Albemarle Catalysts

John NicolsVice President, Catalysts

Albemarle Catalysts: Growth Vision & Strategies

Longbow ResearchAlbemarle Bayport Plant Visit September 11, 2007

Albemarle CatalystsAnalyst Road Show, September 2007

Financials

Strong Market FundamentalsGeneralHPCFCCAlternative FuelsPolyolefin Catalysts

Albemarle Strategies For Profitable Growth

Conclusions / Q&A

Acknowledgements

• UOP, LLC Norm Gilsdorf– Presentation at Albemarle SCOPE Symposium, June, 2007

• Hart Energy Consulting Kristine Klavers– Presentation at Albemarle SCOPE Symposium, June, 2007

• Exxon Mobil Ernie Lewis– Presentation at Albemarle SCOPE Symposium, June, 2007

• Borealis David Rolph– Presentation at Albemarle SCOPE Symposium, June, 2007

• Purvin & Gertz Bill Sanderson– Presentation at CMAI World Petrochemical Conf, March 2007


Financials



Conclusions / Q&A

Catalysts: ‘Company Changing’ Segment Step Out Growth

Net SalesDollars in millions

Segment Income (excluding special items)Dollars in millions

738

283

8392

443

839

'02 '03 '04 '05 '06 1H'07

92

35

1312

72

123

'02 '03 '04 '05 '06 1H'07

* Akzo Nobel Refinery Catalyst acquisition Aug. ’04

*

Focused & Driven For Catalysts• Great Acquisition For Albemarle• Great Acquisition For This Catalyst Business• Complementary Strengths Continue To Merge Together• One Company Culture Emerging Where Were Two

Akzo Nobel RefineryCatalyst

Rest of Akzo Nobel

Catalysts Are Core To Albemarle

Fine Chem = 26%

Polymer Add's = 39%

Catalysts = 35%

% of Albemarle’s 2006 SalesOf $2.4 Billion Globally


Financials



Conclusions / Q&A

Refining Polyolefin

2006 Catalyst Revenue Breakdown $839MM

86%

14%

Forecast Oil Consumption

Oil: Consumption 2020

0

20,000

40,000

60,000

80,000

100,000

120,000

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

Thou

sand

bar

rels

day

GLOBAL INSIGHT INC. INTERNATIONAL ENERGY AGENCYDEUTSCHE BANK ALEX.BROWNEXXON MOBIL

Petroleumrefining

Objective

Product slateAllows refiners to produce a desired product mix from crude oil

CleanRemove impurities from crude oil and other petroleum streams/products

HPC pretreatmentHPC post-treatment Resid hydrotreating

Fluidized cat cracking (FCC)HydrocrackingIsomerization

Examples of key processes

Two Basic Functions That Albemarle Catalysts Serve For Refineries

LPGCrude

oil CDU NHT Ref.

NHT Isom.

Alky.Poly.

DHT

TCU

VGO-HT

VDU

LPGGasoline

Fuel oil

Naphtha

Mid

dle

dist

illat

e

Atm

osph

eric

Res

idue

Vacuum Residue

VGO

VB, CokerRDS

FCCHC

RFCC

HPCFCCOtherNon-cat.

Isom.

DieselKero

Crude Oil Refining Crude Oil Refining


Financials



Conclusions / Q&A

Hydroprocessing Catalysts (HPC)Hydroprocessing Catalysts (HPC)

• Nickel-Molybdenum (NiMo) catalysts are preferred for hydrogenation and hydrodenitrogenation (HDN)

• Cobalt-Molybdenum (CoMo) catalysts are preferred for hydrodesulfurization (HDS)

• Tri-metallic (NiCoMo) catalysts are sometimes used to achieve a balance of HDS and HDN

NiMo

CoMo

Porous support + active phase

HPC Volume Fundamentals

0

50

100

150

200

250

300

350

1990 1995 2000 2005 2010 2015 2020 2025

MM

Bpd

/ KM

T/y

Albemarle’s Hydroprocessing Catalysts: Growth, Differentiation, Advantage

• We Offer:Leading Portfolio of grades for all major applications

Custom tailored “stacks”

Total Catalyst Management

Market growth (t/a)

0

50

100

150

200

250

1980 1990 2000 2010 2020 2030

actual

forecast

0

200

400

600

800

1000

1200

1400

1600

1950 1960 1970 1980 1990 2000 2010

ConventionalStarsNebula

Activity progression

feed

product

Stackedlayers ofcatalysts


Financials



Conclusions / Q&A

• Accessibility/strength• Active ingredients• Sinter resistance• Low cost/large scale• Endless Differentiations

65 µm

x10

x1,000FillerClay

ZeolitesY, ZSM-5

BinderSilica or Alumina

Pores

FunctionalComponentsCrystalline Silica/Alumina,………..

