Future market trends and

drivers in PVC
PVC Formulation
Hans-Christoph Porth

Cologne, February 24 to 26, 2020

 Econ
omy
and
PVC
Ma rket
5
 PVC is the construction plastic
© Plastics Europe

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 6
How does this reflect on PVC compared to other standard plastics?

2019-2023 AAGR in % selected standard plastics

4.3% 4.3%
4.0%

3.4%

1.3%

PP PE PS PET PVC

Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 7
GDP development drives the PVC demand

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February

2020 8
The World Bank has a similar GDP growth expectations
Real GDP growth (%)
4.5
4.4
4.3 4.3
4.1

3.5
3.2
3
2.7
2.6
2.5
2.4 2.4
2.2

1.6
1.5 1.5
1.4

World Advanced Economies Emerging Market and Developing Economies

2017 2018 2019e 2020f 2021f 2022f

Source: World Bank, Jan. 2020

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 9
PVC is growing in all regions

Global PVC Demand. 000 MT

70,000

+3,4 % p.a.
60,000

50,000

40,000

30,000

20,000

10,000

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Americas (CAGR 0.4%) W&C Europe (CAGR -0.5%) NE Asia (CAGR 4.1%) Indian Sc' (CAGR 7.6%) ROW (CAGR 3.6%)

Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February
2020 10
PVC continue to grow both in rigid and flexible applications

Global PVC Demand. 000 MT

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Flexible Applications (CAGR 3.2%) Rigid Applications (CAGR 2.7%)
Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 11
Differentiated growth in selected periods and segments

CAGR selected periods and segments

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0%
Flexibles Rigids Americas W&C Europe NE Asia Indian SC ROW Global
2005-2011 2012-2018 2019-2023 2024-2028

Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 12
 Capa
cities
13
The market development is clearly reflected in the regional capacities

Global YoY capacity deltas. 000 MT

5,000

4,000

3,000

2,000

1,000

-1,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Americas W&C Europe NE Asia Indian SC ROW Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February

2020 14
…but not in all: Net trade pattern differs in the different regions
Global net trade. 000 MT
7,000

5,000

3,000

1,000

-1,000

-3,000

-5,000

-7,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Americas W&C Europe NE Asia Indian SC ROW

Sources: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 15
 Econ
omic
chall
enge
s
16
Feedstock cost differential is going to normalize again, but a
difference is expected to continue

Quellen: IHS, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 17
Electricity costs are on the rise in total Europe

Sources: EEX, Evonik

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 18
And emission costs are contributing to it additionally

Sources: Evonik, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 19
The challenges from the actual logistics are negatively impacting the
PVC industry

Demand for logistics services is growing above The logistics market has reducing capacities
average • Ailing infracstructure (road, train, barges)
• Basic GDP growth • Lack of standardization
• Internet trade binds traditional logistics • Continuously reducing driving times (US,
capacities Europe)
• The car manufacturer are changing their • Shortage of young people (truck driver,
logistic concepts logistics personnell)
• Raising toll costs
• Additional burocratic burden

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 20
 Susta
i nabi
l i ty
© VinylPlus
21
The Circular Plastics Alliance could be a disruptive changer to the
European plastics industry

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 22
 One base requirement
© Plastics Europe

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February

2020 23
Progress Report 2019

VinylPlus Voluntary Commitment

5 challenges, 35 targets
1. Reducing emissions
2. Reducing energy consumption
3. Controlled loop management
4. Sustainable use of additives
5. Sustainability awareness

Independently audited ‘Progress Reports’

Overseen by a ‘Monitoring Committee’

© VinylPlus

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 24
More than 200 companies in VinylPlus®
The programme covers the EU-28, plus Norway and Switzerland

Resins Additives Plastic converters

+
+

© VinylPlus

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 25
 In Partnership with 170 recyclers

European network of PVC recyclers

+
© VinylPlus

© Eurocell Recycle 2019

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 26
 5 Million Tonnes of PVC recycled since 2000
© VinylPlus

All recycled PVC is used in new products

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 27
PVC Recycling for a Circular Economy in the EU

Next Targets
1mt
VinylPlus has backed the European Commission’s 900 kt 2030
pledging call to increase recycling
800 kt
2025
We confirmed new recycling commiments for 2025 and
2030 2020
Implementing certification schemes to reinforce
traceability of PVC waste

PVC recycled per year

© VinylPlus

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 28
The industry is considering all options…

All options will contribute to a Circular Economy

© VinylPlus

in partnership with Resolest, Solvay and Suez

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 29
The circular economy is directly impacting the industrial
development in PVC
PVC Demand in Window Profiles
2000

1800

1600

1400

1200

1000

800

600

400

200

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Demand new material PVC Recycling Sources: VinylPlus, Orbia/Vestolit

Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 30
Conclusions

• GDP growth drives PVC growth

• Capacity growth in alignment with market growth
• The European PVC industry will remain competitive
• Anyhow, energy cost increases need to be passed on
• The changing environment in logistics will trigger optimized
processes
• Sustainability is a major task for the whole value chain
• Recycling is gaining market share
• The Circular Plastics Alliance could be a game changer, at least in
Europe
Future Market Trends and Drivers in PVC, Hans-Christoph Porth, February 2020 31
Thank you for your attention!

Hans-Christoph Porth

25 February, 2020