SOLVAY GROUP LONDON MORNING MEETING · PDF fileChemicals Detergent Others ... USA EU15 Europe China FSU Saudi Arabia MENA Brasil India 2008 2013. C H E M I C A L S 20 Solvay London

SOLVAY GROUPLONDON MORNING MEETING

June 25, 2008

READY FOR TOMORROW

2Solvay London Morning Meeting – June 25, 2008© 2008, SOLVAY S.A. N.V.

“ A WARM WELCOME “

P. VerelstDeputy Investor Relations

C H E M I C A L S


SOLVAY SODIUM CARBONATE

« CHEMICALS SECTOR : ON THE PATH OF GROWTH »

M. V. DECUYPERGeneral Manager of the Chemicals sector

C H E M I C A L S


Our Chemicals sector

19% 17%12% 10% 4%ChemicalsDetergents ConstructionPaperGlass

67%

7%26%

Continuous review of business portfolio Exploit growth opportunities in emergent regions

C H E M I C A L S


Consolidation in EssentialsFollowing a policy of continuous improvementManaging the product portfolio

Geographic expansionThrough investments in flagship productsin high-growth areas

Technological Innovation & Growth in specialtiesIn existing businesses, extending products range and developing new usages and markets

Strategic priorities

C H E M I C A L S


Delivering on a strong model

Leverage and exploit synergies among businesses common success factors

Selective leadership

Global presence

Global supply chain & sourcing

Feedstock integration

Energy Management

Strong cost management

Disciplined & ambitious use of cash

Growing performancesREBIT/employee (EUR)

0

10000

20000

30000

40000

50000

2003 2004 2005 2006 2007

Main Products Europe WorldSoda ash 1 1Hydrogen peroxide 1 1Sodium bicarbonate 1 1Caustic soda 2 3

Selective leadership

C H E M I C A L S


Energy management : some examples

Steam- High efficiency boiler Devnya (2009) - Steam/heat recovery in Germany (2010)Renewable combustible- Biomass thermal power plant, Tavaux (2010)

ElectricityExeltium consortium, France

Membrane technologyReplacing mercury cellsRosignano, Italy

Combined cyleRoselectra, Italy

ConversionConversion tronacalcinors, U.S.A.

2006

2007

Future

050

100150200250300350400450

Av 2002Q1/03Q2/03Q3/03Q4/03Q1/04Q2/04Q3/04Q4/04Q1/05Q2/05Q3/05Q4/05Q1/06Q2/06Q3/06Q4/06Q1/07Q2/07Q3/07Q4/07Q1/08

% Energy Exp. Group/sales Oil Gas US Gas Zeeb Elec D

C H E M I C A L S


CAPEX allocation

HydrogenperoxideHPPO projects : Belgium 230 kT/yThailand 330 kT/y

Maintenance

Soda ashBulgaria +300kT/yEgypt (ongoing)acquisition of ASCC +130 kT/y

Growth in specialties

Electrochemistry

Epicerol®Thailand 100 kT/y

Medium termcapital

expenditures(incl. acquisitions)

Geographicexpansion

+320 M EUR sales

C H E M I C A L S



« Sodium Carbonate and derivated products : Strategic Minerals »

Ms. C. TahonGeneral Manager of SBU Soda Ash

C H E M I C A L S


SOLVAY SODIUM CARBONATEThe story

1861 – Industrialization of Sodium Carbonate process patented

1863 – Solvay & Cie1864 – 1st Solvay Soda Ash factory (Couillet – Belgium)

1865 : 1st Phase - Rapid expansion in Europe and USA by building FactoriesDombasle (1874), Berezniki & Donetz (1882), Syracuse (1884), Detroit (1897)1916 – more than 20 Solvay soda ash production sites in Europe & USA

1917 : 2nd phase - downturn due to wars1917 – seizure of the Russian sites1946 – Yalta – Seizure of 7 sites (E-Eu)

1958 : 3rd phase - Consolidation

1995 : 4th phase - Expansion through sites expansionsand acquisitions

1995 : Acquisition of Green River (USA)1997 : Acquisition of Sodi (Bulgaria)2003 : Acquisition of American Soda (USA)2008 : Acquisition of ASCC (Egypt) - ongoing

C H E M I C A L S



SODIUM CARBONATEDerivated productan example : SODIUM BICARBONATE

PRODUCTS

C H E M I C A L S


SOLVAY SODIUM CARBONATESolvay Sodium Carbonaten°1 in the world, n°1 in Europe

Main applications

Glass Industry -Flat Glass

PaperIndustry

Glass Industry -Container Glass Detergent

30%

30%

15%

12%

13% Flat Glass

ContainerGlass

Chemicals

Detergent

Others

(in % of present sodium carbonate sales)