Fluid Cracking Catalysts (FCC)Fluid Cracking Catalysts (FCC)

Global FCC Supply & Demand (Excluding China)

450,000

500,000

550,000

600,000

650,000

700,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Met

ric T

ons

per Y

ear

planningEngineeringConstructionBase

Global Capacity = 536kt

Albemarle Estimates

Albemarle’s FCC CatalystsProfit Growth Outlook Bright

• Unique Value Through Differentiated Technology & Customer Servicing

• Improved Value Through Tightening Supply & Demand Fundamentals


Financials



Conclusions / Q&A

Albemarle Alternative Fuels TechnologyDevelopments Across CTL / GTL / Biomass Conversion

Steam Reforming

Coal Gasification

Biomass Gasification

(remote)GAS

COAL

BIO-MASS

FischerTropsch

Upgrading DIESEL

Vegetable Oil Crop

Veg. OilHydroconv. Upgrading

“BIO”DIESEL

Albemarle Catalyst Developments Across


Financials



Conclusions / Q&A

Polyolefins Global MarketGrowing Almost 2 x GDP

0 1 2 3 4 5 6 7 8 9

AAGR, % per year

North America

Latin America

West Europe

East Europe

Japan

China

Other Asia Pacific

Mideast/Africa

Projected PE growth rates by region(2004 to 2009)

CMT Asia Olefin Conference – June 07, 2006

World average = 5%

The Polyolefin Value Chain

Reactor Extruder Compounder Fabricator ConsumerEthylene

Propylene

Catalyst Additives

Single Site Catalysts

•Finished catalysts

• Activators

• MAO

• Organoborons

• Other proprietary systems

• Metallocene manufacture

ZieglerNatta

• Finished catalysts

• Organometallics

Additives

AOX

Flame retardants

Custom Blends containing:

• AOX

• Stearates

• Clarifiers

• Other proprietary ingredients

Albemarle’s offering Supports

PO Value Chain

Polyolefin Manufacturer

Refiner

Albemarle Catalysts Integral To Polyolefins

Metallocene/Single-site

• Unique Polymer Properties

Narrow MW distribution

Comonomer incorporation well controlled

New Stereo-specific polymers

• Higher Catalyst Cost

• Albemarle Offerings:

Leading MAO Producer

Custom Metallocenes

Silica / MAO / Metallocene

Ziegler-Natta

• Generic Polymer Properties

Broad MW distributions

Comonomer incorporation less consistent

Less stereo-specific

• Lower catalyst costs

• Albemarle Offerings:

Leading Organometallic Producer

Custom Finished Catalysts

MgCl2 / TiCl4 / donor ligand / RxAlCl3-x


Financials



Conclusions / Q&A

Albemarle CatalystsVISION: The World’s Leading Catalyst Solution Provider

Strategies To Accomplish:I. Invest To Serve Selected Customers & Segments Where Our

Service & Technology Are Valued

II. Build & Operate Globally Optimized, Low Cost, Environmentally Sound Manufacturing Technologies

III. Leverage External Partner Competences Into Our Global Business Systems

IV. Invest To Develop New, Sustainable Product Technologies And To Enter Attractive New, Sustainable Market Arenas

V. Position For Leadership In World’s Fastest Growing Regions

VI. Acquire For Consolidation & To Extend Catalyst Market Reach

Continue Step – Out GROWTH

External Execution Is Key

SALES & SERVICE

COMMERCIALTECHNOLOGY

BUSINESS MGMT

• Develop Segment & Pricing Strategies• Cross Functional Coordination / Planning• New Product Priorities To R&D • Capital & Resource Deployment

Share of Wallet

Overall Customer Satisfaction Tech Proposal Success Rate

Market Share

Profit & Loss

Rol

esM

etric

s

G r o w t h & Margins G r o w t h & MarginsG r o w t h & Margins

• Develop Account Strategies• Build Broad & Deep Relationships• Negotiate Optimum Value• Maintain Excellent Customer

