4/23/217 Other End Use Market Segment Outlook Rubber Gloves IISRP AGM 217 Taipei, Taiwan No Dock Moung Senior Consultant ICIS Analytics & Consulting ICIS is part of RELX Group RELX is the world-leading provider of information solutions for professional customers across industries Reed Business Information provides data, analytics and insight that enable customers to evaluate and manage risks, and develop market intelligence, supporting more confident decisions, improved economic outcomes, and enhanced operational efficiency. ICIS is the world's largest petrochemical market information provider, and has fast-growing energy and fertilizer coverage. Its aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting. 1
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4/23/217 Agenda Rubber Gloves Demand Raw Materials Demand & Supply Summary 5 Rubber Gloves Demand 3
4/23/217 Demand increased by nearly 4-folds in 2-215, an despite changes and North together account for the majority share of the market. Billion pieces Billion Pieces 25 2 15 1 25 2 15 1 5 5 World Total Rubber Gloves Demand 2 23 26 29 212 216 N S & C F. USSR Africa Middle East NE Asia Asia and Pacific >155 billion pieces increase in 16 years, over 4-folds increase World Total Rubber Gloves Demand The rubber gloves industry is one of the most dynamic of the rubber industries, CAGR 9.3%, 2-215. 2 22 24 26 28 21 212 214 216 Total However, it is not recession proof. Growth Rates 3% 2% 1% % -1% -2% North 45% N 35% Asia and Pacific 6% Asia and Pacific 5% Regional Shares, 2 NE Asia 9% North East Asia 4% Africa 2% Middle East 1% Regional Shares, 216 Middle East Africa 3% 3% S & C 13% South & Central 6% Former USSR 2% F. USSR 3% 35% 28% Dramatic Regional Transformation In 21, North and together accounted for 8% of the total demand In 216, the share decreased to 61%, losing to all other regions South & Central made the most gains, increasing to 13% from 6% To understand the dynamism of the industry is to understand the changes that have taken place to the population and wealth of the world within the context of the publicly acknowledged awareness and need for protection against communicable diseases. Population is the potential. Millions 7,5 7, 6,5 6, 5,5 5, 4,5 There are 282 million people in the Former USSR Asia & Pacific has the largest population: 1.6 billion India joins China in the 1. billion club South & Central surpasses North : 425 million vs 424 million World population rises above 6. billion Asia & Pacific s populations tops 2. billion There are 282 million people in the Former USSR World population rises above 7. billion Africa joins NE Asia and Asia & Pacific in the 1. billion Club There are now more 5 million people in South & Central 4, 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 216 8 4
4/23/217 Wealth is the ability. Absolute wealth has more than doubled in 199-216, however the relative wealth has been lagging behind, increasing by less than 1.5 times. 8 GDP/K of the world will be US$1,293 11, GDP, US$ Trillion, Constant 21 7 6 5 4 3 World GDP/K is US$7,79 in 199 World GDP/K shrinks for the first of 3 times in 199-216. The wealth of the world reaches US$4. trillion for the first time. World ushers in the 3 rd millennium with GDP/K increasing above US$8, Following year, the absolute wealth of the world hits the US$5. trillion mark. GDP/K of the world decreases by US$275 Absolute wealth of the world shrinks. US$7. trillion mark is breached. 1, 9, 8, 7, 6, GDP per Capita, US$, Constant 21 2 5, 199 1992 1994 1996 1998 2 22 24 26 28 21 212 214 216 World GDP per Capita 9 The real story of world population growth has been about the rise of Africa, and the continuation of expansion in Asia. North 49 368 South & Central 622 565 Africa: Population expands by 85% in 199-216. 1,164 Former USSR 284 Middle East 236 134 282 Asia & Pacific: 5% growth = 792 million 2,377 North East Asia 1,619 1,37 NE Asia: Comparatively slower rate of growth, but still adds 248 million Top = 216 Bottom = 199 54 356 629 Africa 1,585 Asia & Pacific 1 5
