities, we’re more international than ever and tapping of revenue in 2016 into the vitality of fast-growing regions. e1.4bn versus 13% in 2006 See our “growth” destinations in Asia and North America on the pages that follow. e0.2bn e0.3bn e1.9bn 2006 2016 2006 2016 e0.7bn 2006 2016

26 27 IN NORTH AMERICA

rheology additives, coating resins (see next page) and photocure resins, themselves the A Winning products of acquisitions: Coatex in 2007, Cray Valley in 2011 and Sartomer in 2012. This has cleared a path for Arkema in thriving markets such as super-absorbents for disposable diapers and personal STRATEGY care products, decorative paints, IN NORTH AMERICA and finish coats. In 2015, we also branched out into specialty adhesives by acquiring Bostik, which has nine sites in the North America accounts for some 34% region. of Arkema’s revenue. We’ve grown TO DRIVE OUR GROWTH IN steadily here over the last five years, NORTH AMERICA, we draw constantly on our ability to reaping the returns of strategic choices, innovate. “Our R&D centers play a crucial role, giving us access AIMING FOR SALES EXCELLENCE In 2012, Arkema introduced in North America a pilot program including a product portfolio focused to the most vibrant segments for sales and marketing excellence, taking it company-wide of the economy,” explains Rich in 2016. The program goal is to stay focused on customer on high-growth markets, a targeted Rowe. In industrial specialties, expectations and promote better solutions by speaking with we upgraded our fluorogas one voice. The program draws on tools that support this production ramp-up, and R&D tied range, used in air conditioning, cross-functional approach, including customer relationship to bring it in line with new management (CRM) systems, sales rep meetings by market, directly with our customers. environmental regulations. and training. Because a single customer often buys several To make lighter cars and Arkema materials, each made by a different business line, the program instituted global key account managers, he size of its economy Arkema’s global production airplanes, Arkema’s researchers or KAMs, based as needed in North America, Europe or Asia, and its regular growth technologies and assets,” work closely with U.S. to coordinate the different activities and offer the best solutions. — 2 to 2.5% a year sums up Rich Rowe, CEO manufacturers to replace since 2010 — make of Arkema Inc. In 2016, steel with tough, lightweight North America a Arkema posted growth technical polymers. Another Tkey region for Arkema’s of 3.5% in North America. focus is innovative energy development. We now earn storage, especially batteries for 34% of our revenue here, THE MOST DRAMATIC electric vehicles and electronic up from 25% in 2005. CHANGE IN THE LAST FEW devices. Here our R&D teams All our business lines are YEARS has been integrating have exploited the properties active in North America, our acrylics segment in the of Kynar® PVDF fluoropolymer, with solid positions in United States. The acquisition a flagship Arkema material many markets, including of Dow assets in 2010 gave developed in the United States transportation, packaging, Arkema upstream acrylic more than 50 years ago. This electronics and construction. monomer plants, in Bayport innovative work has created “We’ve been able to and Clear Lake, Texas. positive effects for Arkema take advantage of new We invested $200 million worldwide. “When it comes opportunities by strengthening to upgrade them in several to R&D, we work for Arkema, our product and service steps. These units feed our ignoring regional boundaries,” offering and leveraging downstream activities in concludes Rich Rowe.

2007 2008 2010 2011 2014 2015 2015 2016 2017 Acquisition of Acquisition of Acquisition of Dow’s acrylic monomer Acquisition of Total’s Acquisition of Bostik opens Invented in the United States Investment in $90 million invested Coatex and with Odor-tech, which and emulsion assets, including coating resin (Cray Valley, Bostik, including new units and famous as the base new bio-based to upgrade the it the Chester, produces and the Bayport and Clear Lake plants Cook Composite Polymers) eight production in Dallas, for long-lasting coatings polyamide Clear Lake, Texas, South Carolina distributes natural in Texas. Announcement of a and photocure resin units in the United Texas and and finishes, Kynar® PVDF production capacity acrylics plant. plant where it gas odorants in $110 million plan to upgrade, (Sartomer) activities, States and two Monterrey, fluoropolymer resin in Birdsboro, manufactures North America. repurpose and increase the capacity including five production in Mexico. Mexico. celebrated its 50th birthday. Pennsylvania. rheological of both sites between 2012 and 2014. units in the United States. 28 additives. 2931 IN NORTH 3 7 ARKEMA’S AT THE CLEAR AMERICA BIGGEST LAKE, TEXAS SITE, PRODUCTION we announced SITE IN NORTH in early 2017 that $2.5 billion AMERICA is we would invest R&D THAT IS AHEAD located in Calvert $90 million to further in revenue in 2016 OF CUSTOMERS’ City, Kentucky. It upgrade our acrylic or produces Forane® monomers unit. EVOLVING NEEDS fluorogases, used In 2015, Bostik 34% Arkema has a North American R&D in air conditioning, opened its ninth of Arkema’s sales center in King of Prussia, Pennsylvania. and Kynar® PVDF production site in the About 125 people work there to develop fluoropolymers, United States, paired new materials and new applications for which go into with a training our products. “We have to offer solutions a wide range center, in Dallas, to our customers’ technical challenges — of industrial Texas. and anticipate their needs even before and electronic they’ve articulated them,” explains Ryan applications. Dirkx, Vice President, R&D at Arkema, Inc. Working in close consultation with our SERVICE MAKES THE DIFFERENCE sales and marketing teams, our research- IN COATING RESINS 8 ers strive to foster quality technical rela- After a series of acquisitions — Dow, Cray Valley, Cook Composite tionships with our customers. We often Polymers — our coating resins business has seven production units in 4 ARKEMA, INC. acquire the same equipment as our cus- the United States and generates 40% of its sales in North America. It is headquartered tomers to mirror their operating conditions supplies the biggest paint manufacturers, offering them a comprehen- 1 BEAUMONT, TEXAS 6 3,700 and guide our product development. sive range of binders, emulsions and additives. “They find everything is home to our in King of Prussia, King of Prussia’s research has yielded they could possibly need at a single supplier,” says Dr. Richard Jenkins, thiochemicals unit Pennsylvania. Some employees several major innovations. These include Global Group President for Coating Resins. for North America. 600 people work including the use of Kynar® PVDF as a binder in However, to formulate a paint, manufacturers also need the right ingre- It produces sulfur there. The Sartomer 5 lithium-ion batteries; optimized Altuglas® dients at the right time and in the right amounts. Arkema’s coating resins derivatives used in business line has 3,100 PMMA grades for better LED light diffu- business is organized to be very responsive and to simplify the supply 8 animal feed and several production in the United States sion in buildings and vehicles; and the chain, for example by delivering from among several thousand com- agricultural soil facilities nearby. development of resins for 3D printing. All ponents the specific ones that go into a paint, all at the right time. “In fumigants. THE KING OF address tomorrow’s major energy, envi- addition to a wide range, formulators appreciate anything that makes 3 PRUSSIA R&D ronmental and technical challenges. their job less complicated,” points out Richard Jenkins. 9 CENTER develops solutions for seven business lines. It 4 5 works on both local 7 BIRDSBORO, and global needs, PENNSYLVANIA networking with BOSTIK FORMULATES is home to the Arkema’s European regional plant that and Asian R&D EVER MORE INTELLIGENT produces Rilsan® centers. ADHESIVES and Rilsamid® Bostik, Arkema’s specialty adhesives 2 polyamides 37 business line, has 12 production and Pebax® production sites sites, three technical centers (R&D elastomer. These including and support) and 1,000 employees high-performance 9 in North America. It is active in three materials are used 31 main markets: construction (mortars and to make high- Arkema’s COATING grouts, adhesives, sealants), personal temperature flexible RESIN ACTIVITIES in the United States care products (disposable diapers and lines and hoses in North America feminine hygiene products) and industry for the automotive are managed (packaging, labeling and assembly). ll Arkema business lines have from Cary, North “Bostik products, chosen for the value a marketing and manufacturing industry, gas and oil pipes, ski boot shells Carolina. The they add, are used in almost 60 different presence in North America. Our and athletic shoe facility also houses BREAKTHROUGH IN B2C applications,” comments Bob Marquette, successive acquisitions, notably in soles. a coating resins Bostik has about 35% of the U.S. market for Senior Vice President at Bostik Americas. acrylics and of Bostik, have pushed R&D center. wood-flooring adhesives and surface preparation In 2016, Bostik continued to expand its Athe number of production facilities in the region materials. Over the last four years, a big share line of adhesives for wood flooring and up from 26 in 2012 to 37 today. of Bostik’s growth has come from increased B2C preparation materials. These products activities, notably its growing presence in specialty are sold as a complete flooring systems 6 flooring stores, which offer both professionals and offering acoustic sound and moisture MOST OF THESE PRODUCTION protection, with enhanced cleanup FACILITIES — 31 to be exact — $900 million do-it-yourselfers a complete flooring system that Bostik is meets their project requirements. properties during installation. In the are located in the United States, where headquartered in capital expenditure personal care market, Brilliance™, a Arkema employs 3,100 people. in WAUWATOSA, in 10 years new generation of adhesives, offers In Canada, Arkema has 60 employees WISCONSIN. manufacturers greater uniformity The subsidiary and precise application. Bostik’s fire 1 and one plant that produces hydrogen has 12 production retardant adhesives, used to assemble peroxide for the pulp market. plants in North interior panels for airplanes, increase In Mexico, we employ 480 people America, including passenger safety. Bostik provides 2 at four production sites: two for Bostik, two in Mexico. innovation-driven products that do more one for Altuglas® PMMA and one The region than just stick things together. — accounts for 28% for organic peroxides. of Bostik’s sales.

