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Enhancing the performance of key composite applications through new glass reinforcements

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This presentation will cover the Composite Market growth trends and Owens Corning glass fiber product developments for end-user productivity and product performance improvements. The presentation includes Owens Corning product developments around sizing chemistry, product property and glass chemistry innovations that deliver a range of product solutions in key glass fiber market segments including wind energy, automotive, construction and industrial applications.

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Enhancing the performance of key composite applications through new glass reinforcements

  1. 1. Enhancing the performance of key composite applications through new glass reinforcements This presentation will cover the Composite Market growth trends and Owens Corning glass fiber product developments for end-user productivity and product performance improvements. The presentation includes Owens Corning product developments around sizing chemistry, product property and glass chemistry innovations that deliver a range of product solutions in key glass fiber market segments including wind energy, automotive, construction and industrial applications. ASA K. YAMADA Director, Thermoset Marketing Owens Corning, Composite Solutions Business SPE TOPCON February 25, 2014 Copyright © 2014 Owens Corning. All Rights Reserved.
  2. 2. Outline 75 Years of Glass Fiber Industry Glass Fiber Growth and Markets Innovative Product Developments Composites Moving Forward
  3. 3. Glass fiber composites over time: Accelerating growth through new applications Source: Citi, IHS Global Insights, JEC Composites, WorldBank report, OC Assumptions. Index Automotive 201020001990198019701960 Marine Ladder Pipe (Multi-Appl.) Tanks - Chemical Shingles Sporting Goods Tanks - Petroleum Military/Armor Desulpherization Other Wind Energy - Blades Glass Fiber Composites A positive story of accelerating growth, providing key benefits  Glass Fiber Composites replacing traditional materials (Aluminum, Steel, Wood)  Composites key values of light weight, high strength and corrosion resistance fit with the key challenges facing the world: clean energy, & water, infrastructure, urbanization , light weighting
  4. 4. 0 0.8 1.2 1.6 3.7 Wood Steel Aluminum Glass Fiber Carbon Fiber Materials Growth as a Multiple of Change in Industrial Production Global Market Size (Indexed to Glass Fiber) Growth multiples over 1981-2011, except carbon fiber which is 1990-2011. Global market sizes estimated in revenue USD as of 2011 Source: IHS Global Insight, Owens Corning management estimates, World Steel Association, Food and Agriculture Association of the United Nations, U.S. Geological Service Glass Fiber Growth Compared to traditional materials Glass Fiber Growing as a Substitute for Traditional Materials 26 111 14 1 0.1
  5. 5. *75% confidence interval; “excellent correlation” defined as >95% R2 Source: IHS Global Insight, Fiber Economic Bureau, Glass Fiber Europe, Global Trade Information Services, Inc. and Owens Corning management estimates 1101009080706050 4000 3000 2000 1500 1000 Industrial Production Indexed:2005=100 Log Basis GlassFiberMarket(Ktons) LogBasis Global Glass Fiber Demand vs. Industrial Production 1981-2011 4000 3000 2000 1500 1000 Industrial Production Indexed: 2005=100 Log Basis 50 60 70 80 11010090 GlassFiberMarket(Ktons) LogBasis Global Glass Fiber Demand Grows at 1.6 Multiple of Industrial Production Growth  Excellent 30-year correlation  Glass fiber / industrial production growth multiple:  30-year average: 1.6  Any 10-year period: 1.3-1.7*  Any 5-year period: 1.0-2.0* Glass Fiber Growth Driven by Global Industrial Production
  6. 6. 1 10 1981 1991 2001 2011 GlassFiberDemand (MMTons)-logbasisGlass Fiber Market Outlook 6 Glass Fiber Market Demand 30 Years Averaging 5% CAGR 2013-2016 Growth Forecast 2017 Glass Fiber Market Expected to Continue to Grow at Historical Rates About 60% of Growth Expected to Come from China Glass fiber market demand excludes E-glass yarns Sources: Fiber economic bureau, Glass Fiber Europe, Global Trade information Services, inc. and Owens Corning management estimates as of Apr 2013 - 250 500 750 China Americas EMEA Rest of Asia India DemandGrowth(ktons)Megatrends Forecasted Glass Fiber Growth 2013, 2014 *3 Industrial Production Growth*1: Population  Urbanization  Sustainability 4.8% CAGR +400-500kt 2013 – 1.9% 2014 - 4.1% X Material Substitution *2: 1.6
