Muntajat

Muntajat

Qatar Chemical and Petrochemical Marketing and

Distribution Company (Muntajat) Q.J.S.C.

www.muntajat.qa

Economics and Optimization of

Downstream

Marketing and Distribution:

Qatars Model from the GCC to Asia

9 - 11 September 2015 / Singapore

CONFIDENTIAL September 2015

Natural Gas

Supply

Largest non-associated gas field in the

world

Export

Portfolio

Over 10 million tons per annum

Infrastructure World-class loading and unloading

facilities

Location Situated between East and West of Suez

Markets

Stability Visionary leadership and stable political

and commercial environment

Qatars Petrochemical Hub

02


1969 1974

QAPCO was established as a joint

multinational venture, currently

owned by Industries Qatar and

TOTAL Petrochemicals

1991

QAFCO founded as a joint venture

between the Government of Qatar

and a number of foreign

shareholders, currently owned by

Industries Qatar and Yara

Netherlands.

QAFAC was established in 1991,

as a joint venture, currently owned

by Industries Qatar, OPIC Middle

East Corporation, International

Octane LLC and LCY Middle East

Corp.,

Timeline and capacities by downstream product

Ammonia 3,600 KT

Melamine 60 KT

Urea 5,600 KT

Urea Formaldehyde (UFC) 58 KT

Low Density Polyethylene (LDPE) 710 KT

Methyl Tertiary Butyl Ether (MTBE) 610 KT

Methanol 982 KT

* Quantities are current and per annum03


1997 1998 2002

Timeline and capacities by product (contd)

Q-Chem founded as a joint

venture between QP and Chevron

Phillips Chemical International

Qatar Holdings LLC (CPCIQ)

QVC established in Mesaieed

Industrial City as a joint venture

between QP, QAPCO, and Arkema

Q-ChemII founded as a joint

venture between QP and CPCIQ

Hydrochloric Acid 16 KT

Ethylene Dichloride (EDC) 200 KT

Caustic Soda (CSS) 730 KT

Vinyl Chloride Monomer (VCM) 330 KT

High Density Polyethylene (HDPE) 453 KT

1-Hexene 47KT

High Density Polyethylene (HDPE) 350KT

Normal Alpha Olefins (NAO) 350KT

* Quantities are current and per annum04


2004 2005

Qatofin founded as a joint venture

between QAPCO, TOTAL & QP

RLOC established as a joint venture

of Ethane cracker project

SEEF incorporated in Qatar, as

a joint venture between QP

and local company UDC

Linear Alkyl Benzene (LAB) 100 KT

Heavy Alkyl Benzene (HAB) 3.5 KT

Linear Low Density Polyethylene

(LLDPE)530 KT

2006

QMC is a joint venture company

between Qatar Intermediate

Industries Co., Ltd (Alwaseeta), and

Qatar Fertilizer Company (QAFCO).

The plant is the largest Melamine

Plant in the Middle East. QMC is

located in Mesaieed Industrial City.

Melamine 60 KT

* Quantities are current and per annum


05


2012

Muntajat was established by the Government

of the State of Qatar

2009

PYGAS 46KT

Ras Laffan Olefins Company Ltd (RLOC) is

a Qatari company, 53.31 percent-owned by

Q-Chem II and 45.69 percent-owned by

Qatofin Company Limited (Q.S.C.) (Qatofin)

* Quantities are current and per annum


06


2013 2014 2020

Dec, 2014 & Jan 2015 Muntajat completes transition of QChem,

QChem II and RLOC products

100% of Qatars export portfolio of chemicals and petrochemicals is

handled by Muntajat

February - Muntajat completes

transition of QAFAC products and

takes first order

March - Muntajat completes

transition of QAFCO products

April Muntajat completes transition of SEEF Ltd and QVC

products

July Muntajat completes transition of QAPCO and Qatofin products

Qatars annual production of chemicals and petrochemicals is

expected to multiply


07


Established in 2012 to market, distribute and sell Qatars regulated chemical and petrochemical products

