Slide 1: US Economic Environment and the Chemical Industry
US Economic Environment and the Chemical Industry Lee Mikles, CEO FutureFuel Corporation May 19, 2011 HHEMICAL COMPANY ee
Slide 2: Forward-Looking Statements
Forward-Looking Statements of economic Statements containing such terms as “believe,” “do not Pees “intend,” “estimate,” “and other of similar meaning pee SI eat UN le SER fomardlockng Statements oraly or ining ‘-utherore, such fxvarasookIng States Secumties and on, oF in press feleases, or in ofal
Slide 3: Topics
Topics x %e Economic Data and Trends Bio-based Economy _ Green Movement * Thoughts on the Future ro? ¢ 5 “ oe
Slide 4: Real Gross Domestic Product
Real Gross Domestic Product, 1 Decimal (GDPC1) Source: U.S. Department of Commerce: Bureau of Economic Analysis (Billions of Chained 2005 Dollars) 1960 1970 1980 1990 2000 2010 Shaded areas indicate US recessions. 2011 research.stlouisfed.org
Slide 5: Quarter-to-Quarter Growth in Real GDP
Quarter-to-Quarter Growth in Real GDP 6 4 2 too ow We 2007 2008 2009 2010 Real GOP growth is measured at seasonally adjusted annual rates. U.S. Bureau of Economic Analysis
Slide 6: US Unemployment
US Unemployment 01/01 01/02 01403 01/04 01/05 O1/06 O1f/07 01/08 O1/09 01/10 01/11 Month
Slide 7: Strength of the Dollar
Strength of the Dollar Nominal Major Currencies Dollar Index (Mar, 1973 = 100) 150.0000 140.0000 130.0000 120.0000 3 110.0000 $ 3 100.0000
Slide 8: Summary of US Economic Trends
Summary of US Economic Trends ** Economy picked up some steam in 2010 but recovery could best be described as “luke-warm" *¢ Governmental intervention has slowed growth @ Uncertainty around healthcare costs for private companies @ Uncertainty around taxes for companies and individuals ® Effect of in
Slide 9: Geographic Effects
Geographic Effects “* China and India represent significant markets based on population alone * Initially both countries focused building capabilities to export products in order to provide jobs to their populations ** As each populace has become more affluent from the jobs created the demand for pr
Slide 10: Free Trade
Free Trade ** With low unemployment in the western economies in the 1990's it made economic sense to "off-shore" certain jobs ** With increases in unemployment in the western economies, political and economic pressure is present to discourage or outright prevent "off-shoring" Trends: ® Currency deva
Slide 11: Petroleum
Petroleum ** Chemical industry is a petroleum based industry ** Changes in petroleum prices and availability cause significant cost changes within the industry ** There is no current economically viable substitute for petroleum ** Unrest in the Middle East will cause short term spikes in oil prices
Slide 12: Bio-Based Economy
Bio-Based Economy *» At the turn of 20th century most chemical products were based on "natural products" *» Rise of petro-chemicals due primarily to superior economics allowing displacement of chemicals from bio-sources ** American consumer has consistently voted with their pocketbook -- lower cost
Slide 13: Biofuels
Biofuels *» Current biofuels in US market are basically ® Corn-based ethanol @ Triglyceride-based biodiesel > Other products under development are: @ Green-diesel and green-gasoline through Fischer-Tropsch like chemistries -@ Cellulosic ethanol ® Algae-based triglycerides HF
Slide 14: Ethanol
Ethanol *e Corn-based ethanol -- inferior performer when compared to gasoline ** On a volume basis, corn-based ethanol probably is not sustainable because of perceptions on the effects on the food supply «* Additionally, sugar cane-based ethanol provides the best economics but is limited to tropical
Slide 15: FutureFuel's Thoughts for the Future
FutureFuel's Thoughts for the Future *» We think that the long term future is bright for North American specialty chemical companies who are aggressive ® Asian companies are beginning to focus more on internal markets and economics are more in balance than last decade -- still tough competitors thou
Slide 16: Questions?
Questions? aie Future, Fuel Chemical Company dl Building the Future Together!™ Your source for: Specialty Solvents Sulfonated Monomers Hydrotropes Custom Manufacturing Customer Service 2800 Gap Road = Batesville, AR 72501 FUTUREFUEL USA “Yy) CHEMICAL ComPaNY (870) 698-3000 ao re meee www.futurefuelc