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Umicore in Greater China Bernhard Fuchs, 11 March 2010 Section title slide Umicore Blue 1

Agenda Umicore s history in China - before 2000 Umicore s history in China - after 2000 Umicore s business in China today Investments in Greater China Key issues for a materials technology company in China Umicore s China philosophy 2

Umicore in Greater China Umicore s Chinese name is 优美科优 ( U ) 代表优质为本, means excellence or best quality as the principle 美 ( Mei ) 代表美化生活, means to beautify life, as materials for a better life 科 ( Ke ) 代表科技创新, means technological innovation 3

Umicore s history in China (to 2000) First marketing office in Hong Kong 1982 Fact-finding tour of 7 Umicore specialists during one month in 1993 Decision to focus on cobalt as the first priority First joint venture contract in 1995: creation of Shanghai Blue Lotus Valuable learning experience and creation of initial expertise pool First venture rapidly profitable 4

Umicore s history in China (2000 to date) Intensification of investments JV for nickel containing rechargeable battery materials established in 2004 Rechargeable battery materials production plant 5

Umicore s history in China (2000 to date) Intensification of investments JV for nickel containing rechargeable battery materials established in 2004 Inauguration of new automotive catalyst facility in 2005 Establishment of regional HQ in Shanghai in 2005 Technical Materials acquisitions in 2006 Expansion of Jewellery and Electroplating production and recycling capacity in 2009 Jewellery and electroplating recycling and production plant Foshan jewellery scrap recycling 9

Umicore s history in China (2000 to date) Intensification of investments JV for nickel containing rechargeable battery materials established in 2004 Inauguration of new automotive catalyst facility in 2005 Establishment of regional HQ in Shanghai in 2005 Technical Materials acquisitions in 2006 Expansion of Jewellery and Electroplating production and recycling capacity in 2009 Establishment of Li-ion rechargeable battery materials production facility in 2009 Li-ion rechargeable battery materials production plant 10

Umicore s history in China (2000 to date) Intensification of investments JV for nickel containing rechargeable battery materials established in 2004 Inauguration of new automotive catalyst facility in 2005 Establishment of regional HQ in Shanghai in 2005 Technical Materials acquisitions in 2006 Expansion of Jewellery and Electroplating production and recycling capacity in 2009 Establishment of Li-ion rechargeable battery materials production facility in 2009 Automotive catalysts production plant Further expansion of automotive catalyst operations planned for 2010 11

Business with an industrial presence in China Umicore Advanced Materials Precious Metals Products & Catalysts Precious Metals Services Zinc Specialties Cobalt & Specialty Materials Automotive Catalysts Jewellery & Electroplating Precious Metals Refining Building Products Electro-Optic Materials Technical Materials Battery Recycling Zinc Chemicals Thin Film Products Platinum Engineered Materials Precious Metals Management Element Six Abrasives (40%) Precious Metals Chemistry 12

Umicore in Greater China Footprint: 2,264 people (1,499 in associates) Beijing # 32 Thin Film Products UMS Changsha #124 Suzhou # 483 (198) Automotive Catalysts Technical Materials Element Six Abrasives Zinc Chemicals Wuxi # 74 (74) Ganzhou # 870(870) Element Six Abrasives Cobalt Specialty Materials Shanghai # 122 Guangzhou # 7 UMS Cobalt Specialty Zinc Chemicals UMS Corporate Foshan # 34 Jiangmen # 443(343) Hong Kong # 47(6) Hsinchu # 16 (4) Taipei # 12 (4) Jewellery & Electroplating recycling Cobalt Specialty Materials UMS Element Six Abrasives Thin Film Products Element Six Abrasives UMS Element Six Abrasives 13

Umicore in Greater China Headcount distribution in China Revenues distribution in China Corp. 10 UMS 85 UMS 27% ZS 167 PMP&C 360 ZS 5% AM 4% PMP&C 64% AM 143 Headcount as of 01/02/2010 Excluding 1499 people in associates PMP&C = Precious Metal Products & Catalysts AM = Advanced Materials ZS = Zinc Specialties Corp. = Corporate UMS = Umicore Marketing Services 14 Chinese operations currently account for approximately 6% of Umicore s revenues UMS comprises sales of non Chinese operations