C H E M I C A L S


SOLVAY SODIUM CARBONATEMarket development

Availabilityfor Export

Demand**Offer*Offer*

66,4

5,0

4,6

1,1

0,3

4,1

28,1

12,6

10,7

2013

1,564,853,8Total

0,24,82,5MENA / Africa

0,04,63,9FSU

-3,74,80,9Asia / Pacific

-2,22,50,3South America

0,73,43,1India / Pakistan

0,327,821,9China

4,68,011,8Nafta

1,69,19,6Europe

2008

Million Tons

* Based on published nameplate capacities** Solvay assumptions

C H E M I C A L S


SOLVAY SODIUM CARBONATEMarket landscape

Source: CMAI

Soda Ash World Market (Mt/y)

CAGR= 3,9%/y

0

20

40

60

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201280%

88%

Total Capacity (Mton/y) Demand (Mton/y) Operating rate (%)

Business fundamentals currently good

Increasing soda ash demandworldwide ~ + 4%> fast growth in emerging regions(Eastern Europe, CIS, Asia, Mercosur)

Growth of derivatives of soda ash(e.g. bicarbonate)

H1/08Market very tied due to - bad weather conditions worldwide- plants problems due to highproduction rates

C H E M I C A L S


SOLVAY SODIUM CARBONATEOur present market position

C H E M I C A L S


SOLVAY SODIUM CARBONATEOur growth strategy (1)

Positioning as top world producer in quality and volumes

Highly performing production facilities aiming at optimizingchemical, economical and environmental performances

Efficient, streamlined and networked supply chainoperations for our customers

Development of new markets and new applications

C H E M I C A L S



(around 40% of Chemicals sales)USA = 30% of Solvay’stotal capacities Europe = 70% of Solvay’s

total capacities

Positioning as top world producer

• Current operations

C H E M I C A L S


SOLVAY SODIUM CARBONATEPositioning as top world producer

CAGR= 4,1%/y

CIS+Baltic Soda Ash Consumption (Mt/y)

2,7

3,6

4,4

2002 2007 2012

Source: C

MA

I

e.g. Solvay Sodi (Bulgaria) :today’s largest European sodium carbonate operation (1.2 Mt/y)

Optimal access to large raw materialresourcesExcellent logistics with direct connectionto Black Sea via Port of Varna WestInvestment programs:

EUR 50 M to expand capacity to 1.5 Mt/y: to support growth in the dynamic markets of Balkans, Community of Independent States (CIS), MenaEUR 70 M to upgrade the site’s power supply

• New capacities at existing sites

C H E M I C A L S


SOLVAY SODIUM CARBONATEPositioning as top world producer

• Geographical expansion of our production implantations

Soda Ash Consumption per Capita (kg/inhabitant)

0,0

5,0

10,0

15,0

20,0

25,0

USA EU15 Europe China FSU SaudiArabia

MENA Brasil India

2008 2013

C H E M I C A L S



Alexandria-based Egyptian state-owned soda ash manufacturerNameplate capacity : 130 kT/y

Final auction on March 27, 2008 : Solvay : the preferred candidate

for the acquisition of 80% of the company

Relevant Egyptian regulatory process ongoing - Signature expected within the next months

Expansion plan

• Geographical expansion of our production implantations

ASCC (Alexandria Sodium Carbonate Company)Privatization of Egyptian soda ash plant

Positioning as top world producer

C H E M I C A L S




Highly performing production facilities aiming atoptimizing chemical, economical and environmentalperformances



C H E M I C A L S



• Environmental protection management

Highly performing production facilities

Production sites integrated for salt, limestonethrough quarries and salt/brine plantse.g.: Torrelavega (Spain)

2008 : start up of new quarryReserves of 30 years of limestone

• Integrated production facilities

Environmental certifications for all sites

C H E M I C A L S



• Energy sources management

Coal+ 225%

Coke+ 400%

Gas+ >100%


Challenges :

Further optimize

- energy production

- consumption

2000 2008

2000 2008

C H E M I C A L S



• Energy management (1)


Best available technologies programs- Co-production of steam and

electricity in all plants (8 units)

- New boilers multipurposes: e.g.: Devnya - Bulgaria

modern fluid bed coal boiler

- Power plants using alternative fuelse.g.: Bernburg - Germany

municipal waste derivated fuel

C H E M I C A L S


SOLVAY SODIUM CARBONATEHighly performing production facilities

Energy savings programs

- Process optimisation through changes toward more performing production technologies e.g.: new equipments concept and design

- Intensification of recycling of available thermal sources

- Portofolio of diversified solid fuels (origins, qualities, types…)