3 R&D centers

30 31 CHANGSHU, IN ASIA ARKEMA’S LARGEST INDUSTRIAL COMPLEX The Changshu industrial site epitomizes s soon as Arkema Arkema’s sales in Asia, or 10% our exponential growth in China. Located was created in of our revenue,” emphasizes near Shanghai, it had 250 employees and 2006, we set Xavier Durand-Delacre. three units in 2006. By 2016, it was our our sights on To serve our customers we biggest production complex worldwide, Asia, with two have developed production employing 800 people in units manufacturing goals in mind: to tap into the capacity in China on a par organic peroxides, specialty polyamides, A fluoropolymers (Kynar® PVDF), rheology continent’s economic vitality with our regional ambitions. additives, coating resins and fluorogases. It and to rebalance our global In 10 years we’ve invested is also home to an R&D center, the Changshu footprint. Ten years later, we’re more than €500 million in Research & Development Center, or CRDC. on track to achieve both goals. our Changshu site, now our Our revenue in the region has biggest industrial complex increased an average of 10% worldwide with eight a year and Asia now accounts production units (see opposite). for a quarter of our total We have also doubled the earnings. “All Arkema business capacity of our Shanghai lines are contributing to this hydrogen peroxide plant. result,” says a pleased Xavier Durand-Delacre, Senior Vice AT THE SAME TIME, President, Arkema Asia-Pacific SELECTIVE ACQUISITIONS and President, Arkema HAVE STRENGTHENED Greater China. KEY SECTORS. Examples include Casda Biomaterials CHINA HAS SERVED AS (sebacic acid) and Hipro BOTH A BUSINESS ENGINE Polymers (technical polymers), AND A REGIONAL PIVOT acquired in 2012 and POINT IN OUR RISE IN ASIA. rechristened Arkema Suzhou The country’s development Polymers, and the Sunke offered — and still offers — joint venture (acrylics) with growth potential for many Jurong Chemicals in 2014. of our specialties, including What’s more, Sartomer and coating resins and construction Bostik, acquired in 2011 and industry adhesives, polyamides 2015 respectively, also have for lighter automotive dedicated production sites materials, fluoropolymers for in the country. “Arkema has batteries and photovoltaic eight production complexes applications, and high-quality in China and manufactures hydrogen peroxide cleaning 500,000 tons of product agents for electronics. We each year,” sums up adapt our innovative solutions Xavier Durand-Delacre. CHINA, to local market requirements Our strong presence in at our Changshu R&D center China, along with facilities Arkema’s Growth (the CRDC, which works for all in neighboring countries — Arkema business lines) and our including the thiochemicals Shanghai technical laboratory plant in Kerteh, Malaysia and ENGINE IN ASIA (for Bostik). “China accounts the R&D center in Kyoto, Japan for just over one-third of — gives us a solid, sustainable base for continued growth in Asia. “While China is seeing Our share of “made in Asia” revenue jumped from its growth rate level off, other countries such as Malaysia, 13% in 2006 to 25% in 2016. To capture the region’s Vietnam, the Philippines and Indonesia offer attractive growth opportunities, we’ve invested in large-scale opportunities. We have all the strengths we need production capacity in China and Malaysia and located to go after them,“ our R&D teams close to local customers. says Xavier Durand-Delacre.

1984 1993 1996 1998 2000 2005 2008 First sales Opening of the Launch of the Creation of the copolyamide Start-up of the first units in Changshu, China, Start-up of a unit Doubling and marketing Kyoto Technical Changshu joint venture in Shanghai, China. producing fluorogases and polyamides. to produce organic of hydrogen peroxide office in China. Center (KTC), industrial Acquisition of the PMMA plant Start of hydrogen peroxide production peroxides production capacity an R&D facility, project in and investment in the organic in Shanghai, China. in Changshu, China. in Shanghai, China. in Japan. China. peroxide unit in South Korea. Start of copolyamides production in Shanghai, China. Our distribution affiliate begins operating in Shanghai, China. 32 3333 IN ASIA 1 4 ARKEMA OPERATES IN JAPAN, THE KYOTO 12 PRODUCTION TECHNICAL CENTER UNITS within a (KTC) adapts technical TECHNICAL POLYMERS, THIOCHEMICALS AT FULL 200-kilometer radius polymers to the local e1.9 billion THE RECORD-SETTER CAPACITY IN KERTEH of Shanghai. Nine automotive, electronics One of our oldest business lines in China, going back to the Commissioned in 2015, the regional are located in or and sports gear markets. in revenue in 2016 1990s, Technical Polymers has become our biggest in Asia. thiochemicals complex in Kerteh, Malaysia around Changshu, Sartomer has a or “Year after year, we jumped on opportunities, reporting average reached full capacity in 2016. It produces eight within our laboratory in Yokohama. growth in the double digits for the last decade. 2016 was a record sulfur derivatives for the agrochemical biggest industrial The organic peroxides 25% year for us in terms of volumes and market share in our strategic and petrochemical markets as well as complex (see previous business line also has a of Arkema’s sales markets,” says a pleased Julie Zhang, Group President of the mercaptans supplied to downstream page) and a Bostik production plant (a joint Technical Polymers business line for the Asia-Pacific region. partner CJ Bio, which manufactures plant close by. We venture with Yoshitomi) Its success has been driven by adapting products to local market bio-based amino acid L-methionine for operate a hydrogen in Fukuoka and Bostik needs with the support of the Arkema R&D centers in Japan, France animal feed. “In this relatively non-cyclical 3 4 peroxide production has created the Bostik- and the United States, enhanced since 2013 by the addition of the market, demand remains quite high,” site in Shanghai, a Nitta joint venture in Changshu R&D center. “The opening of the CRDC was a shot in comments Kenny Gan, Managing Director technical polymer Osaka. the arm for our activities,” says Julie Zhang. Technical Polymers’ for Southeast Asia at Arkema. plant (PA10 achievements include validating Rilsan® HT polyamide to replace Built in under three years, the greenfield polyamides) in metal in automotive applications and the adoption of Kynar® Kerteh complex was Arkema’s biggest Zhangjiagang and PVDF for use in electric vehicle lithium-ion batteries and to protect industrial investment since 2006, with a 1 the Sunke acrylic 4,500 photovoltaic panels. price tag of about €200 million. monomer unit, a joint 5 employees Thanks to our substantial investments, Technical Polymers has three venture with Jurong IN MALAYSIA, including production units in China: PVDF fluoropolymers and copolyamides 2 Chemicals, in Taixing. Arkema has set up in Changshu and bio-based polyamides in Zhangjiagang. This A thirteenth unit, a thiochemicals unit 2,900 production capacity will be further scaled up consistent with our Kerteh Complex located 1,000 in Kerteh serving all in China ambitions for Asia. by the Numbers kilometers further of Asia. Operational north in Hengshui, since early 2015, it is 14 hectares manufactures sebacic our largest industrial acid. investment to date. 2,000 tons ARKEMA has an BOSTIK has two plants, of structural steel R&D center in in Johor Bahru and 5 Changshu, China Seremban, specialized (see opposite) and in cement-based 70 kilometers a Bostik technical construction products: 29 of pipes laboratory in adhesives and sealants production sites 6 Shanghai. for tile and expansion joint sealants for flooring. 8 STRATEGIC PRESENCE The Seremban plant’s of them IN JAPAN capacity was expanded The Kyoto Technical Center (KTC) in 2 in 2016 to keep pace in China Japan works closely with the biggest with the growth of the GUANGZHOU names in electronics, automotive CHANGSHU: R&D UNABRIDGED includes a production construction market in manufacturing and sports gear and The Changshu R&D Center (CRDC), which opened in 2013, em- unit and a laboratory the region. tailors technical polymers to their re- ploys nearly 60 people. “Most of our researchers are Chinese and quirements. “Mizuno and other well- have international experience,” points out Denis Bortzmeyer, the for Sartomer ® specializing in known brands use Pebax in their Director. It’s an ideal combination that fits into the local innovation fter a decade of investment photocure resins and high-performance running shoes and ecosystem while leveraging Arkema’s international reach. soccer shoes,” comments Denis Tual, The CRDC has two missions. First, it develops and upgrades pro- and targeted acquisitions, all nine a unit to produce 6 Nearly of our business lines have Bostik adhesives. President at Arkema Japan and Arkema cesses at Asian units to make new products, adapt production sites South Korea. to changing regulations and trim manufacturing costs. Changshu’s production sites in Asia. “The plants ARKEMA OPERATES €800 million Marketing teams maintain key rela- R&D teams, for example, doubled the life of an expensive catalyst are intended to meet regional IN SOUTHEAST ASIA in capital expenditure tionships with leading Japanese man- used to produce fluorogases. Aneeds,” says Xavier Durand-Delacre, Senior out of our sales and on production facilities ufacturers that are global Arkema Second, the center tailors Arkema products to the specific features Vice President of Arkema Asia-Pacific. 3 marketing office in partners. Examples include Daikin for of all Asian markets, including electronics, automotive, energy Singapore, which in Asia over 10 years refrigerants in China and Sumimoto (batteries and photovoltaics) and sports equipment. For instance, AMBITIONS BEYOND CHINA SOUTH KOREA provides commercial Seika for superabsorbent polymers in it developed a special grade of acrylic emulsion for paints sold has two Arkema representation France. in the Chinese market that was later adopted in Europe because We offer our entire portfolio of specialties production sites: for most of our nine in Asia via marketing operations that blanket of its performance. This kind of product localization occurs in all PMMA resins in business lines. the business lines. Increasingly, the center goes beyond just local the region. Outside China, we employ almost Jinhae-gu and Coating Resins & needs, creating innovative products specifically for the Asia region. 200 people in Japan and South Korea, where organic peroxides Additives has a The CRDC is a part of the Arkema R&D network that includes the we earn 17% of our regional revenue. in Chilseo through production facility KTC in Kyoto, Japan, the brand-new innovation center in Seoul, The 10 countries of Southeast Asia account a joint venture in Malaysia. Bostik South Korea, as well as its European and U.S. counterparts. for 15% of regional revenue. Arkema has with Seki. A local has five sites in the innovation center has region, in Thailand, 2 650 employees there, including 120 at been based on the the Philippines, R&D centers the Kerteh plant in Malaysia. Hanyang University Indonesia, Vietnam campus in Seoul since and Malaysia. 2 2016. technical laboratories

