The European Market for Adhesives and

Sealants

October 20, 2010 ARAC conference 1

FEICABernard GhyootSecretary General

2

Global A&S Demand 2010ca. 12.000 Tons / 30 Billion €

Source: CHEM/DPNA

North America

27%

Europe32%

Asia-Pacific+

Australia29%

Row13%

Source: DPNA International/CHEM ResearchOctober 20, 2010 ARAC conference

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European Market• Western Europe and Central Eastern

Europe(CEE) have a still about a 1/3 of the global market

• The European market can be divided up in three main sub-regions – Western Europe (EU15+Switzerland and Norway)– Central Europe (EU12 New member States)– CIS+Turkey

October 20, 2010 ARAC conference

EU 27 – CIS- Turkey

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Europe A&S Demand 20104.000 Tons - Value: 10,5 Billion €

Central Europe (EU12)

11%

CIS + Turkey16%

W. Europe (EU15+)

73%

Source: CHEM Research/FEICA

October 20, 2010 ARAC conference

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European DemographicsAdhesive/Sealant Demand

Source: U.N. Statistics/ CHEM Research GmbH

RegionPopul.

M. 2009

GDP Growth `09-`10

% AGR `09-'10

% AGR `10-`11 1.000 T. Billion €

Kg/ Capita

W. Europe (EU-15+)

368 1,6% 8,9% 2,5% 2.900 8,3 7,9

Central Europe (EU 12)

132 4,0% 5,6% 5,0% 450 1,0 3,4

CIS + Turkey 298 5,0% 7,9% 8,0% 650 1,2 2,2

A&S Market

Growth

Estimated 2010 A&S Demand

(Formulated Products)

October 20, 2010 ARAC conference

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Europe A&S Demand 2006-2011 Total demand 2010: 4.000 Tons - Value: 10,5 Billion €

1.000

1.500

2.000

2.500

3.000

2006 2007 2008 2009 2010 Est. 2011 Projected

1.00

0 To

ns

CEE W. Europe

Source: CHEM Research / FEICA

October 20, 2010 ARAC conference

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Market Growth 2006-2011• The recession affected the A&S demand in Western

Europe more than in the CEE region• Strong recovery in 2010 (8%<)• Moderate growth expected in Western Europe in 2011

(<3%), but more sustained growth anticipated in the CEE area (6%<),

• CIS has been severly hitted by the recession but a moderate growth started mid year while Turkey resisted well to the recession and is growing at average for the next 3 years rate >8%.

October 20, 2010 ARAC conference

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Geographic Growth 2010-2011 (volume)

W. Europe (EU15+)

Central Europe (EU12)

CIS + Turkey

0

10

20

30

40

50

60

70

80

90

100

0 2 4 6 8 10Annual Growth %

Incr

emen

tal G

row

th (

1.00

0 T

.)

Source: CHEM Research/FEICA

Projected Growth: 3.7% Incremental Demand: ca. 160 Thousand Tonnes

October 20, 2010 ARAC conference

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A&S Market Segments 2010 (Volume)

Source: CHEM Research/FEICA

Total demand: 4.5 Million Metric Tons

0

500

1000

1500

1.00

0 T.

Packaging/C

onverting

Transporta

tion

Footw

ear

Consumer/D

IY

Building/C

onstructi

on

Woodworking

Assembly/O

ther

SealantsAdhesives

October 20, 2010 ARAC conference

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A&S Segment Growth 2010-2011(volume)

Paper, Board and Related

Products

Footwear and Leather

Consumer/DIY (retail)

Building Construction,

Civil Engineering,

Craftsmen

Woodworking and Joinery

0

10

20

30

40

50

60

70

80

0 1 2 3 4 5 6

Annual Growth %

Incr

emen

tal

Gro

wth

(1.

000

T.)

Source: CHEM Research / FEICA

Projected Growth: 3.7% Incremental Demand: ca. 160 Thousand Tonnes

October 20, 2010 ARAC conference

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Market Segment Growth

• Converting/Packaging: A dynamic market supported by the food industry and exports of industrial goods

• Building/Construction: Stimulated by infrastructure development in the CEE region and renovation activities in Western Europe

• Consumer demand remaining stable

13

Market Segment Growth (2)

• Industrial Assembly: Recovery supported by export activities

• Woodworking and leather & shoe manufacture: Moderate recovery, experiencing significant offshoring to Asia and Africa.

October 20, 2010 ARAC conference

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European Market Drivers

Key drivers in Western Europe• A&S demand stimulated by EU

production of goods for export,• Strong Euro,• Banking sector is paintfully recovering

with some limitation on credit (SME‘s).• Governments spending cuts reducing

their deficits,October 20, 2010 ARAC conference

European Market Drivers (2)

• Intensifying regulatory activities:i.e. REACH, CLP, environment, public health protections,

• Rising costs (raw materials, energy)• Raw material supply disruptions,• New Innovations in product technologies,

services or new applications.

15October 20, 2010 ARAC conference

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European Market Drivers (3)

Key drivers in Eastern Europe• Economic growth and industrial

development continue in many countries – GDP growth forecast 2010-2011 greater 4%

• Disposable income continues increasing• Rising costs (raw materials, energy, labor)

October 20, 2010 ARAC conference

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Market Opportunities - Europe• Energy efficiency – Renewable Energy.

– Housing– Automotive– Industrial– Power generation

• Infrastructure rehabilitation and expansion,• Food production and packaging,• Economic/financial crisis has boost Innovation

and new applications.October 20, 2010 ARAC conference