<5th IT-2010 IR Seminar> Expansion Strategy of Water Treatment Business 19th December 2008 Toray Industries, Inc Executive Vice President and General Manager of Water Treatment & Environment Div. Akihiro Nikkaku General Manager of Water Treatment Div. Hideo Sato 1 Contents: １．Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business 2 Global Environmental Issues: Co2 and Water Water Issue (Water Shortage and Water CO2 Issue Pollution) Acid Rain Desertification Diminishing Global Warming Rain Forest Pollution Issues Ocean Pollution Destruction of Waste Problem Ozone Layer 3 Toray’s Approach toward Global Water Environment Issue Global Environmental Issue: Water became a focus at World Economic Forum 2007 （Commonly known as：Davos Conference） Jan 25,2007,Davos: Toray co-sponsored Special Japanese Sushi Reception 2007 , which was hosted by Japan Water Forum (JWF) The 1st Asia Pacific Water Summit (Beppu, Japan): Organizer: APWF(JWF) Dec.3-4, 2007, Beppu: Toray attended at CEO PANEL and made the presentation titled “Membrane Technologies meet to the Solution of the Subjects on the Global Water Environment “ Toray attended the Liberal Democratic Party research group on water security Mar.23, 2008, Toray made a report on “Approach to Rapidly Growing Global Water Business Market” as one of the major members of Council on Competitiveness- Nippon (COCN)’s “Technologies for Effective Utilization of Water Treatment and Water Resource Project” Toray participated in Singapore International Water Week June 23-27, 2008,Singapore:Toray gave a keynote speech at Japan Business Forum. Theme: “Global Market Trend on Advanced Water Treatment and Japanese Contribution by Technology” 4 Present Situation of Water Resource *World population is 6.5 billion 1.1 billion people cannot access to good drinking water (including water for daily life) 2.4 billion people do not have sanitary accommodations (wastewater and human waste treatment ) Present water situation in the world （Source：IWMI Report 2006） ★★GlobalGlobal ””WaterWater shortageshortage”” is is thethe keenestkeenest issue,issue, itit isis expectedexpected toto becomebecome eveneven moremore serious.serious. 5 Contents: 1. Global Water Environment and Toray’s Activity 2. Toray’s Water Treatment Business 3. Reverse Osmosis (RO) Membrane Business 4. Submerged Membrane Business for Membrane Bioreactor (MBR) 5. Hollow Fiber UF/MF Membrane Business 6. IMS (Integrated Membrane System) 7. Expansion Plan of Water Treatment Business 6 Position of Water Treatment Business in Toray <Core Technologies> <Advanced Materials> <Four Major Growing Business Fields> Eco-friendly Fibers Organic Synthetic Information / High-performance Films Telecommunication / Chemistry Electronics Nano-alloy Plastics Automobiles / Advanced Electronics Polymer Science Aircrafts Materials Carbon Fibers Life Sciences Biotechnology Composite Materials High-performance Environment / Membranes Water-related / Energy Nanotechnology Recycling Materials EnvironmentEnvironment related related BusinessesBusinesses Medical Products & WaterWater Treatment Treatment Business Business Pharmaceuticals NonNon petroleum-origin petroleum-origin materialsmaterials NewNew energy-related energy-related materialsmaterials DevelopDevelop WaterWater TreatmentTreatment BusinessBusiness asas aa “Strategically“Strategically DevelopingDeveloping Business”Business” toto aa corecore ofof EnvironmentEnvironment relatedrelated BusinessesBusinesses 7 8 8 Engineering Development Center Engineering Div. Water Treatment Water Treatment Labs. Research Technology Center Functional Materials and Products Development Center Technology Technology Center Technology CenterTechnology Global Environment Research Laboratories New Frontiers Research Laboratories Specialty Materials Toray Fibers & Textiles Research Laboratories (China) FibersToray Research & Textiles R&D Div. R&D Research Laboratories Mfg. Tech. Mfg. Mfg. Div.Mfg. Membrane TechnicalDept. Membrane Production Dept. Water Treatment & Environment Products Dept. Quality Assurance Water Treatment & Environment Business Planning & Administration Dept. Water Treatment Div. Water Treatment . Water Treatment Dept. System RO Membrane Products Dept. MF&UFMembrane Products Dept. Business Div. (TBMC, GToray 50.1%) (TMEu, 90%) Toray Toray Membrane USA, Inc. Membrane Toray USA, (TMUS, 100%) Toray BlueStar Membrane Co. Toray Ltd. Membrane Toray Europe AG Suido Kiko Kaisha, Ltd. Organization of Toray’s Water Treatment Business President Subsidiaries 2.World Water ProblemsIncrease and Water Related of WorldMarkets Population and Development of Water Treatment Technologies World population Energy