Information Systems

• Application Technology Excellence • Develop & Maintain Key Technical

Relationships In Industry• Apply Newly Developed Technologies• Product Quality “Cops”• Maintain Excellent Technical

Information Systems


Strategies To Accomplish:I. Invest To Serve Selected Customers & Segments Where Our Service &

Technology Are Valued



IV. Invest To Develop New, Sustainable Product Technologies And To Enter Attractive New Market Arenas




Nebula:World’s Most Active Hydroprocessing Catalyst

Nebula 20: Industry Breakthrough Penetrating

Nebula 30: 50% More Active

More Tech Enhancements In Development

Number of units using Nebula

0

2

4

6

8

10

12

14

16

18

20

2001 2002 2003 2004 2005 2006

Other HC pretreatULSDKero/nafta

Amorphous

Zeolitic Cracking

Riser Cracking

Resid Cracking

Leading Industry To Increase Propylene YieldsLeading Industry To Increase Propylene Yields

1940 1950 1960 1970 1980 1990 2000 2010 2020

State of theArt ZSM-5Additives

Novel ZSM-5Additives

Maxpropylene catalysts

Max Propylene

• ZSM-5 Additives– K1000– K2000– ZOOM

• Novel Additives– Provantage– Provantage-R

• Max Propylene Catalysts– AFX

Amorphous

Zeolitic Cracking

Riser Cracking

Leading Industry For Heavy Crude ConversionLeading Industry For Heavy Crude Conversion

1940 1950 1960 1970 1980 1990 2000 2010 2020

Max Propylene

Resid Cracking

JadeTechnology

Platform

High SAR Zeolitesfor maximum stability

Ni & V TrapsTopaz Technology Platform for high AAI

• Topaz– Accessibility– New Upgrader

• Novel Additives– Resolve 950– Eliminox







V. Position For Leadership In World’s Fastest Growing RegionsVI. Acquire For Consolidation & To Extend Catalyst Market Reach


Position For Leadership In World’s Fastest Growing Regions

• New Dubai Office To Serve Middle East & India

• Continue Build Up Of Infrastructure In China– Sales Offices Today In Beijing, Shanghai & Guangzhou– New R&D Center In Nanjing– Nanjing Organometallic Repackaging

• Build Up To Serve Rest of Asia– ALB Korea in Seoul– Alb Asia Pacific in Singapore– Nippon Ketjen For HPC

Invest To Serve Developing World’s Customers & Needs

Consideration Of More Strategic Options That Make Economic Sense

Leverage External Partner Competences Into Our Global Business Systems

Business Process ALB Controlled Externally ControlledR&D Amsterdam, Houston, Baton Rouge NK, FCCSA, Other R&D Alliances

Sales Clear Lake, Amersfoort, Baton Rouge NK, FCCSA, NAA, UOP Alliance

Manufacturing Amsterdam, Houston, Baton Rouge NK, FCCSA, NAA

Total Catalyst Mgmt REACT Eurecat, NK

Hydrotreat Design UOP Alliance

• Setup To Extract Maximum Benefits:Capital SharingIdea / IP Generation & Global TranslationImproved Global Reach & Service CapabilitiesExpansion Of Albemarle’s Service Offerings

• Requires:Partners’ Continuous AlignmentComplex Coordination Systems

We Know How To Create & Sustain Long Term Partnership Value










$12 billion catalysts industry

3-5% growth annually

Chemical20%

Environmental27%

Other10%

Refinery21%

Polyolefin22%

ALB Share~ 5%

ALB Share~ 30%

~$500MM/yr

Acquire For Consolidation And To Extend Albemarle’s Catalyst Market Reach

SOURCE: SRI, 2004


Financials



Conclusions / Q&A

Albemarle’s Drive To Become The World’s Leading Catalyst Solution Provider

Lead PO ComponentsSupplier

Lead RefineryCatalyst SolutionProvider

Leading

Catalyst

Solution

ProviderLeverage To Become Broader Solution& Service Provider To Polymers

Alternative Fuels Catalyst Leader

Lead in Asia & Mid East

Synergistic Acquisitions

Best New Technologies

STEP – OUT G R O W T H

Questions?

Documents

Albemarle Catalysts