  7. 7. Industrial Production by region *1 ( yoy growth%) Resilience in 2012 2011 2012 2013F 2014F World 3.1 1.6 1.9 4.1 N America 3.4 3.4 2.4 3.4 Euro zone 2.3 (2.7) (0.7) 1.8 China 10.3 8.1 7.5 7.0 Japan (2.3) (1.0) (0.0) 5.6 Latin Am 3.2 (0.0) 2.0 3.6 India 4.8 0.7 3.3 6.5 US Industrial Production quarterly (Growth, %) *1 • 2014 forecast with increasing strength and North America and Europe offsetting slowing developing economies • The acceleration forecast through 2013 was slower and less pronounced • 2014 IP is forecast to return to historical levels Economic Forecasts 1 2 3 4 5 2,8 3,6 Q1 2013 2,5 Q1 2012 4,8 Q3 2013 2,5 3,4 2,0 4,5 Q3 2012 4,0 4,6 eQ3 2014 4,0 3,9 eQ1 2014 Source: Oxford Economics. February 2014
  8. 8. Construction 34% Transportation 27% Industrial 15% Consumer 16% Wind 8% Glass reinforcements market defined as glass fiber reinforcements and direct conversion products as consumed, excluding yarns Source: Owens Corning management estimates • Residential • Commercial • Water transportation & storage • Cars • Trucks, buses, trains • Marine • Factories • Mining • Offshore platforms • Appliances • Electronics • Recreation The benefits of composites continue to drive penetration and growth Miniaturization Maintenance free living Corrosion resistance Productivity Skilled labor shortage Aging Infrastructure Light weighting Productivity Glass Fiber A $7 Billion Global Market
  9. 9. Light Vehicle Production, MM Units*4 Key Trend; EURO 5,6, & NA CAFÉ regulations require lower vehicle weight to meet CO2 / mpg targets Governments are implementing regulations which are driving applications for composites. Composites penetration is forecast to hit 25kg per vehicle in 2020 20 25 30 35 40 45 50 55 60 65 70 2005 2010 2015 2020 CAFÉFuelEconomyRequirements (mpgbasis) A 1mpg miss can result in up to $55/vehicle penalty *1 1) http://www.cato.org/pubs/regulation/regv25n3/v25n3-8.pdf 3) Plasmart, MarketsandMarkets Report, Transparency Market Research 2) http://www.un.org/esa/dsd/resources/res_pdfs/csd-19/Background-paper3-transport.pdf 4) IIHS Global Insights and CSM Auto Forecast December2013 Comparison of Fuel Economy Standards *2 9 Transportation Market Driven by Vehicle Light Weighting Automotive Impact: • On average glass fiber consumption per car is 8kg globally *1 • 500K units creates 4,000tn of demand • Unit usage forecasted to double to 16kg/unit by 2020 *1 28 28 28 19 21 23 19 19 20 15 16 17 17 29 25 20 0 20 40 60 80 100 2012 2013 84 87 e2015 RoW 92 e2014 Europe China North America 82
  10. 10. Sizing Technology Developments: Transportation Market OC™ Product innovations: Direct Roving for Long Fiber Thermoplastics Poor adhesion between fiber/resin No Resin Bonding Good adhesion between fiber/resin Excellent Resin Bonding Sizing chemistry to improve the glass / polymer interface
  11. 11. Focused developments on FRP bonding performance PERFORMAX® SE4502 Roving for LFTP PA Improved glass adhesion to PA enables: • 30% improvement in impact • 15% improvement in tensile/flex PERFORMAX ® SE4849 Roving for LFTP PP Excellent glass processing/wet-out enables: • 20% higher line speeds • Increased glass loading for new applications Transportation Market OC™ Product innovations: Direct Roving for Long Fiber Thermoplastics
  12. 12. Key Trend: Shortage of skilled labor, stricter codes & green building trends drive the adoption of composites in construction sector. *1 Aging Infrastructure Productivity Improvement Materials Conservation Weather & Disaster Source: 1)FMI Forecast 2013, McGraw Hill World Green Building Trend, Innovation in Construction Summit2) US Census Bureau and Freddie Mac January 2014 4) CompositesWorld Construction Market Driven by Durability, Toughness, Strength Housing Starts: 1 house = 100kgs of glass on average *4 (roofing shingles, tub/shower, window lineals , doors etc.) 1,0 0,6 0,8 0,4 1,4 1,2 CAGR+21% e2015e2014 1,10 1,35 MM Units 2012 0,92 2013 0,78 Housing Starts*2