15 Investments in Greater China

Umicore s investment strategy for Greater China Market needs Flexibility Investments to serve the local Chinese market Differentiation by know-how and services instead of costs Follow Umicore s Business Unit approach Several legal entities instead of one large one Experienced in handling Joint Ventures Structuring Regional Headquarter (RHQ) as hub for defined central services Wholly owned foreign enterprises (WOFE) as well as Joint Ventures Greenfield as well as acquisitions Investment Umicore has invested a total of 127m in China over the past decade 16

Current investment: Automotive Catalysts Site Umicore Automotive Catalysts(China) Co. Ltd. In Suzhou Wholly owned foreign enterprise (WOFE) Car production in Greater China Production Investment Broad range of automotive catalyst products First investment done in 2004/2005 16 12 8 Source: CSM (in million cars) Continuous investment since Further investment planned for 2010 Investment aim 4 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Further expansion of capability as well as capacity of automotive catalysts 17

Current investment: Jewellery and Electroplating Site Precious metals demand in China (Tonnes) Silver Gold Platinum Umicore Jewellery Materials Processing Co. Ltd. Foshan 1,400 1,200 Source: GFMS / estimates for 2009 Wholly owned foreign enterprise (WOFE) 1,000 800 Investment 600 Greenfield investment done in 2009 Based in the center of the Chinese jewellery industry (Guangdong Province) 400 200 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Production Recycling of precious metals containing waste from the jewellery industry Investment aim Supply the local Chinese Jewellery Industry with trustworthy recycling services and products Transfer the successful business experience of other regions to China 18

Current investment: Rechargeable Battery Materials Site Jiangmen Umicore Chancsun New Materials (JCU), Jiangmen Joint Venture (Umicore 60 %) Production Production of intermediate products containing cobalt, nickel and manganese for Li-ion batteries (MWh/yr) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Li-ion demand Portable electronics Power tools (P)HEV / EV Source: Takeshita Investment 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Greenfield investment 2009 Currently employs 100 people Investment aim Support the global growth of rechargeable battery materials Materials produced for local Chinese market as well as for Umicore Korea 19

Key issues for a materials technology company in China 20

Environmental, Health and Safety (EHS) protection Umicore applies STRICT EHS standards globally Due diligence: soil and groundwater analysis before any acquisition (company acquisition or additional land acquisition) Strict adherence to all regulations Focus on safety and occupational health of employees Umicore approach is supported by authorities (e.g. Foshan recycling) Chinese regulation trend Environmental protection more and more in the focus of local governments Local governments force closure of local polluting enterprises 21

Labour market Competition for talent Unemployment rate stable at 4.3% (even during worldwide crises) Staff turnover rate continuously at more than 13 % (Umicore 2009: 8%) Difficult to attract talent for remote locations Umicore has set up retention and career development plans Labor shortage (esp. workers) in some regions Second generation of migrant workers requests better living conditions Umicore has been investing heavily in training and development Significant salary increases Salary increase rate over the years: 8.0% + per year (dip in 2009: 6,9 %) 2009: 15 % increase of City lowest salary in Shanghai 22

Technology focus Umicore s focus in China is increasingly towards technology driven businesses: Automotive catalysts production Jewellery recycling Cathode precursor production Umicore has a majority shareholding or full ownership in all high technology businesses Intellectual property measures are in place 23

Umicore s China philosophy Section title slide Umicore Green 24

Umicore s China philosophy Business Unit approach Every Business Unit has an intimate knowledge of the Chinese market and a dedicated strategy in place Local Chinese production for local Chinese market Timing Be early mover but not too early Take measured steps HR Management Develop and keep talent pool Run business with Chinese management and Umicore Way Risk Management Consider and tackle IP risks carefully, but respect and take advantage of Chinese ingenuity Structure Local entities to be close and flexible to the market, supervised by Regional Headquarter Preference for combination of fully-owned entities and successful joint ventures 25

Umicore s China philosophy By following these principles, Umicore has become a market leader for: Automotive catalysts Rechargeable battery materials Cobalt powders Cobalt refining Zinc powders for primary batteries Fine zinc powders 26

Thank you Section title slide Umicore Blue 27