LDPE

LLDPE

LAB

HAB

CSS + HCL

VCM

EDC

Methanol

MTBE

55% QP, 32% QAPCO, 13% Arkema

80% QP, 20% UDP

50% IQ, 20% OPIC ME Corp., 15%

Int. Octane, 15% LCY

Ammonia +

Aq. AmmoniaUrea (Granular

+ Prilled)

75% IQ, 25% Yara Netherland

QMC (60% QAFCO, 40% Alwaseeta)

GFC (70% QAFCO, 15% QIMC, 10% UDC, 5% Amwal)

80% IQ, 20% TOTAL

63% QAPCO, 36% TOTAL, 1% QP

HDPE

Hexene-1

NAO

51% QP, 49% Chevron Phillips

(Q-Chem and Q-Chem II)

Melamine

Qatar Regulated Products and PEs

Muntajat Mandate

Exclusive rights to

purchase, market,

distribute and sell Qatar's

production of chemical and

petrochemical regulated

products to the global

market

End CustomersMuntajat

Polymers Chemicals Fertilizers

Pygas 53% Q-Chem II, 46% Qatofin

UFC

08


Muntajat Accomplishment

Muntajat managed to achieve an impressive

array of accomplishments in short time

09

In less than one year, Muntajat successfully stood up one of the worlds largest chemical and petrochemical marketing, sales, and distribution

companies

Muntajat incorporated10 producing entities business into its new and existing ecosystems in record time

Muntajat accomplished the complex transition without any disruptions to customer delivery

In total, Muntajat will conduct the sales, marketing, and distribution for over $8B of annual product delivery

The model is scalable and repeatable in different regions.


Successfully marketed over 9 MMT of products through a variety of channels, logistics and contractual models

2014

9.4

2013

7.6

VCM

EDC

HCL

LAB / HAB

LDPE

LLDPE

HDPE

Urea

Amm / UFC

Melamine

Methanol

MTBE

CSS

2013 2014

9.4

7.6

3rd Party Volumes

QAFAC

QAFCO

QVC

QAPCO

SEEF

QATOFIN

QCHEM

Key Highlights

These products are sold through a multitude of

Sales Channels, e.g., Agent, Trader, Distributor,

End Customer

Incoterms (FOB, EXW, CIF, CFR, etc.), and

Contract arrangements(spot, term)

Manage to transition the Marketing, sales and distribution activities of all these products without any customer or sales disruptions

Volumes Marketed by PEs and Product

In MMT (2013 & 2014)

10


Third party distribution market will continue to

grow specialty distribution will grow faster

6.5%

11.0%

2.2%

3.9%

9.4%

10.2%

11.1%

2013

188

2012

185

2011

166

2010

146

2009

113

2008

132

Third party distribution market1)

USD Bn

5.9%

5.8%

5.1%

4.9%

3.1%

7.2%

47

2008

53

7.0

12.7%

2.8%

3.1%

13.1%

12.0%

13.1%

2013

80

2012

78

2011

68

2010

60

2009

Specialty Third party distribution marketUSD Bn

5.9%

6.0%

5.4%

5.2%

3.5%

8.0%

1) Market size is the gross revenues of third-party distributors; 2) All growth rates are in real terms

CAGR2

08 - 13CAGR2

13 - 18CAGR2

08 - 13CAGR2

13 - 18

Global

6.2%

Global

5.6%

11

38 3748 56

63 64

3427

33

38 3728

20

26

30

32 34

13

12

16

18

20 21

10

9

12

14

17 16

9

8

11

13

15 15

36

0

20

40

60

80

100

120

140

160

180

200

220

16 1621 23

29 28

13 10

1314

15 1511

8

10

12

12 13

4

5

6

7

7 8

3

3

5

6

66

4

5

6

7

9 8

0

10

20

30

40

50

60

70

80

90


On the supply side, the market is highlyfragmented and M&A has been a key growthlever in recent years

Global Market Share of Top Players, 2012, %

84.9%

Top 5 players hold less than 15% market share Market leaders dominating individual regions

