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Kemira Water Mats Jungar, President Capital Market Days Den
Kemira Water Mats Jungar, President Kemira Capital Markets Day Den Haag, September 11, 2007 Kemira Water Contents World Water Market Kemira Water Overview Key Figures Target Markets & Segments Strategic Position Key Actions Mats Jungar Kemira Water September 11, 2007 2 World Water Market Kemira Water Mats Jungar Kemira Water September 11, 2007 4 Mats Jungar Kemira Water September 11, 2007 5 World Water Market Municipalities 8% Water Resources ~ 70% of the surface is covered ~ 0.8% is fresh and accessible Since 1950’s World population has doubled Water use has tripled No technology innovation can replace water Industries 23% Agriculture 69% Mats Jungar Kemira Water September 11, 2007 6 World Water Market Total Market 300b€ - 4-6% growth Water treatment chemicals market 20 B€ - 5% growth Source: PIRA 2005 Mats Jungar Kemira Water September 11, 2007 7 World Water Market: Consumer and Taxpayer Spending on Drinking Water Western Europe 26 B€ North America 28 B€ East Europe & Central Asia 14 B€ Middle East & North Africa 24 B€ East & South Asia 42 B€ Latin America 16 B€ Southern Africa 6 B€ Total Market 160B€ Mats Jungar Kemira Water September 11, 2007 8 World Water Market: Consumer and Taxpayer Spending on Waste Water North America 27 B€ Western Europe 22 B€ East Europe & Central Asia 5 B€ Middle East & North Africa 1.5 B€ Total Market East & South Asia 11 B€ 70B€ Latin America 3 B€ Southern Africa 1 B€ Waste water treatment in emerging markets is undeveloped Mats Jungar Kemira Water September 11, 2007 9 World Water Market: Water Treatment Chemicals by Region Total market 20 B€, Annual Growth 5 % Source: PIRA 2005, estimate for 2006 Mats Jungar Kemira Water September 11, 2007 10 World Water Market : Water Treatment Chemicals by Application Total market 20 B€, Annual Growth 5 % Source: PIRA 2005, estimate for 2006 Mats Jungar Kemira Water September 11, 2007 11 World Water Market: Water Treatment Chemicals by Product Total market 20 B€, Annual Growth 5 % Source: PIRA 2005, estimate for 2006 Mats Jungar Kemira Water September 11, 2007 12 Inorganic Coagulants: Global Market and Competitive Situation Company Market share Products KW Market size market shares (M€) EMEA Feralco 10% Kronos Giulini Sachtleben Akzo Huntsmann 10% 8% 5% 5% 5% North America Al/Iron salts Iron salts Al salts Al salts Al/Iron salts Iron salts General Chemicals 20% Al/Iron salts GEO 8% Al salts PVS 6% Iron salts Asia Pacific (local market shares) Taichang Hunan Shandong <1% Al salts/Flocculants <1% Al salts <1% Al salts Latin America (local market shares) Nheel Quimica, Br Cataguases, Br 24% 16% Al/Iron salts Al/Iron salts Guacu, Br Sidesa (PQ corp), Mx 14% 50% Al/Iron salts Al salts Cinetica Mx 15% Al salts Mats Jungar Kemira Water September 11, 2007 Europe North America Asia Pacific Latin America 37% 23% 2% 10% 500 500 400 300 Market growth Western Europe 2% Eastern Europe 5% North America 4% Latin America 7% Asia Pacific 6% Total market 1.7 B€ (Iron & Aluminium salts) Market growth ~5% AAGR (2007-2010) Source: Management estimates 13 Flocculants: Global Market and Competitive Situation Market Shares in % Kemira Water SNF CIBA Market Size Nalco Ashland /STK Others MEUR Growth % Europe 11% 25% 24% 8% 20% 12% 870 GDP North America 12% 56% 11% 15% 5% 1% 670 GDP Latin America 11% 30% 18% 18% 10% 14% 150 GDP 3% 25% 23% 12% 5% 32% 470 GDP 2160 4% Asia Pacific TOTAL Total market ~ 2.2 B€ Growth forecast ~4% per year Market Includes Poly Acrylamides and Organic Coagulants (Polyamines, Polydadmacs) but excludes Antiscalants and Monomers Source: Management estimates Mats Jungar Kemira Water September 11, 2007 14 Kemira Water – Overview Kemira Water Brief History of Kemira Water From a strong position in the Nordic region – the pioneering countries in water treatment Now a leading water treatment business Strong positions in coagulants in Europe and North America Entering the Flocculants business by the acquisition of Cytec Water Treatment Several smaller acquisitions followed by investments in capacity to attain leadership Arkema water treatment chemicals, FR 2007 Chongquing Lanjie Tap Water Materials, CN 2007 Cytec water treatment chemicals, US 2006 Dalquim, BR 2007 Parcon, DK 2006 Kemiron, US (40%) 2005 Galvatek, FI 2006 Eaglebrook, US 2004 Zlotniki , PL 2004 Belinka, SI 2004 Kemira Water Mats Jungar Kemira Water September 11, 2007 16 Kemira Water Today EMEA Employees: 1136 Factories: Coagulants: 29 Flocculants: 2 NORTH AMERICA Employees: 586 Factories: Coagulants: 11 Flocculants: 3 LATIN AMERICA Employees: 159 Factories: Coagulants: 6 Flocculants: 0 Kemira Water Production Plant Coagulants Flocculants Research Centers Minority J/V’s Sales Office Mats Jungar ASIA-PACIFIC Employees: 327 Factories: Coagulants: 2 Flocculants: 1 Kemira Water September 11, 2007 54 48 6 2 2 10 Employees total: 2239 17 Kemira Water Key Figures M€ 2004 2005 2006 H107 285 353 468 356 32 24 32 84 4 4 11 4 Operating profit 25 30 36 25 Operating profit, % 8.8 8.4 7.7 7.1 ROCE, % 15.0 13.8 13.3 12.1 Personnel 1461 1570 1846 2239 Revenue Sales Growth % Organic Growth %* * In local currencies Mats Jungar Kemira Water September 11, 2007 18 Kemira Water Revenue by Region and Segment Revenue H1 2007: 356 M€ Revenue 2006, pro forma ~ 675 M€ (incl. Cytec Water Treatment for the whole year): Pro forma Mats Jungar Kemira Water September 11, 2007 19 Water Treatment Fundamentals Value Waste • Oil • Minerals • Metals • Paper fibers • Organic matter • Nutrients (P / N) • Salts Clean water Mats Jungar