Covestro PC

1. covestro.com
CURRENT DYNAMICS IN
THE POLYCARBONATE
MARKET
17th Asia Phenol/Acetone & Derivatives Conference,
October 15th, 2020
Dr. Guido Naberfeld,
Head of Global Product Management Polycarbonates

2. Forward-looking statements
This presentation may contain forward-looking statements based on current assumptions and forecasts made
by Covestro AG.
Various known and unknown risks, uncertainties and other factors could lead to material differences between
the actual future results, financial situation, development or performance of the company and the estimates
given here. These factors include those discussed in Covestro’s public reports, which are available on the
Covestro website at www.covestro.com.
The company assumes no liability whatsoever to update these forward-looking statements or to adjust them
to future events or developments.
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
2

3. Covestro at a glance
Dynamics in the global polycarbonate market
Megatrends as basis for innovation and sustainable market growth
A shaping force in Circular Economy
Summary
3
Agenda
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020

4. Covestro – leading in the world of plastics
Global player
• 33 production
sites globally
• Close to
markets,
customers
and suppliers
High-tech polymer
materials
• Polycarbonates
• Polyurethanes
• Coatings,
Adhesives and
Specialties
Company facts
• €12.4 bn in sales1
• 17,200 employees2
• Listed on the DAX
stock exchange since
2018
1Financial year 2019
2Calculated as full-time equivalent (FTE)
• 1,200
employees in
research and
development
• 80 years of
ideas and
inventions
Highly innovative
4 Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020

5. Covestro at a glance
Dynamics in the global polycarbonate market
Megatrends as basis for innovation and sustainable market growth
A shaping force in Circular Economy
Summary
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
5
Agenda

6. Additional capacity will be built almost exclusively in China
Polycarbonate supply by region, nameplate capacity forecast (Covestro estimates)
• In 2022, roughly 70% of
the global capacity will
be located in APAC
• New capacities are
being created almost
exclusively in China
• By 2025, China will cover
roughly 50% of the
global capacity
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
6

7. Roughly 60-65% of the global demand is located in APAC
Polycarbonate demand by region/country, demand forecast (Covestro estimates)
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
7

8. --5% -0% -5% -10% -15% -20% -25% -30% -35%
Base Worst
-5.0%
-17.0%
-3.0%
-9.5%
1.0%
Industry
2019/2020
Pre-Corona Impact of Corona
-9.0%
-34.0%
-9.5%
-24.5%
-15.5%
2.5%
GDP
1.0%
Automotive
1.5%
Construction
1.0%
Furniture
3.5%
EE&A
2019/2020 Post-Corona
Base Case Worst Case
Manufacturing sectors with global supply chains most impacted
Global Impact of Covid-19, status 09 / 2020 (based on consolidated market reports, rounded)
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
8

9. Covestro at a glance
Dynamics in the global polycarbonate market
Megatrends as basis for innovation and sustainable market growth
A shaping force in Circular Economy
Summary
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
9
Agenda

10. Market growth is supported by broad application spectrum and
innovation aligned to megatrends
Demographic Change
Urbanization
Resource Depletion
Mobility
Digital Revolution
Population Growth
Climate change
2030
(inner chart)
Global Polycarbonate
Market by Application
(Covestro estimates)
HC – Health Care
EVBP – Electrical Vehicle Battery Package​
MOB – Mobility
EEA – Electrical, Electronics , Appliances​, LED
Others – incl. Optical Data Storage, Consumer
Products, Construction, others
2019
(outer chart)
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
10

11. The car interior of the future: A vision of seamless mobility
A multifunctional living & working space for autonomous, electric and shared vehicles
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
11

12. Creating a multifunctional mobile living space
Polycarbonate solutions enable a new and intensified interior space feeling
Functional surfaces with
a premium look and feel:
Illuminated, genuine
materials combined with
polycarbonates
Personalized lighting experiences
and functionalities
Visionary fail-safe window: Opaque state or complete
translucency thanks to a Polycarbonate system
(embedded LC technology)
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
12

13. Connected devices allow remote monitoring of patient health
Our portfolio of healthcare materials enables future devices
Pocket-sized, lightweight and
durable drug delivery device for
everyday use (concept)
Connected devices allow
remote monitoring of
treatment compliance and
patient health
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
13

14. Covestro at a glance
Dynamics in the global polycarbonate market
Megatrends as basis for innovation and sustainable market growth
A shaping force in Circular Economy
Summary
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
14
Agenda

15. Polymer
Materials
Incineration
Landfill
Marine Litter
Carbon
source
Carbon
release
Total carbon efficiency
Carbon
footprint
Chemolysis
Recap:
Developing holistic long-term sustainable solutions requires close collaboration of
all partners along the value-chain
(Petro)
Chemicals
Renewable
Raw Materials
End of
Life
Use phase
Recycling
extension
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
15

16. The new vision of Covestro
We will be fully circular
Alternative raw materials Innovative recycling Renewable energy Joint solutions
Biomass, CO2, used
materials and waste can
replace fossil resources
Energy-efficient technologies
allow more used products
and waste to be recycled
Wind and sun: clean energy
must power the circular
economy
Cross-industry collaboration
is needed to bring the
circular economy forward
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
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17. Collaboration with customers to foster circularity
Covestro and Nongfu Spring to cooperate on upcycling of polycarbonate water barrels
 Enable material traceability
 Improved control of recyclates quality consistency
 Circular partnership along the value chain
Water barrels
manufacturer
Water brand
Covestro
End consumers
Water barrels
collector
Recycling
Processer
“The collaboration of the three parties enables high-end
applications of recycled plastics, and it is a good example of the
closed-loop recycling system in China.”
- quote by Zhao Kai, Vice President and Secretary-General of the China Association of Circular
Economy
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
17

18. Product*
Mass balance allows allocation of renewable
feedstock to selected end products
Illustrative example
Fossil Bio-based Mass balanced
Fossil
phenol
Renewable
phenol
Steam cracker
Fossil
polycarbonates
Renewable
hydrocarbons
Fossil
naphtha
Other fossil
products
Polycarbonates
Customer
ISCC Plus-certified (Assumption: the customer is also certified)
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
18

19. Covestro at a glance
Dynamics in the global polycarbonate market
Megatrends as basis for innovation and sustainable market growth
A shaping force in Circular Economy
Summary
Current Dynamics in the Global Polycarbonate Market │ Dr. Guido Naberfeld, Covestro │ 17th Asia Phenol/Acetone & Derivatives Conference │October 15th, 2020
19
Agenda

20. covestro.com
Covestro is an innovative market leader*
Many new entrants in China – market shift to Asia
continues
Manufacturing sectors with global supply chains
most impacted by COVID-19
Megatrends as basis for innovation and sustainable
market growth
Join us in shaping the Circular Economy!
20
*Covestro position based on total nameplate capacity at
year end 2019 relative to competitors

21. covestro.com
Thank you for your kind
attention!
Dr. Guido Naberfeld,
Head of Global Product Management Polycarbonates
Covestro Deutschland AG
guido.naberfeld@covestro.com