Nexeo Solutions

5.9%

UnivarBrenntag

-0.5%

7.1%

Growth Rates for top 3 Companies, 2008-12, %

13

4

11

Nexeo Solutions

1 1

Univar

2

Brenntag

Acquisitions by region, 2008-13

Developed

Emerging

Naxeo 1.9%

ICC 1.1%

Others 84.9%

Sinochem 1.3%

Univar 4.9%

Brenntag 5.9%

North

America

Europe

Asia-Pacific

Regional Market Share Leaders

(Full-liner, in alphabetical order)Region

At gross revenues of USD

8 Bn, Muntajat is already a

significant player

Hydrite Chemical Univar Nexeo Solutions

Brenntag

Brenntag Omya Univar

Biesterfeld

ChemStation Brenntag Pure Chemicals

Behn Meyer

12


Muntajat model creates net value of up to ~USD 2 Bn over next 5 years through different optimization initiatives

13

Net value creation to producing companies due to:-

Reduction in agency costs .

Optimizing sales performance.

Optimizing freight, logistics and insurance.

Trading and swap activities.

Increasing distribution margins through value addition activities.


Asian Markets (ISC, NEA, and SEA) combined make the

largest market for Muntajat across different product

groups where more than 50% Muntajat volumes is sold

ISC

North America

South America Africa

Europe

Oceania

Middle East

North-

East

Asia

South-

East

Asia

14%

2014

15%

2013

2014

13%

10%

2013

2014

3%

2013

2%

2014

10%

2013

9%

2014

20%

2013

20%

2014

9%

2013

13%

Volumes Marketed by Muntajat by Region

(2013 & 2014)

2014

6%

2013

8%

2014

12%

2013

12%

2014

11%

2013

12%

14


Going forward, global petrochemicals industry operating rates are expected to improve but overcapacity will remain

77%

79%

81%

83%

85%

87%

89%

0

100

200

300

400

500

600

700

800

900

1000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Ca

pa

cit

y U

tili

za

tio

n

MM

T

Capacity Demand Capacity Utilization

World Petrochemical Industry Outlook: 2010-2020

Product Specific Insights

Ethylene demand to grow at 1x GDP, but will be oversupplied owing to multiple sources

Methanol, MTBE demand to grow driven by China and Asia but increase in operating rates in China may result in oversupply

China also adding new capacity in Fertilizers - may result in downward price pressure

Regional Insights:

Asia to drive growth through key end markets (automotive, construction, electronics) capacity additions to primarily come from Asia and ME

North America to remain net exporter based on feedstock advantage (shale gas)

European petrochemicals industry will suffer on both demand and supply side

15


Highlight on Asian petrochemical markets:

growth in SEA and slowing down in NEA

16

With crude oil drop , cracker margins improve temporarily

The Asian petrochemicals industry expected to struggle in the upcoming next two years as a

surge in capacity coincides with a moderation in demand growth.

Asia markets will be see two trends: a Slow down in North East Asia markets and rapid

growth in South East Asia such as Thailand

The polyethylene market has been slowing over the past two years due to slowdown in China

and India, following a decade of strong growth. Chinas market is slowing due to oversupply

and growing Indian self-sufficiency

The Indian petrochemicals market will increasingly come into play in the regions as the

country's industrial growth strengthens demand for polymers

Rapid growth in South East Asia petrochemicals industry is supported by strong economy

growth, low costs, and proximity to major markets.


Though Asian Naphtha margins are improving and gaps

are reduced temporarily, GCC remain the cost leader

which allow is to keep its competitiveness in Asia

0

200

400

600

800

1000

1200

China Naphtha US Ethane KSA Ethane KSA E/P Europe Naphtha

Ethylene Cash Cost

Cash Cost ($/T) 2013 Cash Cost ($/T) 2015

Muntajat CSP Estimate

20152013

17


Qatar Chemical and Petrochemical Marketing and Distribution Company Q.J.S.C.

www.muntajat.qa

18

Qatar 2030

Qatars National Vision defines the long-term outcomes for the country and provides a framework within which national strategies and

implementation plans can be developed.

[email protected] - www.muntajat.qa

Thank You

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