THE LATIN AMERICAN NONWOVEN MARKET – AN OVERVIEW

Rick JezziA.D. Jezzi & Associates, LLC April 25, 2013Miami, FL

Agenda

Latin American Demographics

Latin American Economics

Latin American Nonwoven Market

Trends, Opportunities and Challenges

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Demographics of Latin America

LATIN AMERICA•Mostly Spanish speaking except for:

•Brazil•Guyanas, Belize, some CaribbeanKEY GROUPS

•Andean Pact•Colombia, Venezuela, Ecuador, Peru, Bolivia

•Mercosur/Southern Cone•Brazil, Argentina, Paraguay, Uruguay•Chile

• NAFTA•Mexico, US, Canada

2012

3

Population‐ Latin America

REGION POPULATION

MEXICO 115

CARIBBEAN 44

CENTRALAMERICA 42

SOUTH AMERICA 395

TOTAL  596

115

42

44

42

10

201

17

47

15 629

3

28

Population: 596 Million :2012 Mexico

Central America

Caribbean

Argentina

Bolivia

Brazil

Chile

Colombia

Ecuador

Paraguay

Peru

Uruguay

VenezuelaPOPULATION GROWTH2012‐2017  ~ 1.0% CAGR

633 million by 2017

4

Population Demographics

Baby Population (0‐4) decreasing ‐1% Less influence of religious principles Wider birth control methods employed More working women

Women population (15‐49) increasing +1%

Adult Population ( 65+)  increasing +3.8%

5

Region Economic Distribution

8.9%

66.7%

24.4% EmergingDevelopingMature

2.2%

40.0%40.0%

17.8%Nascent

Emerging

Developing

Mature

2012                                                 

2017

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Nascent:       <$1,500Emerging:       $1500 ‐$12,499Developing:   $12,500‐$20,000Mature:        <$20,001

PPP/capita Comparison Americas

$49,000 

$41,100 

$7,591 

$11,816 

$12,304 

$14,800 

 $‐  $10,000 $20,000 $30,000 $40,000 $50,000 $60,000

USA

Canada

Central America

South America

Caribbean

Mexico

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KG/Cap of NW per PPP/cap

0

0.5

1

1.5

2

2.5

3

3.5

4

0 10000 20000 30000 40000 50000

KG/cap

PPP/cap

LA Region

8

Nonwoven Consumption in Latin America ‐ 2012

28.2%

4.2%

3.0%

37.5%

27.2%

64.7%

Mexico

Caribbean

Central America

South America

Brazil

Rest of SA

766,113 MTons/2012 growing to 1,014,925 MTons/2017~5.8% CAGR

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Ratio of Durable to Disposable

34.0%

66.0%

Mature Markets

DurableDisposable

70.8%

29.2%

Latin America

Durable

Disposable

Nonwoven

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POLYMER DISTRIBUTION IN LA

39.4%

36.7%

4.4%4.5%

5.6%4.2% 5.2%

Polypropylene

PET

Polyamides

Viscose

Cellulose

Others

Blends

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LATIN AMERICAN NONWOVEN MARKETS

23.4%1.6%

4.2%70.9%

HygieneWipesMedicalDurable

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Baby Diaper Market‐ SA Baby diaper market  growth in region 5.6 % cagr Nonwoven materials growth ~ 8.4 % cagr More diaper features utilize nonwoven materials ~ 5 year lag of feature development over mature markets

Many players in the entire region Every country enjoys share of regional suppliers

Consolidation is slowly occurring as market penetration increases

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Feminine Care Market‐SA

Leads market penetration of all three absorbent categories

Market growth projected also at  ~6.1% cagr for thru 2017

Fewer participants in category than diapers

Will achieve full penetration beginning in 2017 in a handful of countries in the region

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Adult Care Market ‐ SA

Still Embryonic

Growing at  ~10.2% cag per year through 2017 Demographics of aging population parallels that of other regions

Kimberly Clark and SCA have major share ownership in the region Many smaller suppliers emerging

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Disposable Wipe Market

•Pre‐Moistened Baby Wipe is still  Embryonic Market•Growing Rapidly ‐ ~ 10.5% cagr through 2017

•Lower basis weights than most mature markets•20 gsm•SMS and carded materials still used•Little or no airlaid•Local spunlace capacity in Brazil

•Household Wipes market still not much  penetrated

•Many suppliers

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Market Penetration by Categories for South American Region

Category Market Penetration‐2012

MarketPenetration‐2017

Feminine Care 67% 85%

Baby Diapers 53% 62%

Adult Incontinence 20% 27%

Baby Wipes 39% 62%

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Nonwoven Technology Distribution within Durable Nonwovens  (Metric Tons)

38.2%

4.5%

20.8%

30.0%

5.3% 0.2% 1.0%Needlepunched

Spunlaced

CardedThermobondedSpunbonded

Carded CBW

StitchBonded

Other

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Durable Nonwoven Market‐South America

Relatively large market 355 M MTons growing 

to 461 M Mtons ~ 5.4% cagr

Dominated by  needlepunchednonwoven

Much below the radar screen

Many vertically integrated companies

Key growth markets Filtration Automotive

5.0%

14.5%

8.3%

34.4%7.5%

9.8%

16.6%

4.0%

Automotive

Filtration

Geo/Agra/Const

Household&Food Stuff

Shoes

Apparel/Interlining

Home Furnishing

Packaging/Bags,CoatingSubstrate

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Major Regional Trends

Political Stability Economic Institutions Stabilizing Growth of the Middle Class Intra Regional Development Globalization and International Trade Development

20

Challenges Political

Changes in the political climate from left to right and back again will continue in various countries

Venezuelan government transition from Chavez to Maduro Should not decrease on‐going growth rates

Economical Historically an economic roller coaster, but continuing to tick up

Argentinian price freezes and inflation issues Brazil’s economy slowed down in 2012

Exchange rates have currently been stable but much volatile history precedes them

Vulnerability to international markets

Business Complexity in some Countries (i.e.Brazil) Tax system Logistics Cultural business practices

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Opportunities

Continuing Growth Market for next ~15 years or so Growth of Free Trade Agreements Opportunity in expansion of non‐woven supplier 

base and capacity both in Brazil and rest of South America

Introduction of air‐laid  nonwoven manufacturing in region

Growth over time in other wipe applications outside of hygiene

Base for renewable polymer usage and manufacture of renewable resource products

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New INDA Nonwoven StudyPublished in April, 2013 

Latin American Nonwovens Market 2012‐2017:

Forecast, Trends, and Analysis

A.D. Jezzi & Associates, LLC

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Rick JezziA.D. Jezzi & Associates, LLC169 Upland TerraceBala Cynwyd, PA 19004Tel: 1‐610‐202‐2374 24