  13. 13. Construction Market OC™ Product Innovations: Multi-end Roving for Spray-up Physical Property Developments • Glass fiber micronage, bundle tex, bundle integrity and stiffness • Sizing chemistry for end product smoothness, resin impregnation and color • Doff dimensions, weight and package run-out Property optimization for application performance
  14. 14. Construction Market OC™ Product Innovations: Multi-end Roving for Spray-up Focused developments on downstream fabrication process performance OptiSpray ® F Multi-end Roving for Spray-up • High runnability, low gun stoppage • High dispersion, easy too roll • Good laydown, low air entrapment • Fast wet-out, excellent conformability • Higher glass/resin ratio
  15. 15. Key trend Glass fiber composites are now lower first cost than stainless steel Increasing demand and extraction costs for Nickel and Chrome have increased stainless steel costs. This trend is forecast to continue. For many applications composites are now a lower first cost. Composites, with 1.2MM tons used annually (800kt of glass fiber) in the corrosion market, still only compose 0.2% of total corrosion materials market. 1) IHS Global Insight December 2013 2) IBIS and Associates, July 2012. Simple single wall cylindrical tank, no manway, vents, flanged ports etc. $0 $5,000 $10,000 $15,000 $20,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 costpertank TankSize - Gallons Tank Cost Comparison Composites vs Stainless Steel *2 Industrial Market Driven by Durability, Long Life, Corrosion Resistance Industrial:  Each mile of 4 inch diameter pipe contains approx. 4 tons of glass fiber  Adding a Flue Gas Desulphurization (FGD) system to a 9GW coal fired power plant uses approx. 8-9,000 tons of glass fiber 40 38 41 28 28 28 11 16 18 37 29 19 Refineries 201420132012 Chemicals Utilities 80 82 87 2015 86 North America Industrial Spending, Real $Bln*1
  16. 16. Glass Chemistry Developments Advantex® boron-free, anti-corrosive E-CR glass • Improved Mechanical Properties • Improved Corrosion Resistance Advance sizing chemistry • Increased epoxy resin bonding • Protection for glass fibers E- Glass Advantex® Glass Conventional E-glass breaks down when FRP laminate is exposed to 10% sulfuric acid at ambient conditions Industrial Market OC™ Product Innovations: Direct Roving for Filament Winding
  17. 17. Advantex® SE 2307 Type 30 Roving for High Pressure Epoxy Pipe 76647 50098.3 55054.3 Aromatic Amine (MDA) Curing System Commercial Industrial Market OC™ Product Innovations: Direct Roving for Filament Winding Pipe Burst Strength Advance sizing provides step-out improvements in high pressure epoxy pipe burst strength
  18. 18. Key Trend: Wind power forecast to be 12% of global electricity production by 2050 *1 at which time over 2,000 GW of installed wind capacity will annually avoid the emission of up to 2.8 gigatons of CO2.*1 •US Wind Market Positioned for strong near terms growth*2 •Efforts to secure PTC eligibility in 2013 resulted in 13GW under construction and 11.5GW in order intake from Jan 13 to Feb 14 •A potential tax extenders package that include a PTC extension would create upside to the n16GW forecast from 2014 to 2016. 18 CO2 emissions reductions by 2050 (share of power sector emissions reductions, IEA Blue map scenario) *1 Source: 1) International Energy Agency (IEA) Technology Map till 2050. March 2012 2) MAKE Consultant Q4 2013 Report and Flash Note Feb. 2014. AWEA FY2013 report Wind Energy Market Driven by clean renewable resources Wind Energy:  Each MW of wind energy consumes approximately 7.5 tons of glass fiber*2 This translates to ~13Ktn in 2013 and ~30Ktns in 2014 e20152012 2013 e2014 13,8 3,3 8,2 8,2 North America Wind Turbine GW Installed*2
  19. 19. Industrial Market OC™ Product Innovations: Glass fiber fabrics for Wind Energy Downstream glass fiber engineered fabrics LONGER BLADES ON-SHORE / OFF-SHORE / IN LOW WIND AREAS INDUSTRY TRENDS LONGER BLADES ON-SHORE Ultrablade® Fabrics
  20. 20. Production of energy with no emission of CO2 (wind, tidal, solar, geothermal) Providing the basic infrastructure to deliver clean water to excess of 5 billion people Providing housing and infrastructure to a growing population in developing and third world countries Reducing the weight of modes of transportation to responding to increasing cost of energy Clean Energy Water Infrastructure Urban Infrastructure Industrial Light Weighting Composites Moving Forward

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