Kemira Water September 11, 2007 20 Market Trends and Business Opportunities Increasing need for water Increasing sludge disposal costs Increasing environmental demands Increasing oil prices Increasing mineral prices Kemira Water’s chemical water separation technologies Waste water Mats Jungar Drinking water Sludge dewatering Kemira Water Industrial water treatment September 11, 2007 Process water re-use Minerals extraction 21 Oil extraction Kemira Water Vision Our vision is to be the best solution provider for water treatment and selected industrial processes on a global basis. Mats Jungar Kemira Water September 11, 2007 22 Strategic Objectives Financial Targets Organic growth > 5 % ROCE > 20% Strategic Business Objectives Emerging Markets > 25% of Net Sales (currently 20%) Solution Sales > 7% of Net Sales (currently <1%) Mats Jungar Kemira Water September 11, 2007 23 Kemira Water Organisation President Kemira Water Mats Jungar Sales Area Europe, Africa, M-E Sales Area North America Sales Area Latin America Sales Area Asia Pacific Flocculants Coagulants Solutions Equipment Services Mats Jungar Kemira Water September 11, 2007 24 Target Markets & Segments: Municipalities Water mains… … and sewers Drinking water treatment Mats Jungar Kemira Water Wastewater treatment September 11, 2007 25 Target Markets & Segments: Municipalities Typical applications Organic matter removal Particle removal Phosphorus removal Sludge dewatering Colour control pH-control Odour control Sewer corrosion control Mats Jungar Kemira Water September 11, 2007 26 Target Markets & Segments: Municipalities Benefits – Clean water and sanitation for the society Mats Jungar Kemira Water Drinking Water Treatment Efficient precipitation of organic matter Disinfection Reduced cost of operations Waste Water Treatment Less nutrients to effluent Minimized sludge volumes Reduced odor from sewers Prevention of sewer system corrosion Reduced cost of operations September 11, 2007 27 Target Markets & Segments: Industries Raw water In-process water Wastewater treatment Mats Jungar Kemira Water September 11, 2007 28 Target Markets & Segments: Industries Mats Jungar Kemira Water September 11, 2007 Industries use water as carrier for… Oil Minerals Fibres Sugar Heat Waste water treatment to meet legal requirements before discharge 29 Target Markets & Segments: Industries Typical industries Chemical Metals & Mining Oil Food & Beverage Construction Mats Jungar Kemira Water September 11, 2007 30 Target Markets & Segments: Industries Typical applications in-process Raw water treatment Solid-liquid separation Retention aids Friction reduction Viscosity control Clarification Scale control Sizing Typical applications in waste water treatment Sludge dewatering Colour control Organic matter removal Particle removal Mats Jungar Kemira Water September 11, 2007 31 Target Markets & Segments: Industries Benefits Improved efficiency in operations, reduced cost Increased quality of customers products More efficient use of chemicals Minimized waste Allows customers to focus on their core business Mats Jungar Kemira Water September 11, 2007 32 Product Offering Coagulants #1 in the world Iron- and aluminium salts for drinking and wastewater Customized for maximum efficiency Flocculants # 3 in the world Increase performance in waste water treatment and for process water Increase sludge dewatering performance Customized for maximum efficiency Mats Jungar Kemira Water September 11, 2007 33 Strategic Position Marketing & Sales The only player with full range of coagulants and flocculants for water treatment Strong presence in all major markets with a sales & service organization World leader in coagulants Sourcing World leading in handling waste streams as raw material for coagulants Kemira’s purchasing power Mats Jungar Kemira Water September 11, 2007 34 Profitable Growth – Key Strategic Actions Operational improvements Continue to build the global sourcing capabilities Develop superior manufacturing processes Implement process for New Products Developments (NPD) to boost new products sales from 5% Æ15% before 2010 Brand & Culture Strengthen brand – further increasing customer loyalty Build a culture focused on efficient launches of new products, applications and solutions Use strengths from our different cultures to transform us into a truly global water solution company Mats Jungar Kemira Water September 11, 2007 35 Profitable Growth – Key Strategic Actions Growth through acquisitions Strengthen our market presence in coagulants with main focus on emerging markets Strengthen our global footprint in flocculants Organic growth Strong organic growth in flocculants in selected segments Strengthen our presence in emerging markets Broaden our product offering by new customer focused solutions Customer driven development through our NPD-process Complete marketing support for applications and solutions Packages of chemicals, technology design, supply, operations, maintenance and training Mats Jungar Kemira Water September 11, 2007 36 Kemira Water: Solutions and the bigger picture “Innovative technologies, including the improvement of indigenous technologies, are needed to fully utilize limited water resources and to safeguard against pollution” UN Division for Sustainable Development, Agenda 21: Chapter 18 Mats Jungar Kemira Water September 11, 2007 37 Kemira Water Our vision is to be the best solution provider for water treatment and selected industrial processes on a global basis. Mats Jungar Kemira Water September 11, 2007 38 Thank You Kemira Water
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