consumption Population Comparison by Seawater (Billion) ⑤Membrane Desalination processes 3 C （kg/m ） 10.0 treatment a 15 r ④Thermal b o 8.0 n ～10 ③Rapid filtration e 10 m Abt. 80％ i 6.0 s reduction ②Treatment by s i o microorganism n 5 4.0 ①Slow filtration e q ～2 Natural purification u i v 2.0 a 0 l RO e Distillation n method t method 0 08019001700 20001800 2100 【Estimated by Toray】 Difficult to secure quantity and quality of water only by natural purification due to the rapid increase of population MembraneMembrane technology,technology, whichwhich enablesenables precise precise control control ofof waterwater qualityquality andand highhigh speedspeed treatment,treatment, isis essentialessential inin 2121stst centurycentury 9 History of Toray Membrane Technology & Water Treatment Business Period ～1960 ～1970 ～1980 ～1990 ～2000 2001～ 1968Started Research on RO Membrane 1953 USA launched RO concept. 1980Started marketing RO Membrane for ultra pure water plants 1960 RO/NF J.F. Kennedy made a speech 1996 Installed in a large brackish water desalination plant Membrane on a seawater desalination. 2001 *Next year, in 1961, he decided Installed in a large seawater desalination plant to approve a seawater desalination 2003 as a national undertaking as the Installed in the world’s largest President. wastewater reuse plant 1990 Started research on UF membrane Hollow Fiber 2000 Started research on MF membrane UF/MF 2002 Membrane Started trial marketing on MF membrane 2007 Installed in the largest membrane plant in Japan 1996 Started research on MBR Submerged 2003 Membrane for Started trial marketing MBR 2008 Installed in a large plant in Middle East 10 Types of Membranes and Toray’s Membrane Products Size 0.001 ㎛ 0.01 ㎛ 0.1 ㎛ 1 ㎛ 10 ㎛ S m Ion, Low molecule High molecular e p a weight organics weight polymer Colloid t a e r r a Trihalomethane Agricultural & Organic Material Clay i t a i l o s n Bacteria Coliform Cryptosporidium Monovalent Ions Multivalent Ions T y p Low Pressure e s RO (Reverse Osmosis） NF (Nanofiltration) UF (Ultrafiltration） MF (Microfiltration) T o Municipal Drinking Water, Reuse of r Ultrapure Water, Softening, Sewage Water Treatment a Wastewater, y Seawater Desalination, Removal of Toxic ’ Pretreatment for Seawater s Wastewater Reclamation substance Desalination m e m b r a n e p r o d u c t s RO NF UF MF ＭＢＲ Membrane Membrane Membrane Membrane 11 Membrane Manufacturers in the World 【Investigated by Toray】 RO NF UF MF MBR DOW (US) Filmtec◎ Filmtec◎ Omex○ Omex○ Koch (US) UOP○ △UOP Abcor ○Abcor ○ Puron○ General Electric (US) s Osmonics○ Osmonics ○ Zenon◎Zenon ◎ a e Siemens (Germany) Memcor◎ Memcor○ s r Norit (Netherlands) e X-Flow◎ ○ v Woongjin Chemical (Korea) ○ ○ O Saehan Saehan MOTIMO (China) ○ ○ ○ Vontron (China) ○ ○ Toray ◎ ○ ○ ○ ○ Nitto Denko (Hydranautics)◎(Hydranautics) ◎ (Hydranautics)○(Hydranautics) ○ Mitsubishi Rayon e ○ ○ s e Toyobo ○ ○ △ n a Daicel Chemical ○ ○ p a Asahi Chemical ○ ◎ ○ J Kubota ◎ ◎ :High share product ○:product in the market △:under development 12 Policy of Toray’s Water Treatment Business By utilizing superior membrane technologies and all variety of membrane products, - Expand and Strengthen global sales system - Strengthen profit structure by arrangement of production systems and increasing production capacity Become “Number One” of the Membrane Business by 2010. 13 Rapid Expansion of Global Water Issue and Water Treatment Market Drought Area & Water Treatment Market Source: IWMI Report 2006 China America North Africa Caribbean Sea Spain Middle India East Australia Solution of both water quantity and quality (Boron and Arsenics) is necessary for countermeasure of Global Toray’s Business Water Issue. Our targets are drought areas of the world. Expansion １．Middle East/North Africa region is the most expanding market. Toray has a good track record and continue to Strategy focus the market. ２．As for the USA, Toray has established local production facility already. Toray attacks this World’s 2nd largest market ３．Australian market has just taken off. Toray started strategic sales in this market. ４．China is the largest potential market in the world, and Toray will expand the business in the country by new business structure. For achievement of above, Toray strengthens Global Sales Team and production capacity. 14 Toray Water Treatment Global Sales Team TMEu TMUS (Europe, Middle East, Africa) (Americas) ＴＢＭＣ (China) TORAY (Japan,Asia,Australia) （）=Increased Number for Last 2Years Major Sales office (5→6) Sales office TAS (5→13) (Asia Pacific) Agency (11→13) Sales Staff : 60% up JapanJapan isis inin chargecharge ofof salessales forfor AsiaAsia andand OceaniaOceania