2010 2011 2012 2013 2014 2015 2015 2016 Start of third- Start-up of units to make Acquisitions The Changshu R&D Creation Acquisition of Bostik and its technical Start-up of the Opening of an generation fluorogas Kynar® PVDF and Coatex of Casda Center (CRDC) opens of the Sunke joint center in Shanghai, as well as its units thiochemicals innovation center production by rheology additives in Biomaterials and in China. venture to produce in Changshu and Guangzhou, China; plant in Kerteh, in South Korea, at Arkema-Daikin Changshu, China. Hipro Polymers The coating resins acrylic monomers India; Thailand, the Philippines, Malaysia. Hanyang University Advanced Acquisition of Cray Valley in China. emulsion plant in in China. Indonesia, Vietnam and Malaysia in in Seoul. Fluorochemicals. Coating Resins and Changshu, China Southeast Asia; and Australia and Sartomer in China. comes on line. New Zealand. 34 35 IN SUSTAINABLE GROWTH

Adding the Next Dimension to CSR and Sustainability THROUGH BROADER DIALOGUE With Our Stakeholders In step with current trends, we are inviting external stakeholders, such as customers, suppliers, NGOs and journalists, to assess our corporate social responsibility (CSR) and sustainability commitments. Heike Faulhammer, Vice President, Sustainable Development at Arkema, provides more details.

Why did Arkema conversations about our action plan and strengthen commit to having Arkema’s CSR challenges. certain initiatives. CSR and its CSR and sustainability are a collective sustainability What did you learn undertaking and commitment; performance and from talking to the steering committee is issues assessed by stakeholders? working with the relevant its stakeholders? H. F. > The results were very departments to focus on equal H. F. > From the beginning positive. In form, the materiality opportunity and diversity, we’ve endeavored to assess assessment method used resource management, our performance using interviews (see following page) innovative solutions and indicators for each of the five that encouraged give and process safety. We want to focuses of our CSR and take with the individuals, showcase current initiatives sustainability policy: safety, organizations and partners that deserve more attention. environmental footprint, engaged with Arkema’s For instance, we compare innovation, employee growth. It’s a dialogue we want favorably with our peers on development and community to continue. In substance, diversity, but we really want to engagement. Our results in the results showed that the stand out. We’ve created a the last few years, especially 25 topics we concentrate on phased action plan to boost our progress in 2016 (see — personal safety, developing the proportion of women in pages 40 to 42), show that sustainable solutions, our top management from 18% our approach works. environmental footprint, etc. today to 23 to 25% in 2025. Corporate social responsibility (CSR) and sustainability are integral to our growth Yet we don’t set Arkema’s — match the expectations The added new dimension directions based solely of the internal and external involves our dialogue with strategy. Steadily improving safety and environmental indicators, product development on what we believe. stakeholders we surveyed. stakeholders. Through regular As a responsible company, The consensus ranking of topics materiality assessments, that always considers environmental impacts, new staff diversity targets and nearly connected to the world based on importance lets us stakeholder communications around us and attuned to our know we’re on the right track. will become a permanent 1,000 initiatives that reach out to our site communities — these actions make our times, we want to more fixture at Arkema and closely involve our internal How will you follow increase with time. This is CSR ambitions clear: engaging all employees to meet the sustainability and external stakeholders in up this first materiality a logical extension of the our CSR and sustainability assessment? sustained local discussions challenge and making Arkema a responsible, acknowledged leader in corporate process. That’s why we H. F. > We confirmed that our we’ve had for many years decided last year to initiate a approach is comprehensive through our community social responsibility. materiality assessment, a survey and aligns with expectations. outreach initiative, Common of stakeholders through Now we need to prioritize Ground®. —

36 37 “With this assessment, Arkema is “In Asia, especially China, Arkema’s showing it has a mature corporate social stakeholders have high CSR and responsibility process. The post-COP21 sustainability expectations. The people IN SUSTAINABLE signing of the Paris Agreement constituted and companies we deal with genuinely global recognition of the crucial challenge Sylvie Latieule, want and appreciate strong positions GROWTH of curbing greenhouse gas emissions, and Journalist and on the environment, health, safety, and has mobilized businesses. I urge Arkema Managing employee insurance and benefits, as well Didier Muller, to join the Science Based Targets initiative, Editor of the as openness to the wider world. Arkema’s Vice President, which offers companies a way to ensure French-language CSR and sustainability process also helps PMMA Product their targets are compatible with keeping publication suppliers, customers, partners and others Manufacturing, global warming within 2°C. The next big Info Chimie connected with our business make Materiality Assessment: Arkema challenge is managing water sustainably, Magazine lasting progress.” A CSR a ticking time bomb.” and Sustainability “Talking with local communities around “I see Arkema as a company striving to our plants about vital issues such as meet the major challenges of the future by Roadmap safety, the environment and jobs is now constantly innovating in high-performance part of our production sites’ culture. The materials. Its portfolio includes a number of Common Ground® community outreach Laurent Babikian, solutions for manufacturing lighter-weight Xavier External and internal stakeholders and communications initiative that began Director of Investor cars and planes, more robust and Durand-Delacre, share their perceptions of the almost 15 years ago is an integral part of Engagement at recyclable wind turbine blades, more Senior Arkema’s CSR and sustainability strategy rating agency CDP efficient batteries and solar panels and Vice President, materiality assessment and and has really improved our social more effective water filtration systems. It Asia-Pacific, standing. This latest aspect of stakeholder has also long been committed to Arkema Arkema’s CSR and sustainability dialogue implemented company-wide is developing bio-based materials, which another sign of our commitment to being help sustainably curtail carbon emissions.” strategy. a responsible chemical producer.”

here are two reasons to conduct a materiality assessment. First, to discover stakeholder expectations and second, to provide a tool for steering strategy by identifying CSR and sustainability priorities. The results are analyzed Tusing a grid that plots how important specific topics are “Arkema’s decision to seek stakeholder “As citizens, employees feel more affected to the company versus how important these topics are to input on its CSR and sustainability goals by environmental issues. Arkema is on stakeholders. Each intersection shows the mutual priority is in some ways an extension of the local PRIORITIES the right track, making safety, innovation, given to the issues. “The map shows us where to focus our dialogue pursued for many years through • Safety: Personal and process employee development and community efforts, while making sure that the overall policy is coherent,” its Common Ground® community outreach safety engagement the focus of our CSR, • Environmental footprint: says Sophie Huguier, Sustainable Development Manager and communications initiative. It’s also in Resource management alongside the environment. Internally, at Arkema. sync with the partnership project initiated • Innovation: Sustainable we also need to take steps to better explain Now common in CSR and sustainability, the concept of by Greater Lyon, called the Appel des 30!, solutions; product stewardship our targets and all the progress we’ve materiality was borrowed from financial auditing practices. which aims to attract new cleantech and responsibility made in these areas. All employees must The materiality threshold indicates whether or not an action Frédéric Laroche, chemical, energy and environmental • Employee development: keep CSR and sustainability in mind.” is significant. President, Mission businesses to production sites. Arkema, a Diversity and equal opportunity; The materiality assessment also showed that initiatives Vallée de la key player in France’s ‘Chemical Valley’, training and individual engaged with certain stakeholders over the years are Chimie project is a company open to the wider world, development (Greater Lyon, • Community engagement: on the right track. That’s true for purchasing in particular. helping to advance the business, social and Dialogue and listening “Our CSR process has gained new momentum, especially France) environmental interests of the site.” in our supplier relationships for example. Since joining Together for Sustainability (TfS), the ’s initiative to promote sustainable supply chains, we have performed hundreds of evaluations and dozens of field audits of our suppliers. We benefit from TfS’s scope,” explains Sophie Huguier. “In this way we help improve our “Involving CEFIC in this kind of initiative suppliers’ CSR performance, promoting lasting relationships is a first and demonstrates Arkema’s based on trust.” — commitment to CSR and sustainability, an FACTS & FIGURES extension of its engagement in Responsible ® Patrice Bréant, • 30 different types of Care . Enriched by this kind of open- stakeholders surveyed mindedness, the company is following in Arkema Director representing • 50% employees (site managers, the footsteps of the best in environmental reporting. Already deeply involved employee R&D, employee representatives, etc.) shareholders • 50% external stakeholders William Garcia, in reducing employee exposure (suppliers, customers, rating Executive Director, to chemicals, Arkema must continue agencies, journalists, etc.) HSSE, Energy its efforts to promote product stewardship, • 25 topics covered & Climate Action, which remains a critical topic The European in the years ahead.” • Repeated every 3 years Chemical Industry Council (CEFIC)