4/23/217 and North now share the absolute wealth space with North East Asia, but not in relative terms. Absolute Wealth, US$, Trillion North 2. 2.1 North East Asia 16.6 North 4,862 32,25 GDP/K, US$ Top = 216 Bottom = 199 4.3 South & Central Former USSR Middle East 2.1 2.3 2.5 Africa 7.1 Asia & Pacific Top = 216 Bottom = 199 8,53 South & Central Former Middle East USSR 7,462 1,753 1,259 Asia & Pacific 1,964 3,4 Africa North East Asia Asia and Pacific increased its absolute wealth by more than 3.5 times NE Asia has added an extra US$1.4 trillion, in 199-216. and North still accounts for the majority share of the absolute wealth (53% in 216). The GDP/K of the most populous regions are disproportionately small Africa s GDP/K is US$1,964, while that of the Asia and Pacific is US$3,4 11 Growing population (the number of potential consumers) and wealth (the ability to buy the goods) came together and drove the rubber gloves industry. 25 GDP K/Rubber Gloves Consumption per Person/Year 2 Pieces per Person/Year 15 1 5 1 2 3 4 5 6 7 US$/Person 12 6
4/23/217 But, what now? Will the demand continue to grow, and where will it come from? Number of Vehicles per Person Total Vehicles in Use, Japan, 196-215 Total Vehicles in Use, Japan, 198-215 6 5% 65 45% 6 5 4% 55 35% 4 3% 5 25% 45 3 2% 4 2 15% 35 1% 1 5% 3 % 25-5% 2 196 197 198 199 2 21 2, 25, 3, 35, 4, 45, 5, Vehicles in Use Growth Rates GDP per Capita Percentage Number of Vehicles per Person Index Passenger Car Sales 22 2 18 16 14 12 1 8 6 197 1975 198 1985 199 1995 2 25 21 215 Japan Germany France Yes, but there is an upper limit neither population or wealth growth could breach example from an older, established industry Japan measured against population, and against wealth both show a ceiling Cross-sectional example Japan, France and Germany all show that an upper limit was reached in the early 199s. 13 North North East Asia Rubber Gloves/Person/Year 16 1 14 8 12 1 6 8 4 6 4 2 2 22 24 26 28 21 212 214 216 N Rubber Gloves/Person/Year 6 5 4 3 2 1 2 22 24 26 28 21 212 214 216 S & C F. USSR Middle East Chart Title 15 8 6 1 4 5 2 2 22 24 26 28 21 212 214 216 NE Asia Africa Asia and Pacific Afica & Asia and Pacific There are signs of rubber gloves demand coming close to hitting a ceiling in North and Trend of rubber glove demand per person has more-or-less been flat since the late-2. Gloves/Person/Pieces Rubber Gloves Consumption per Person Regional 216 [X VALUE] 18 [BUBBLE SIZE] 16 14 12 1 8 6 4 2-2 [X VALUE] [BUBBLE SIZE] [X VALUE] [BUBBLE SIZE] [X VALUE] [X VALUE] [BUBBLE SIZE] [BUBBLE SIZE] [X VALUE] [BUBBLE SIZE] [X VALUE] [X VALUE] [X VALUE] [BUBBLE SIZE] [BUBBLE SIZE] [BUBBLE SIZE] All other regions are showing firming increasing trend, except for the Former USSR. The gap between the fastest growing and largest populated regions and the North and are huge, representing 14 space for potential growth of the regions. 7
4/23/217 Some growth scenarios built around the gloves/person/year of regions and constant growth: 216 gloves data, population, and the assumption that the world consumption will reach one of the higher numbers. Billion Pieces 14 12 1 8 6 4 2 World - Rubber Gloves Demand Scenarios North Constant, 216 225 23 Most Likely Scenarios 9.3% Extrapolation Pieces 4 35 3 25 2 15 1 5 World - Rubber/Person/Year y = 7.38x.4546 R² =.9193 2 23 26 29 212 215 218 221 224 227 23 By 23, the GDP/K gap between the Africa and Asia and North and will remain substantial. In fact, GDP/K of North East Asia will be lower than s in 216. This makes the and North scenario being achieved highly unlikely within the next fourteen years US$ 6, 5, 4, 3, 2, 1, Regional GDP per Capita, 23 North South & Central Former USSR Africa Middle East North East Asia -1, Asia & Pacific 15 The most likely scenarios are the Extrapolate and the 9.3%, and for the demand to fall within the range between the two. Billion Pieces 8 7 6 5 4 3 2 1 GAP is the difference between the 9.9% (High) and Extrapolate (Low) scenarios. Rubber Gloves World - Two Scenarios, Pieces 2 25 21 215 22 225 23 GAP 9.3% Extrapolate 5 45 4 35 3 25 2 15 1 5 GAP, Billion Pieces 16 8