• Energy management (2)

C H E M I C A L S



• CO2 emissions management


Energy savings program to support CO2 emissions reduction- Implementation of best available technologies (cogeneration) - Production process optimisation through changes toward

more performing technologies

CO2 emissions reduction program

Alternative fuels uses- New combustion units based on recycled fuels or biomass…

C H E M I C A L S







C H E M I C A L S



e.g. Europe :Distribution networkFor Soda Ash

Extended set of warehousesReach new geographical areasImprove global flexibility of plantsOptimize logisticcostsInnovative solutionsin shipments

FactoryWarehouseNew warehouse

Efficient, streamlined and networkedsupply chain operations

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Fast growing applications serving new marketscontributing to people well beingincreasing the efficient use of mineral resources

Glass for High energyPerformance buildings

Glass for Photovoltaiccells

Insulationfor Passive

houses

© AGC Flat Glass Europe

LED lightingin glass

© AGC Flat Glass Europe

Glass supports for Solar power plants

Ore leaching

Development of new markets andnew applications

C H E M I C A L S



SODIUM CARBONATE

Derivated productan example : SODIUM BICARBONATE

PRODUCTS

C H E M I C A L S


SOLVAY SODIUM BICARBONATE

West European Market for Sodium Bicarbonate by end useestimation from publication « Trona Patch » - 2005

Others (incl. Flue Gas Cleaning)13 %

Detergent7%

Pharmaceutical12%

Food Applications14%

Animal Feed54%

Solvay Sodium Bicarbonate n°1 in the world, n°1 in Europe

C H E M I C A L S


SOLVAY SODIUM BICARBONATEMarket review

Europe Growth of 6% to 8% in the next 5 years in various markets

- Animal feed : 3% to 7%

- Flue gas cleaning : ~ 9 %

- Pharmacy : ~ 7%

USA Development of new applications :

- Animal feed

- Flue gas cleaning

World- Annual growth rate of 9-10 %

C H E M I C A L S


SOLVAY SODIUM BICARBONATEOur growth strategy (1)





C H E M I C A L S


SOLVAY SODIUM BICARBONATENew capacities at existing sites

Europe

Strong presence with increases of capacitiese.g.: - Germany, Spain and Portugal new capacities

- Rosignano (Italy) construction of a new unit (+ 100 kt/y) by 2009

USA

e.g. : Green River: development of 125 kt/y production of technicalgrade sodium bicarbonate : Solvair™ product forflue gas cleaning solutions

C H E M I C A L S







Our growth strategy (2)

C H E M I C A L S



Sodium Bicarbonate, a plenty of potential applications for people’s well being

Development of new markets and applications

Domestic uses• Baking Powder

• Vegetable cleaning

• Vegetable cooking

• Utensils cleaning

• Whitening powder

• Deodorization

• Swimming Pool

• Water treatment

Agribusiness• Animal feed (Poultry,

ruminants, swines)

• Crop protection

• Parasits treatment

• Vegetables / fruits protection

C H E M I C A L S



Sodium Bicarbonate, a plenty of potential applications for people’s well being

Health care & cosmetics

• Haemodialysis

• Anti-allergen

• Parasits treatment

• Tooth paste

• Deodorant

• Skin Care

Industrial uses• Drilling muds

• Flue gas cleaning

• Leather treatment

• Paper manufacturing

• Water softening

• Plastic foaming

• Surface cleaning


C H E M I C A L S



Flue gaz cleaning technologies :Application markets of Neutrec® & Solvair®• Incineration

– municipal waste, hospital waste, specialhazardous waste

– used tyres– wastewater purification sludge– animal waste

• Industries– combustion units, urban or district heating– secondary metal melting (aluminium, copper,

lead, …)– flat and container glass production– ceramics, bricks, cement production


C H E M I C A L S


SOLVAY SODIUM BICARBONATECONCLUSION

Sodium carbonate and derivated products : strategic minerals

PRODUCTS

GDP data source : IMF

Solvay

GDP

C H E M I C A L S


THANK YOU !

Q&As

“To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes, all-in scenario of R&D projects and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-lookingstatements can be identified by the use of words such as "expects," "plans," "will," "believes," "may," "could" "estimates," "intends", "goals", "targets", "objectives", "potential", and other words of similar meaning. Should known or unknown risks or uncertaintiesmaterialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Companyundertakes no obligation to publicly update any forward-looking statements"

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SOLVAY GROUP LONDON MORNING MEETING · PDF fileChemicals Detergent Others ... USA EU15 Europe China FSU Saudi Arabia MENA Brasil India 2008 2013. C H E M I C A L S 20 Solvay London