38 39 IN SUSTAINABLE CLIMATE GROWTH Halve greenhouse gas emissions

1

0.70 Target 0.62 0.60 Keep Getting Better, 0.50 RECOGNITION BY SPECIALIZED RATING AGENCIES Our CSR approach is regularly assessed by external stakeholders, with Indicators and Objectives especially customers and ESG 2012 2014 2015 2016 2025 (environmental, social and governance) rating agencies such as CDP, EcoVadis1, Vigeo2, SHRINK THE RobecoSAM, Oekom and ENVIRONMENTAL Sustainalytics. FOOTPRINT OF In addition, in 2015, reflecting our TO BACK US UP OUR ACTIVITIES strong performance, Arkema was included in the FTSE4Good Global AIR We focus on three things: curbing Index, which uses environmental, Arkema aims to rank with the best in the chemical industry in Reduce volatile organic compound social and governance criteria our emissions, reducing resource (VOC) emissions by 33% consumption and stepping up our to rank companies. CSR and sustainability. In 2012 we set five major commitments, use of renewable resources. We also make sure that our products do not 1 Target backed by a formal management process and indicators to track undermine either human health and 0.79 0.83 0.80 the results across all our activities. We have had well-established safety or the environment. 0.67 We have set four environmental safety and environmental objectives for several years. In 2016, targets that are measured by Environmental Footprint we set two new targets for employee development, designed Performance Indicators. EFPI are not impacted by changes in to increase diversity at the company. The date for meeting all scope, allowing us to better track 2012 2014 2015 2016 2025 targets is 2025. Arkema’s performance.

WATER FIVE STRONG COMMITMENTS cut chemical oxygen demand (COD) by 20%

1 1.03 Target RANK WITH THE BEST-IN-CLASS IN THE CHEMICAL INDUSTRY FOR SAFETY 0.93 0.78 0.80 Arkema’s industrial safety process is deployed globally Our three targets for 2025 reflect our commitment to and focuses on the three interrelated topics of technical, continuously improve our safety performance. organizational and human (Behavior Based Safety) factors. A shared safety culture across Arkema has sharply improved our safety performance in the last decade.

2012 2014 2015 2016 2025

WORKPLACE ACCIDENTS SITE AUDITS PEER OBSERVATION Reduce the total recordable injury rate Conduct an Arkema Integrated Management Implement the peer observation program (TRIR) per million hours worked to less System (AIMS) audit, an all-in-one audit to to spur risk awareness and reduce than 1.2 confirm progress on safety, the environment accident rates at all sites by 2025 Target ENERGY and quality, at all sites by 2025 Target 100% 1.9 Cut net energy purchases 100% 1. EcoVadis is a French agency that rates 78%* 77%* by 15% a year 1.5 1.5 Target corporations based on sustainable 1.2 61% 63% 57% 56% purchasing and environmental and social 0.92 performance. 1 0.99 Target 0.98 2. Vigeo is a European company that 0.85 assesses and rates the environmental, social and governance (ESG) practices and performance of corporations and organizations.

2014 2015 2016 2025 2014 2015 2016 2025 2014 2015 2016 2025

* 2015 figure includes Bostik. None of the data prior to 2015 include Bostik. 2012 2014 2015 2016 2025

40 41 MAKE SUSTAINABLE IN SUSTAINABLE DEVELOPMENT NUMBER A CENTERPIECE OF OF SUSTAINABILITY RELATED GROWTH OUR INNOVATION patents filed POLICY AND OUR 128 OPTIM’O PRODUCT LINES 121116 MANAGING WATER TO BOOST PRODUCTION PERFORMANCE Working with our customers, More Efficient Production, Introduced in 2016, the Optim’O we create solutions that help program aims to trim 15% off the costs meet the planet’s challenges, of water supply, purification and which include new energies, USING LESS WATER treatment. The program will also lower fighting climate change, access the chemical oxygen demand — COD, to clean drinking water, the use regulated by environmental standards

of bio-based feedstocks, and 2014 2015 2016 — of effluents by an average of 20%. home efficiency and insulation. Both by 2025. “Besides complying with regulations, we’re aiming to and Energy enhance production performance,” explains Jean-Yves Robin, Global Water Two programs — Arkenergy, introduced in 2014, Project Director. At the 30 Arkema plants with the highest water use or COD, and Optim’O, begun in 2016 — set us on a an initial baseline inventory was begun in 2016 to quantify all water flows by path toward excellence in energy use and water activity and usage. It identified a wide range of improvements, from locating management. and repairing leaks to closed-circuit FOSTERING cooling, and specified a timetable THE PERSONAL WOMEN AS A PERCENTAGE for implementing them. A similar AND COLLECTIVE of senior managers and executives ARKENERGY process will be conducted at 40 other DEVELOPMENT 2025 Target 18% plants in 2017. OF OUR PEOPLE 17% 17% Arkema has targeted a 15% REDUCTION IN NET ENERGY PURCHASES BETWEEN 2012 AND 2025 through the Arkenergy program. Since Everywhere in the world, Arkema’s employee the program’s launch in 2014, our energy bill has already decreased by 6% SPREADING THE WORD ABOUT ARKEMA’S BEST PRACTICES WILL BE relations policies revolve around two 2014 2015 2016 Between 23 and 25% without a corresponding drop in activity, in line with the roadmap. Independent concerns: the personal development of our audits regularly track progress. In 2012, spending on energy accounted for A MAJOR STRENGTH for the Optim’O employees and social development through NON-FRENCH NATIONALS around 8% of our variable costs. program. An example is our 17 coating improved collective working conditions. as a percentage of senior managers resin plants, which use large amounts In 2016, two new human resources and executives of pure water. “Paying attention to water indicators were introduced to track the 39% 2025 Target Arkema is targeting usage and quality is a core part of our number of women in senior management a 15% reduction culture,” explains Tim Gaughan, Global positions and the number of non-French in net energy purchases between Director, Health, Environment and Safety nationals in positions of responsibility. Between 42 and 45% 2016 2012 and 2025. at Arkema Coating Resins. “We monitor water flows in real time through a network of flow meters and track down even the smallest leak. 2012 2020 2025 Every plant has a water quality analysis 12% improvement 3% improvement 15% improvement laboratory and we have two state-of-the- in eight years + in five years = in 13 years art effluent treatment units.” —

ARKENERGY COMPRISES HUNDREDS OF INITIATIVES supported by KEEPING OPEN THE LINES a network of energy leaders. “We leave no stone unturned,” says Béatrice Maggiochi, Project Manager. “We fine-tune equipment configurations, OF COMMUNICATION NUMBER OF COMMON GROUND® adjust certain processes, install energy recovery and reuse systems and WITH ALL STAKEHOLDERS switch to more efficient technologies.” — initiatives carried out worldwide experience ® 1,044 Our Common Ground initiative 985 encourages dialogue with all our 900 stakeholders. This fosters close relationships with our plants’ neighbors, 183,083 34,271 CÉLINE DUCASSE, ENERGY LEADER, local schools and colleges, Europe Asia LACQ-MOURENX, FRANCE and our suppliers, to build balanced, “The distillation train of the methyl The energy saved mercaptan unit at Lacq requires a lot sustainable relationships based on trust. 92,373 over 13 years Americas is equal to the fuel of steam. We made it more efficient that would be used two years ago by tracking steam by more than use daily and adjusting equipment 310,000 cars. configurations based on operating 2014 2015 2016 conditions. Replacing the insulation in the reaction stage also cut back on energy use. Plus we’re working 481 on lowering our power usage through 128 Pacific a huge program to replace motors.” Africa

42 43 THE GOAL OF THE REVERPLAST INITIATIVE IS TO CREATE A IN SUSTAINABLE PMMA OR ACRYLIC GLASS RECYCLING PROCESS. GROWTH Spearheaded by Arkema in association with Paprec, a plastics recycling specialist, the Canoé R&D center in Bordeaux and INDRA, a leader in end-of-life (EOL) vehicle recycling, Reverplast was the result of an agreement signed April 27, 2016 with Ségolène Royal, French Minister of the Environment, Energy & Marine Affairs, and Emmanuel Macron, the then French Minister RECOVERING PMMA Circular of the Economy, Industry & Digital Affairs, as part of the An analysis conducted by Arkema and partner Paprec government’s pledge to promote green growth. of “reservoirs” of recyclable PMMA is expected to be completed in mid-2018. “The first focus is vehicle taillights,” explains Nicolas de Warren, Vice President, Corporate Relations at Arkema. “We’re studying how wrecking centers for end-of-life vehicles could organize ECONOMY OTHER CANDIDATES recovery economically.” Illuminated signs (service stations, FOR POLYMER RECYCLING urban signage, bus shelters) and interior decor items and Life Cycle Analysis “The development of recycling (retail furniture, trade shows and exhibitions) are also processes, much like our targets for the mass collection of end-of-life PMMA. development of bio-based Arkema is committed to managing the materials, is now an integral 1 part of our R&D strategy. company’s activities responsibly. Life In addition to the Reverplast initiative for PMMA, we’re mulling collection processes cycle analysis lets us assess the full for other products, such as the polyamides widely found environmental impact of our products in cars. Right now we’re analyzing volumes, because across the value chain, from raw materials the economic viability of recycling processes depends to end of life. Arkema is also involved on the potential for high-volume collection in organizing recycling processes for and cutting logistics costs.” Jean-Luc Dubois, Scientific Director flagship materials such as PMMA. at Arkema

