Fmc Corporation · NYSE:FMC
Fmc — Bank of America Conference Call (March 2005)
17 slides from Fmc's conference presentation, Mar 16, 2005
Slide 1: Soda Ash and Hydrogen Peroxide Update
Soda Ash and Hydrogen Peroxide Update Michael Wilson Vice President, Industrial Chemicals Group Bank of America Conference Call March 11, 2005
Slide 2: Disclaimer
Disclaimer Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 These slides and the accompanying presentation contain “forward-looking statements” that represent management’s best judgment as of the date hereof based on information currently available. Actual results of
Slide 3: Industrial Chemicals Overview
Industrial Chemicals Overview 2004 Consolidated Sales: $813.7 million Foret 35% Peroxygens 19% Alkali (Soda ash) 46% Asia 7% Europe/Middle East/Africa 36% Latin America 8% North America 50% Excludes phosphorus chemicals sales at Astaris JV, largely in North America #1 North American manufacturer of
Slide 4: Soda Ash Overview
Soda Ash Overview 2004 global demand ~ 43.2M Tons China is the largest market consuming ~ 12.4M Short Tons Worldwide growth of ~ 2-3% per year primarily in developing regions Glass represents largest end use sector; ~ 50% of total demand Two production routes: natural and synthetic Low cost position
Slide 5: U.S. Soda Ash Demand
U.S. Soda Demand 2004 Demand of ~6.8M tons Other 11% Glass Containers 25% Flat Glass 18% Other Glass 7% Chemicals 27% Detergents 10% Pulp & Paper 2% Domestic gains as U.S. economy recovers (+) Strength across economically sensitive segments (e.g. chemicals/flat glass) (+) Solvay plans to run Colorad
Slide 6: U.S. Soda Ash Exports
U.S. Soda Ash Exports Est. 2004 Exports by Region (%) Latin America 38% Asia 34% ROW 8% Canada 9% Western Europe 11% ~5.2 million tons U.S. Regional Share Region Demand (M tons)% US Share North America 7.3 100 Asia (ex China) 4.4 41 Latin America 2.9 69 Western Europe 7.2 9 Rest of World 21.4 1 Tota
Slide 7: U.S. Soda Ash Supply
U.S. Soda Ash Supply FMC 29% OCI 20% General 17% SVM * 9% Solvay-WY 19% Solvay-CO 6% * Searles Valley Minerals 2005 Capacity M Tons Nameplate Post Mothball FMC 4.9 3.8 ** General 2.8 2.8 OCI 3.3 2.4 Solvay—WY 3.1 3.1 Solvay—CO 1.0 0.0 SVM 1.5 1.5 16.5 13.4 Estimated Effective Capacity 12.2 ** Grange
Slide 8: Industry Events Have Reset The Global Environment
Industry Events Have Reset The Global Environment Financial Weaker US dollar Cost Ocean freight rates have increased dramatically from historic levels Synthetic producers impacted by higher coke prices China is experiencing a salt shortage resulting in significant cost pressure for Chinese soda ash
Slide 9: Sold-out U.S. Soda Ash Industry
Sold-out U.S. Soda Ash Industry U.S. Bulk Soda Ash Price Index (1990 = 1.0) 1.2 1.1 1 0.9 0.8 Last Peak 100% 95% 90% 85% U.S. Capacity Utilization (% Effective) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F 2005 Contract Renewals Price Index Effective Capacity Util
Slide 10: 2004 Price Actions Will Improve 2005 Returns
2004 Price Actions Will Improve 2005 Returns Domestic All grades of soda ash Off-list prices +$30/ton (by end of contract season) List prices raised + $20/ton Significant progress made revising terms to protect future margins ( e.g, energy, freight) Most successful contract season in more than a dec
Slide 11: Soda Ash Summary
Soda Ash Summary U.S. industry operating at full effective capacity 7% growth in U.S. export demand in 2004 History shows operating rate is a leading indicator for price Financial pressure worldwide has lead to a rising price environment Raw material and energy costs Freight (rail and/or ocean) Chin
Slide 12: Hydrogen Peroxide Overview
Hydrogen Peroxide Overview North American demand for hydrogen peroxide was 1.45 billion lbs. in 2004 Hydrogen gas is the primary raw material Energy and hydrogen gas represent 50% of the cost of sales Hydrogen peroxide is shipped dilute in water, resulting in a fairly regional market with few import
Slide 13: North American Hydrogen Peroxide Demand
North American Hydrogen Peroxide Demand 2004 Demand of ~1.45 billion lbs. Food/Cosmetics 3% Electronics/Other 2% Textiles 5% Chemicals 8% Environmental 13% Pulp & Paper 69% Markets Growth Rate ‘03-’04 Pulp & Paper 4-5% Environmental 3-5% Chemicals 0-1% Textiles <0% Food / Cosmetics 2-3% Electronics
Slide 14: North American Hydrogen Peroxide Supply
North American Hydrogen Peroxide Supply Market Share by Supplier Kemira 6% FMC 22% Eka 8% 20% Solvay 21% Degussa 23% Supplier Mfg Sites FMC 4 Solvay 2 Degussa 2 Arkema 2 Eka Kemira 1
Slide 15: Tight Hydrogen Peroxide Market
Tight Hydrogen Peroxide Market N.A. Hydrogen Peroxide Price Index (1994=1.0) 1.2 1.1 1 0.9 0.8 0.7 0.6 100 95 90 85 80 75 70 N.A. Capacity Utilization (% Effective) 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005F Price Index Capacity Utilization
Slide 16: Hydrogen Peroxide Summary
Hydrogen Peroxide Summary Tight operating conditions expected to continue Capacity utilization now in the mid 90’s Solvay capacity addition to come on in second half of 2005 Solvay increment (~4% increase to industry capacity) is expected to be absorbed by continued demand growth Steadily rising pri
Slide 17: FMC Corporation
FMC FMC Corporation