4/23/217 Raw Materials Demand & Supply Demand for NBR Latex has been growing rapidly, and the future appears bright. Rubber Gloves World - Rubbers Demand Rubber Gloves World - Total Rubber Weight 6 5 1 9 8 ' Tonnes 4 3 2 1 It is assumed that the weight of the gloves will continually decrease through to 23. 2 15 1 5 GAP, ' Tonnes ' Tonnes 4 3 2 1 21 211 212 213 214 215 216 7 6 5 4 3 2 1 Total, ' Tonnes ' Tonnes 2 15 1 5 2 25 21 215 22 225 23 GAP 9.9% Extrapolate Rubber Gloves World NBR Latex Demand Constant share between natural rubber and NBR has been assumed for 216-23. NBR Latex NR Latex Total 21 212 214 216 218 22 222 224 226 228 23 18 9
4/23/217 The supply of natural rubber latex is highly concentrated, with Thailand accounting for 88% of it in 215. However, the gloves industry is adequately supplied with natural rubber latex: it took up only 53% of the total exports. ' Tonnes 8 7 6 5 4 3 2 1 NR Latex Exports - Leading Countries 2 21 22 23 24 25 26 27 28 29 21 211 212 213 214 215 Guatemala Liberia Malaysia Thailand Vietnam Others NR Latex Exports - Leading Countries, 215 Malaysia 3% Liberia % Guatemala 3% Others 1% Vietnam 5% Thailand 88% Guatemala, Liberia, Malaysia and Vietnam are the other significant sources of Latex However, the Latex from Guatemala and Liberia are nearly all consumed outside Asia Malaysia and Vietnam, the majority of the exports are going to the non-rubber gloves producing countries. 19 There are six countries with NBR latex capacity, all in Asia, but it is more evenly distributed, with Malaysia, South Korea and Taiwan the leading producers. 16 China 56 South Korea 257 52 21 216 Japan 32 41 21 216 Malaysia 2% NBR Latex Capacity - 216 62, Tonnes South Korea 31% 21 216 Thailand 44 Taiwan 173 Japan 7% 45 21 216 China 9% 21 216 Malaysia Thailand 7% Taiwan 26% *Volumes in tonnes 92 136 21 216 Copyright 216 ICIS Private & Confidential 1
4/23/217 There is sufficient NBR latex capacity at present, but additional capacity will be required from 222 onwards. By 225, incremental demand is expected be large enough to require additional 2 world scale plants. ' Tonnes 7 6 5 4 3 2 1 Rubber Gloves World NBR Latex Market Situation 21 211 212 213 214 215 216 Capacity Gloves Consumption Operating Rate 1 9 8 7 6 5 4 3 2 1 Operating Rates, % ' Tonnes 2 18 16 14 12 1 8 6 4 2 Rubber Gloves World NBR Latex Demand and Supply Confirmed world NBR latex capacity 218, 753, tonnes 216 217 218 219 22 221 222 223 224 225 226 227 228 229 23 NBR Latex Range Capacity Average 2 World scale plant (9, tonnes) requirements 6 21 Summary 11
4/23/217 Summary The rubber gloves industry is a dynamic one, having expanded at CAGR 9.3% in 2-216 The key demand drivers are growing population, and increasing wealth or GDP/K At present and in the recent past, the demand has been driven by and North Going forward, the potential lies with Asia, especially Asia and Pacific NBR latex has been winning market share of the raw material supplies Of course, new investments will be needed over the medium-to-longer term in NBR latex capacity 23 THANK YOU Contact us No Dock Moung Senior Consultant ICIS Analytics & Consulting Tel: +65-678-4833 (DID) Email: dockmoung.no@icis.com ICIS Consulting: Powered by Data. Driven by Insight. 12