THE INTEGRATED LIFE CYCLE facilitates the sharing of data,” ANALYSIS (LCA) method adopted says Hervé Thiébaud. The method by Arkema (ISO 14040-44 also creates very interesting R&D standards) aims to quantify a opportunities, enabling a product’s product’s environmental impacts environmental impact to be along the value chain, from raw factored in at an early stage. material extraction to end-of-life disposal. “We enumerate all the ARKEMA RELIES ON inputs and outputs involved in A NETWORK OF AROUND making a product and calculate 20 EXPERTS based at the its environmental footprint through Rhône-Alpes Research Center and indicators such as energy and correspondents in the business lines water usage, greenhouse gas to collect data and keep the DEFINITE COMMITMENTS emissions, and its impact on initiative going, notably through At a symposium on the biodiversity and the ozone layer,” our internal training courses. circular economy held 3 2 says Hervé Thiébaud, Head of We are also involved in industry February 1, 2017 the Environmental Assessment organizations to standardize at the French Ministry & Process Analysis Department and improve LCA methods, of the Environment, SECURING MARKETS DEVELOPING PROCESSES at Arkema. Energy & Marine Affairs Short term, the first applications for recycled PMMA will be Arkema and the Canoé R&D center are working on small-batch for example, to incorporate in mixtures with other polymers and recyclable thermoplastic testing and in-lab proof of concept for PMMA recycling and the benefits of product recycling and attended by 33 leading French companies, Arkema composite materials. We will work with customers and partners subsequent equipment specifications. The process will need ARKEMA NOW DOES THIS KIND into them. — in the plastics processing industry to more effectively organize to be economical enough to produce recycled PMMA that OF ANALYSIS FOR A NUMBER made three major the downstream end of the process. “For example, we’re planning is cheaper than a virgin equivalent. commitments: OF PRODUCT RANGES to formulate resins that will go into recyclable composite wind “We expect to have an initial technology up and running • To promote the recycling turbine blades,” says Nicolas de Warren. Applications are also by the end of 2018 with available volumes of several FREQUENTLY INTENDED FOR and recovery of waste possible in the automotive and boatbuilding markets. thousand tons,” says Nicolas de Warren. CONSUMER APPLICATIONS, and byproducts. including Rilsan® and Pebax® ® ® • To limit our resource use polyamides, Kynar PVDF, Forane and cut our greenhouse refrigerants, Altuglas® PMMA and gas emissions. Bostik’s adhesives. “LCAs are • To continue organizing ALTUGLAS® PMMA1 IS ONE OF THE EASIEST conducted in partnership with our a process to recycle PMMA. THERMOPLASTIC POLYMERS TO DEPOLYMERIZE AND customers, on a voluntary basis. RECYCLE AND AN IDEAL MATERIAL FOR THE CIRCULAR ECONOMY. Reclaimed PMMA can be mechanically Some customers are involved in ground into pellets that can be reused in molding and the process themselves, which extrusion processes. When heated under appropriate conditions, PMMA can also be split apart into its original monomer, methyl methacrylate (MMA). This depolymerization process is used industrially to recycle PMMA and to produce MMA that can be used again. 1. PMMA: polymethyl methacrylate 44 45 “Peer Observation WITH Discovers Details SAFETY We Missed”

Keeping Our

Simon Hou, HSE Engineer, Sartomer plant, Guangdong, China SMART COWORKERS SAFE “More than 60% of our people have IS ONE MORE WAY TO DRIVE been trained in peer observation, Through Peer Observations three years after it was introduced Operational Excellence at the plant. In 2016 alone, our 85 employee volunteers carried Ten years after peer safety observations were first out almost 1,900 observations, an average of over 20 each. This The SMART program encourages employees introduced, employees continue this constructive shows how invested our teams are in the method, which also benefits to share their experiences, problems and good practice because it works. members personally. Spotting an at-risk situation not only lets ideas with managers every day. The goal is to SAFETY REALLY IS ALWAYS IN MIND Leonard, Vice President, Health, Safety you correct a behavior — thereby AT ARKEMA. We’ve been encouraging and Environment at Arkema. “Safety isn’t improving safety — it also points engage frontline employees in making progress peer observation on the job for up a technical or organizational just for specialists.” problem that was missed. For 10 years. Nearly 60% of Arkema example, following observations and improving our operational excellence. sites now practice this method of THE PROCESS ENGAGES AWARENESS on several machines, we replaced collaborative, constructive critique. OF PERSONAL SAFETY and the safety tools that were found hard to use.” An interview with Jérôme Fady, Arkema’s of colleagues and has proved highly There are two ways a peer observer effective. “Peer observation has clearly Vice President, Operational Excellence, and might step in. Either a peer sets out to made our teams more vigilant,” says Paul Arnaud Oblinger, SMART Project Manager. watch a colleague performing a task or Leonard. For evidence you have only to a peer responds to a coworker’s request look at the sharp reduction in the total for an outside take. The purpose is the recordable injury rate, or TRIR, per million same: a safety debriefing based on hours worked, which has dropped by “Everyone Pays More interview the comments jotted down during the 50% in the last three years. — Attention to the Safety What are the basics How will the program observation. of the SMART program? be deployed? “The exercise encourages us to reach out of Others” J. F. > The SMART program facilitates J. F. > Our teams will be trained, to each other and talk about the safety communication by encouraging coached, and supported in applying “Everyone plays a part of a frontline situation,” explains Paul frontline employees to interact best practices by a network of SMART and talk about their successes and facilitators. Employees will select in site performance.” difficulties. The program’s key elements and track indicators, conduct daily JACQUELINE TRIFT-FERRADINI, are a daily performance review, meetings on the front line and more. GENERAL MANAGER OF BOSTIK’S housekeeping and problem-solving Resources will be provided to deploy PLANT IN RIBÉCOURT, FRANCE, WHERE reviews, and visual measurements, this collaborative approach, including THE PROGRAM WAS FIRST TESTED “The SMART program was launched that is, status dashboards that are seen information panels and methods in three production units and the by everyone and updated daily. for solving problems and organizing Mariusz Lewandowski, logistics team. A short meeting is This kind of feedback focuses attention work areas. held daily on the front line, with HSEQ Manager, CECA plant, on site performance and encourages team members taking turns Inowrocław, Poland everyone to get involved to achieve What benefits do you providing feedback on safety, “Peer observation starts specific goals. expect? quality, scheduling, production or conversations. Through constructive A. O. > The program is just getting other problems they may be having, double-checking, everyone pays How was SMART designed? started, but we already have their successes and their positive more attention to the safety of experiences. It’s a simple way to A. O. > We implemented a range of 17 sites that want to implement track the unit’s performance and others. Vigilance becomes a initiatives to get employees involved SMART’s principles. It is one more collective effort. Our adoption identify the practices to be improved of this method last year uncovered at specific sites. Working closely with driver of operational excellence. and solutions to be implemented. at-risk situations. Five percent of the corporate HR, we carefully picked best Making decisions on the front Because their opinions are taken 190 observations conducted in 2016 practices and put together a unique line empowers people, promotes into account, operators are willing led to corrective actions, such as program. The ultimate goal is to move responsiveness and efficiency, to speak out. They’re aware of cleaning filters to cut down on dust beyond local initiatives and share and is an effective way to solve how they contribute to the site’s and reminding people of the proper the principles across Arkema faster, problems. — performance. The result has been a body mechanics for moving heavy significant improvement in output of driving company-wide success that products that are ‘right the first time’ objects. Our observers — two-thirds benefits everyone. of our staff — are big supporters of — the RFT quality indicator — and in the practice, which helps us come delivery turnaround times.” up with simple, tangible solutions to problems identified on the front lines.”

46 47 employer brand that includes employer TO KEEP Bostik and asserts our common brand hiring position (see opposite). ENGAGEMENT? OUR TALENT Lastly, we introduced our new In 2016, Arkema Inc. surveyed its Arkema Leadership Academy, 2,500 employees in the United States, which is scheduled to begin Mexico, Brazil and Canada and at classes in 2017 (see opposite). Sartomer worldwide. It does this every two to three years to gauge employees’ Tell us more about level of personal investment in the what you call company’s performance and future and to give everyone a chance to share “expert tracks.” their views and expectations D. M. > Designated “expert of their managers and the company tracks” give us a framework as a whole. And overall the company to help develop, recognize achieved a total engagement and reward technical experts score of 78%, an 11-point in all areas of the company. improvement over 2013. This high The tracks provide avenues to level — above average for U.S. senior technical positions based companies — confirms Arkema’s on a stepwise approach to appeal in a competitive job market. Targeted action plans by both business expertise development in a variety unit and function are planned for 2017. of technologies, from research to manufacturing and managerial processes to project management.

Is talent management deployed everywhere? 88% D. M. > The answer today is of employees yes. In 2015, a talent manager was appointed in Asia, to fill participated in the a role similar to the ones in France, Europe and the United survey, which is a States. This now well-established tremendous rate position develops employee’s skills and potential in a region of response, and famous for its churning labor shows the level “Join Us and Make market. The result: in 2016, 6% a Difference!” OUR EMPLOYEES of our managers in Asia rotated of commitment into new assignments, up from Using a slogan employees Are Our Value Added 4% the year before. Business employees have created themselves and improvements like this show bright, attractive colors, to providing our new employer brand how our employees are at the conveys our identity and center of our growth strategy feedback on the shows what new We owe our company’s performance and and enhance our collective skills employees will find when 12 % and capabilities Arkema-wide. company’s continuous they join us. Arkema used growth to our employees. To develop them of Arkema’s managers Our employees are our value improvement process. Bostik’s integration as an added. — opportunity to assert a rotate or get promoted stronger hiring position. to their fullest potential, Arkema offers de- to new roles each year On our video-rich Careers website, employees from velopment training, rotational career assign- around the world talk 1,700 about their experiences, ments (mobility) and ongoing coaching and describe opportunities for new, full-time growth and advancement support. An interview with Dominique Mas- employees at Arkema, and encourage were hired in 2016 new talent to join us. You soni, Vice President, Human Resources & can’t miss our job offers on (480 in Europe, ARKEMA LEADERSHIP social media; we have an Internal Communication Development. 530 in North America, ACADEMY: TRAINING active presence on Twitter THE LEADERS and Facebook and a global 690 in Asia and Rest partnership with LinkedIn of the World) OF TOMORROW for campaigns featuring What were Arkema’s suited to newer hires, who We offer instruction, tools and resources specific professions. human resources often want to get international to help key managers in business and We attracted more than priorities in 2016? experience by working outside their 1,800 support function roles move up the 10,000 new followers D. M. > Both geographic and home countries for a few years. ladder. Specific courses to develop in just a few months on Projected hiring their leadership skills are organized in LinkedIn and prompted job mobility remain central to our partnership with prestigious management career support and planning (see What projects did you in 2017 a flood of applicants schools. After success in the United at job fairs. pages 52 and 53). We hope to introduce in 2016? States, it is Europe and Asia’s turn to accommodate each employee’s D. M. > As part of our diversity introduce the program. Developed with desire for advancement, without push, we now offer a mentoring the elite French business school HEC, set tracks but with regard for each program for women that an initial weeklong session is planned business’ specific requirements. encourages the development of for 30 people in the fall of 2017. Nearly Welcoming Bostik to the fold has their leadership skills. Twenty 200 Arkema managers are expected to enroll in the Arkema Leadership created new career opportunities. participants were enrolled in the Academy between now and 2020. And we hope that our newly 2016 program (see page 51). introduced Talent Program is We also developed a new 48 49 TO KEEP experience OUR TALENT “My mentee demonstrated her potential and built her network in just one year.” MENTORING, CHANTAL DEGRENDÈLE, ENVIRONMENT DIRECTOR, ERGONOMICS: DRIVING EQUAL OPPORTUNITY EUROPE “Sharing experiences is a very effective way to at Arkema proactively move women Leveraging Frontline up the corporate ladder. I tell my mentee about my successes as well as the Experience Last year, Arkema began a mentorship problems I have encountered. I’m fortunate to coach a effort in France. The initial focus has been talented young woman working in a field I’m not In keeping with a new agreement in France to prevent on women in helping to better prepare familiar with. But she has the same questions I had and the physical hardship on the job, we are improving working them for senior management positions. issues we share reassure her. I help her clarify her plans, conditions by making ergonomics a priority. articulate her expectations and show what she can do wenty-one women for growth at Arkema. The without fear of failure. And rkema educates the layout around several employees volunteered to relationship is fairly informal. I encourage her to broaden employees on the pieces of equipment based pair up with a program The mentor listens and offers her network. Example is a value of a safe, on comments operators made good way to motivate people practical and about the scale model,” opinion mentor — a male or experienced, incisive advice to and keep them from holding female Arkema executive mentees. Backed by the Diversity themselves back. It’s a comfortable work remembers Bertrand Merlet, Tvolunteer in the Colombes Steering Committee, the program constructive, supportive Aenvironment. In an Engineering Manager in the office — to regularly discuss will continue in 2017. — relationship and our meetings agreement signed with Engineering Department their careers and opportunities are useful breathers in French labor unions in at Pierre-Bénite in France. the calendar.” March 2016, ergonomics “An early warning became the centerpiece for THE INITIATIVES system.” workplace improvements. INTRODUCED THROUGH PHILIPPE FILIPIAK, “It’s all connected: by working THE 2016 AGREEMENT HSE MANAGER IN THE on ergonomics, we reduce WILL MAKE ERGONOMICS ENGINEERING DEPARTMENT what physical hardship and improve A DAILY FOCUS. IN PIERRE-BÉNITE, FRANCE experience experience mentees working conditions,” says Arkema has deployed a AND ERGONOMICS RESOURCE say PERSON Raphaële Grivel, Recruitment, network of “ergonomics “Input from plant operators is Diversity & Employee resource people” in France vital to designing workstations Development Manager. (see opposite) and created and drafting certain procedures. “What makes mentoring “Helping young “We established trust physical hardship prevention At meetings with the frontline immediately through THE AGREEMENT RENEWS and ergonomics groups at teams, the design group so interesting is women managers regular meetings, easy THE COMMITMENTS WE each site. For its part, the facilitated by an ergonomics discussions and very resource person tries to identify MADE IN JANUARY 2012, Purchasing Division will now motivating people advance gives Arkema the issues. Then the responsible strong support at critical such as adapting workstations use ergonomics as a criterion to go for it.” the benefit of their skills moments.” departments act on the and including ergonomics when choosing suppliers. — information the study group CHRISTIANE CHAPUIS, VICE PRESIDENT, and capabilities.” “The mentoring was in production design. In both forwards to them. Our role is FINANCE & CASH MANAGEMENT HENRI KOUACHE, the start of a very cases, frontline experience to be a sort of early warning “Too many women still voice VICE PRESIDENT, rewarding encounter is irreplaceable. The design system, providing information doubts about their ability GLOBAL MANUFACTURING that will last well of a new production line in and, most of all, facilitating to advance to positions of “Women bring a different approach beyond the program. improvements based on our and viewpoint, which is a real asset Honfleur last year provides responsibility. My role as a Our discussions always an example. “We modified training.” mentor is to build confidence for the company. I’ve seen it over deal with daily concerns. and motivate them to take the and over again throughout my There’s no need for leap and explore new avenues. career. Mentoring is a way for me formal preparations.” I check in with my mentee often, to share my experience, help new without any formal processes talent succeed, and support young “Having a supportive or reporting relationship and women so that they move to higher ear has helped me a in strict confidentiality. She’s management positions. I sit down lot, especially in an very open with me about her with my mentee for two hours every environment where That’s the number of aspirations and questions and, six weeks. The trust we’ve organizations and employees in the ergonomics on my side, I try to work out established lets us talk about how strategy are changing.” resource person network broader career opportunities Arkema works, career choices and in France. Trained for this with her. By drawing on my work-life balance. Over my career added role in 2016, they experience and knowledge of the I’ve been lucky enough to get some usually work in engineering company, I help her think about invaluable advice. It’s my turn to and design, human resources her future in the organization give back.” (HR) or health, safety and and envision paths she thought the environment (HSE). were out of reach and hadn’t 50 dared to talk about.” 20 51 “BEING PART OF MAJOR TRANSFORMATIVE WITH DEVELOPING PROJECTS FOR ARKEMA.” TALENT “EMBRACING ARKEMA’S VALUES OF PERFORMANCE AND SOLIDARITY.”

Fu Cai Mélanie Why Wang Jourdain WE ENJOY WORKING China France CONTRIBUTING TO ARKEMA’S PUTTING PEOPLE FIRST INTERNATIONAL SUCCESS at Arkema I started at Arkema in 2005, just before the spin-off. Arkema Over my 13 years at Atofina and then Arkema, I’ve had “had a lot to do to get off the ground, something I found Engaged, enthusiastic employees share their “a chance to work in production and business, in France, really motivating. I was quickly offered new challenges, such Finland, the United States and now China. I’ve been as managing a team to purchasing to strategic planning. thoughts about the company, the values, and Regional Group President, Fluorochemicals Asia-Pacific, I recently became Business Director, Fluorogases Europe. Every since 2015. I’ve participated in large-scale projects that assignment has been exciting, demanding and stimulating. the opportunities they found at Arkema. reflect Arkema’s strategy. Over my career I’ve both witnessed I’ve worked with highly motivated, supportive colleagues and and helped create Arkema’s success in Asia. And with my accessible management, and have never felt that being a technical background — I have a PhD in macromolecular woman has held me back. This people focus is vital for us to materials — I appreciate the fact that Arkema is consistently advance together and feel fulfilled in our work.” innovative.” SIMPLICITY OF PERFORMANCE Anthony O’Donovan After 18 years at two other chemical United “ REAL OPPORTUNITIES companies, I joined Arkema in 2013. FOR ADVANCEMENT States I was offered an intriguing mission: Len to oversee logistics and manage Mazzanti resources for the Fluorochemicals United You don’t get locked into a career track business line and to combine three States “at Arkema. I was hired in 2013 as regional departments into one. The Director, Logistics & Supply Chain for the collaborative work atmosphere and hydrogen peroxide business in North trust at the company allowed us to America. I then transitioned to Senior tackle complex problems together. Business Director for hydrogen peroxides Arkema’s values of solidarity and in North America. Since March 2016, simplicity resonate with me and I’ve been Regional Vice President of contrast with my past experiences at Purchasing for North America, focusing other organizations. Arkema is both on feedstock, energy and packaging. My detail-oriented and open to creativity.” career highlights the opportunities that exist for engaged, motivated employees who seize the chances that come up and are ready to rise to challenges.” “STAYING FOCUSED ON A COMMON G OA L .” “ BEING ABLE TO WORK THROUGH OPPORTUNITIES AND CHALLENGES TOGETHER HAS LED TO GREATER VALUE FOR THE COMPANY AND PROFESSIONAL GROWTH FOR ME.” 4052 5341 A LITTLE ENGLISH PRACTICE IN WITH EDUCATION HENGSHUI Liminlu Elementary AND YOUTH School is located in Hengshui, Hebei province, home to the Casda facility. A Common Ground® member since 2016, Reaching Out to the school has been getting a little foreign language learning support. Every two weeks Arkema employees teach classes on environmental protection and the Citizens sustainable development OF THE FUTURE in English. During 2016 we organized, led and funded almost 900 initiatives associated with Common Ground®, our local community outreach and communications program. Several of these initiatives focused on young people and education in China and France.

A Pair of Textbook Cases IN CHINA Fostering STEM Careers IN FRANCE CHEMISTRY THE ARKEMA CHEMART GREEN INNOVATION CONNECTS ART IN JUNE 2016, ARKEMA TEAMED UP WITH C.GÉNIAL CLASS IS AN EDUCATIONAL PROGRAM AND SPORTS IN [IT’S GREAT], A FOUNDATION THAT PROMOTES ZHANGJIAGANG LAUNCHED IN 2015. At two primary schools, STEM (SCIENCE, TECHNOLOGY, ENGINEERING AND Employees from sixty employee volunteers led fun chemistry MATHEMATICS) TRACKS TO MIDDLE AND HIGH activities, including the Noah’s Ark made of our Shanghai headquarters and SCHOOLERS IN FRANCE. PMMA and creative workshops, teaching the Changshu and The program has two parts. students about current and future environmental Zhangjiagang The first, called Professeurs en entreprise, takes teachers challenges. “The idea is to help foster civic production sites on tours of Arkema’s plants and R&D centers. Nine sites awareness while stimulating the students’ visited Lvfeng School — Mont, Pierre-Bénite, Feuchy, Serquigny, Lannemezan, creativity through play,” comments Daria Gong, in Zhangjiagang in La Chambre, Carling, Venette and Lacq — took part in External Communications Manager. Local plants Jiangsu province. They led several Professeurs en entreprise in November 2016, hosting also loaned their skills — in foreign languages several groups of teachers. The teachers went on guided and IT, for example — to the schools, which student workshops on environmental tours, chatted with employees and discussed potential were chosen for a specific reason. “Many protection, opportunities. “Teachers are involved in student guidance students have a parent employed at one of everyday safety and appreciate getting concrete information about career our plants. The children are proud to see their and creativity in the opportunities in the chemical industry,” commented Aline parents in the classroom,” says Daria Gong. arts. A donation Teyssier, in charge of Partnerships at Arkema. The program is being expanded to other was also made to Chinese schools in 2017. expand the library’s science collection The second, Ingénieurs et Techniciens dans les Classes, and IT hardware invites volunteer technicians and engineers to talk about experience WHAT IS COMMON GROUND®? was upgraded. what they do at schools located near our sites. ARKEMA At a separate CARRIED OUT TWO INITIATIVES UNDER THIS PART “Rekindle interest in our fields.” Common Ground® aims to build trust with our neighbors event in December, OF THE PROGRAM. At a Tarbes middle school, three through dialogue and openness. The program sponsors 100 students women employees talked to students about their careers education and awareness initiatives that focus on competed in a sports ALINE TEYSSIER, IN CHARGE OF DEPLOYING in science. At the Venette Research Center, we hosted the THE COMMON GROUND® PROGRAM understanding our neighbors’ expectations, creating field day organized young winners of the 2016 C.Génial contest, a fun science dialogue, and preventing risk. Started in 2002 in France, by Arkema. “By illustrating how chemicals improve everyday life and Common Ground® is now deployed in the 50 countries competition. It was a thumbs-up experience, according explaining to young people the industry’s growing place in the where Arkema operates. to Aline Teyssier: “Our employees love to share their future economy, we break through popular misconceptions and enthusiasm for their profession.” rekindle interest in our fields. We also show that our industry offers career opportunities equally to women and men.”

54 55 BOARD OF DIRECTORS

A SIXTH WOMAN ON THE BOARD OF DIRECTORS IN 2017 At its February 27, 2017 meeting, Arkema’s Board INDEPENDENT of Directors recommended that Yannick Assouad, Chief Oversight Executive Officer of Latécoère, be elected as an independent director. She will bring Arkema The Board of Directors sets Arkema’s strategy and ensures it is applied. both her experience as Chaired by Thierry Le Hénaff, the Board has 12 other members, a senior corporate executive and the production skills including nine independent directors, a director who permanently and expertise she acquired throughout her career in the represents shareholder Fonds Stratégique de Participations (FSP), a aerospace industry. If the Annual Shareholders’ director representing employee shareholders and, since July 2016, a Meeting approves her election director representing employees. In 2016, the Board of Directors met and that of Marie-José Donsion, there will be eight times, up from six times in 2015. The meetings had an attendance six women on the Board of Directors, bringing rate of 95%, versus 93% in 2015. the percentage to 45%, as required by French law. (Nathalie Muracciole, the director representing employees, is not counted in the gender equity calculation, in accordance with France’s AFEP-MEDEF Corporate Governance Code of Listed Companies.)

1 2 3 4 5 TWO PERMANENT SPECIALIZED COMMITTEES THE AUDIT & ACCOUNTS COMMITTEE The Committee is chaired by Philippe Vassor2 — who will be replaced after the 2017 Annual Shareholders’ Meeting by Marie-José Donsion1 — and is made up of two other 6 7 8 directors, Isabelle Boccon-Gibod and Hélène Moreau-Leroy. Thierry Lemonnier, Arkema’s 1 • THIERRY LE HÉNAFF, Chairman Chief Financial Officer, & Chief Executive Officer is its Secretary. The primary 2 • ISABELLE BOCCON-GIBOD, responsibilities of the Audit permanent representative of the French equity & Accounts Committee are Shareholders’ Notebook — A few pages to learn more about fund Fonds Stratégique de Participations (FSP) to ensure the quality of internal 3 • PATRICE BRÉANT, Director representing control procedures and the our governance bodies, understand our financial performance and track our share employee shareholders reliability of the information 4 • MARIE-JOSÉ DONSION, provided to shareholders. 1 price for the last 10 years. 9 10 11 Chief Financial Officer, Alstom THE NOMINATING, 5 • FRANÇOIS ENAUD, COMPENSATION & Chairman, FE Développement SAS CORPORATE GOVERNANCE COMMITTEE 6 • BERNARD KASRIEL, former 2 The Committee is chaired by Chief Executive Officer, Lafarge Thierry Morin3 and comprised 7 • VICTOIRE DE MARGERIE, of three other directors: Chief Executive Officer, Rondol Technology François Énaud, Bernard Kasriel2 8 • LAURENT MIGNON, and Victoire de Margerie. Chief Executive Officer, Natixis SA Michel Delaborde, Executive 9 • HÉLÈNE MOREAU-LEROY, Vice President, Human 12 13 Chief Executive Officer, Safran Transmission Systems Resources & Corporate Communication, is its Secretary. 10 • THIERRY MORIN, Chairman, Thierry Morin Consulting3 The Nominating, Compensation & Governance Committee 1 The Board of Directors’ decision, announced November 9, 2016, to appoint 11 • NATHALIE MURACCIOLE, makes recommendations and Marie-José Donsion as director to replace Claire Pedini, who resigned, is Director representing employees proposals concerning the Board subject to approval by shareholders at the May 23, 2017 Annual Meeting. 12 • MARC PANDRAUD, Vice Chairman 2 The terms of Bernard Kasriel and Philippe Vassor will expire at the Annual and its committees, Arkema’s of Investment Banking for Europe, the Middle East Shareholders’ Meeting on May 23, 2017. compensation policy, and and Africa, JP Morgan3 3 Renewal of the terms of Thierry Morin and Marc Pandraud is subject to a vote corporate governance principles of approval at the Annual Shareholders’ Meeting on May 23, 2017. 13 • PHILIPPE VASSOR, Chairman, Baignas SAS2 and best practices. 56 57 TWO NEW EXECUTIVE EXECUTIVE COMMITTEE MEMBERS IN 2016: VINCENT LEGROS COMMITTEE AND CHRISTOPHE ANDRÉ Christophe André joined the Executive Committee on September 1, 2016. FOUR EXECUTIVE VICE PRESIDENTS He oversees Technical Polymers & Performance Additives WITH FUNCTIONAL RESPONSIBILITIES (filtration, organic peroxides THE DECISION-MAKING and photocure resins) and leads Arkema’s digital transformation project. Mr. André, 45, graduated from France’s École Nationale Body Supérieure des Télécommunications engineering school. He also has a degree The Executive Committee is responsible for the day-to-day from the ESSEC business school and an MBA from INSEAD management of Arkema. Made up of eight members — Business School. After several positions in telecommunications, he joined including two people new to the team in 2016 — it is chaired the specialty chemicals manufacturer Rohm & Haas by Thierry Le Hénaff, Chairman & Chief Executive Officer. In in 2001, where he oversaw business development for the addition to the Executive Committee, in 2016 we created a Monomers Division before heading up the Adhesives Management Committee. BERNARD BOYER, MICHEL DELABORDE, & Packaging Division. In 2008 Executive Vice President, Strategy Executive Vice President, Human Resources he joined ArjoWiggins, the & Corporate Communications world’s leading manufacturer of technical and creative fine papers, as head of ArjoWiggins Graphic, one of the company’s five divisions. In 2012, he EXECUTIVE joined Arkema as head of the Thiochemicals business line.

COMMITTEE On September 1, 2016, The Executive Committee consists of Vincent Legros became Chairman & CEO Thierry Le Hénaff, Executive Vice President, Bostik three executive vice presidents and member of our Executive in charge of operations and Committee, succeeding four executive vice presidents with Bernard Pinatel. functional responsibilities. Mr. Legros, 43, is a graduate of the École Polytechnique and Ponts et Chaussées engineering schools in France and has a postgraduate degree in THIERRY LE HÉNAFF, production and business Chairman & CEO organization. He joined us from LUC BENOIT-CATTIN, THIERRY LEMONNIER, Saint-Gobain, where he had spent his entire career. Executive Vice President, Industry Chief Financial Officer THREE EXECUTIVE VICE PRESIDENTS IN CHARGE OF OPERATIONS He started there in 1998 as a production engineer at the Pont-à-Mousson plant, then served successively as manager of the Toul factory, assistant manager of the Pont-à-Mousson plant, head of the pipes, fittings and valves business and, in A NEW DECISION-MAKING BODY, 2006, head of operations for Saint-Gobain Pont-à-Mousson. From 2009 to 2013, he led THE MANAGEMENT Saint-Gobain PAM International in China. From 2013 on, COMMITTEE he served as Executive Vice President of Saint-Gobain PAM In addition to our Executive Committee, in 2016 we created a Management International and head of Committee chaired by Thierry Le Hénaff. Its members comprise the Executive the company’s pipe business. Committee plus a limited number of senior executives from the business lines, regions and support functions. It meets four times a year. A key task of the Management Committee is to conduct a quarterly review MARC SCHULLER, CHRISTOPHE ANDRÉ, VINCENT LEGROS, of our HSE, financial and operational performance. It also oversees major Executive Vice President, Coating Solutions Executive Vice President, Technical Executive Vice President, Bostik projects and priorities and discusses Arkema’s medium- and long-term strategic and Industrial Specialties Polymers & Performance Additives goals and directions.

58 59 FINANCE

PERFORMANCE BY BUSINESS SEGMENT EXCELLENT CASH COATING SOLUTIONS FINANCIAL PERFORMANCE GENERATION • Performed well and showed signs of an acrylic monomer In 2016, Arkema recovery at year-end Makes Gains reported a very solid free • Revenue: €1.8 billion, down 4.2% year-on-year cash flow1 of €426 • EBITDA: €208 million, up 9.5% million. This excellent • EBITDA margin: 11.7% Arkema turned in an excellent financial performance reflects our good management of performance in 2016, including its highest investments and working capital, despite higher 24% EBITDA since 2006. activity and less favorable feedstock prices at the end of the HIGH-PERFORMANCE MATERIALS year. The 36% free cash • Bostik’s targets achieved a year early flow-to-EBITDA ratio was and new materials innovation in line with our • Revenue: €3.4 billion, up 1.9% year-on-year medium-term target for 46% • EBITDA: €570 million, up 12.6% Arkema’s operating cash • EBITDA margin: 16.7% flow-to-EBITDA ratio. €7,535M 1. Cash flow from operating activities Revenue and investing activities excluding (€7,683M in 2015) impact of portfolio management. 30% Volumes were up 3.2%, in a global environment of moderate growth. INDUSTRIAL SPECIALTIES They increased in all three of our business segments, driven by • An excellent performance by each product line € innovation in technical polymers, adhesives’ expansion into new NET DEBT: • Revenue: 2.3 billion, down 5.5% year-on-year € regional markets, steadier demand for acrylic monomers and the €1,482M • EBITDA: 473 million, up 13.2% ramp-up of the thiochemicals plant in Malaysia. This solid performance At December 31, 2016, • EBITDA margin: 20.4% almost entirely offset a negative 3.7% price effect, reflecting the impact net debt was 1.2 times on selling prices of the drop in feedstock costs in the first nine months EBITDA and the net quarters of the year. The impact of the change in business scope was debt-to-equity ratio was close to zero. The currency effect was minus 1.3%. stable compared to the prior year at 35%, despite the acquisition in December 2016 of Den Braven for KEY INDICATORS an enterprise value of €485 million. INCOME STATEMENT (in millions of euros unless otherwise indicated) 2016 2015 % change Revenue 7,535 7,683 -1.9% EBITDA 1,189 1,057 +12.5% €1,189M EBITDA margin (%) 15.8% 13.8% - EBITDA up 12.5% Recurring operating income 734 604 +21.5% (€1,057M in 2015) Net income – Group share 427 285 +49.8% EBITDA was up sharply from the prior year, setting a record. Earnings per share (in euros) 5.68 3.87 +46.8% The increase was driven by Bostik’s successful integration and growth, Adjusted net income per share (in euros) 5.56 4.23 +31.4% significant innovations in technical polymers and downstream acrylics, Dividend per share (in euros) 2.05 1 1.90 +7.9% and the recovery in fluorogas earnings, in line with the announced BALANCE SHEET (in millions of euros unless otherwise indicated) plan. That means major internal projects accounted for roughly three-quarters of EBITDA growth for the year. Lower prices for certain Shareholders’ equity 4,249 3,949 feedstocks and measures to promote operational excellence also Net debt 1,482 1,379 made positive contributions. Net debt-to-equity (%) 35% 35% Capital employed 6,829 6,466 Working capital-to-revenue ratio2 (%) 14.5% 2 14.6% Net provisions3 863 907 CASH FLOW (in millions of euros unless otherwise indicated) Cash flow from operating activities 821 858 Free cash flow4 426 442 Capital expenditure5 423 431 15.8% €418M €427M Capital intensity (investments/revenue - %) 5.6% 5.6% EBITDA margin Adjusted net income Net income – 1. Dividend recommended to the May 23, 2017 Annual Shareholders’ Meeting. (13.8% in 2015) (up 34% from 2015) Group share 2. Working capital-to-revenue ratio, as defined in Section 4.1.9 of the 2016 Reference Document. 3. Provisions net of non-current assets, as defined in Section 4.1.9 of the 2016 Reference Document. (up 50% from 2015) 4. Cash flow from operating activities and investing activities excluding impact of portfolio management. 5. Capital expenditures, as defined in Section 4.1.7 of the 2016 Reference Document. 60 61 FINANCE DIVIDEND UP FOR THE SEVENTH YEAR IN A ROW DIVIDEND AND PAYOUT (IN € PER SHARE AND %) 2.051 1.85 1.85 1.90 A Remarkable 1.8 Dividend Up 8% in 2016 The Board of Directors reaffirmed dividends as a key component of shareholder return. The €2.05 dividend proposed for 2016 STOCK MARKET RIDE 1.3 is 8% higher than in 2015. It represents a payout of 37% of adjusted net income Arkema’s share price has significantly outperformed and is equal to 2.2% of the share’s value 1.0 on December 31, 2016. the CAC 40 index since we were publicly listed in The decision shows how confident 0.75 the Board of Directors is in our growth May 2006. Over 10 years, Arkema has gone from outlook and in the robustness of our cash 0.6 0.6 an unknown to a recognized chemical manufacturer. flow and balance sheet. 37% 24%

ARKEMA SHARE PRICE IN 2016 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(in €) 1. Dividend recommended to the May 23, 2017 Annual Shareholders’ Meeting 100.00 Arkema

95.00 +44% SHAREHOLDER BASE AT DECEMBER 31, 2016 90.00

85.00 BY TYPE OF SHAREHOLDER BY REGION 1 80.00 Peer average Individual investors Rest of the World 75.00 +13% Employees 6% 4% 70.00 5% France 65.00

60.00 North America 29% 55.00 CAC40 +4% 34% 50.00

45.00 Jan. 1 Feb. 1 March 1 April 1 May 1 June 1 July 1 Aug. 1 Sept. 1 Oct. 1 Nov. 1 Dec. 1 Dec. 31 19% 89% PERFORMANCE OVER 10 YEARS 14% Arkema: up 250% Average for peers1: up 68% CAC40: down 1% Institutional United Kingdom Rest of Europe investors 1 AkzoNobel, BASF, Clariant, DSM, Evonik, Lanxess, Solvay

CONTACTS CALENDAR ARKEMA SHARE PERFORMANCE IN 2016 UP 250% in 10 years Performance since January 1, 2016 (situation at December 31, 2016) +43.9% Individual Shareholders May 23, 2017 August 2, 2017 November 9, 2017 The Arkema share’s cumulative gain since Price at year-end (in euros) 92.94 [email protected] Annual Shareholders’ First-Half 2017 Third-Quarter 2017 Meeting Results Results we were publicly listed in May 2006. Over Average of 30 most recent closing prices (in euros) 91.75 Institutional Investors (Théâtre des Sablons, the same period, other CAC 40 companies saw High (in euros) 95.28 [email protected] Neuilly-sur-Seine) their share value decline by an average of 1%. Low (in euros) 48.17 +33 (0) 49 00 74 63

62 63 TACKLING DESIGNER TOMORROW’S OF MATERIALS AND INNOVATIVE SOLUTIONS CHALLENGES

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External Communications Division Arkema - a French société anonyme, registered in the Nanterre (France) Trade and Companies Register under the number 319 632 790 Headquarters 420 rue d’Estienne d’Orves 92700 Colombes, France Tel.: 33 (0)1 49 00 80 80 Fax: 33 (0)1 49 00 83 76 Dircom 4547E/05.2017/70

Pubished by Arkema’s External Communications Division. Consulting, design, editorial support & production: Editorial Services: Agence Arca Photo credits: Arkema, CAPA Pictures (M. Bender and C. Meireis), i-Stock, Vincent Olivaud, Bruno Mazodier, Getty Images. As part of Arkema’s sustainable development process, this report is printed on PEFC-certified paper sourced from pulp from responsibly managed forests. The printer is ISO 14001-certified and has been awarded the Imprim’vert® label for compliance with the French printing industry’s environmental standards.

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