1 World Melamine Outlook and Applications Sebastian Bizzari Senior Consultant SRI Consulting November 17, 2010 Methanol Holdings (Trinidad) Limited Trinidad and Tobago, West Indies

2 © 2010 SRI Consulting Melamine Applications-Laminates Account for 51% of world melamine consumption in 2010 Manufactured by pressing paper or cloth saturated with resin under pressure and temperature onto a core layer; this is done under either high (HPL) or low (LPL) pressure Two main applications: conventional (80-85%) and flooring (15-20%) Laminate flooring used in residential applications (89%) Replacement market accounts for 69% New construction at 20% Commercial construction (retail, small office, healthcare and hospitality; 11%) Future demand largely affected by construction and remodeling activity New construction permits Sales of existing homes Urbanization Furniture production

3 © 2010 SRI Consulting Melamine Applications-Wood Adhesives Account for 23% of world melamine consumption in 2010 Used in plywood, particleboard, oriented strandboard (OSB) and medium-density fiberboard (MDF) for laminate flooring, subflooring, furniture, fire-resistant doors, roof decking, sporting goods and boats Melamine-modified resins can be either melamine added to UF resins, a mixture of MF and UF or PF resins, MUF or UMF Improve durability, moisture resistance of final woodboard, surface strength, fire retardancy and lower formaldehyde emissions Future demand largely affected by construction and remodeling activity New construction permits Sales of existing homes Furniture production Urbanization Stricter formaldehyde emission standards

4 © 2010 SRI Consulting Melamine Applications-Surface Coatings Account for 9% of world melamine consumption in 2010 Used in automotive coatings, coil coatings, metal containers, metal furniture, electric appliances and machinery Function as cross-linkers primarily with acrylic and polyester resins; minor applications in alkyd resins Automotive market; mostly OEM acrylic clearcoats, followed by acrylic basecoats and polyester primer-surfacers Automotive coatings account for most world consumption Future demand largely affected by OEM and automotive production Automobile production Light truck production Appliances Office furniture/commercial construction

5 © 2010 SRI Consulting Melamine Applications-Molding Compounds Account for 8% of world melamine consumption in 2010 Used in electrical applications (circuit breakers, junction boxes, wiring devices), cosmetic cases, dinnerware, buttons and appliance knobs and handles Possess excellent electrical and thermal properties, including resistance to boiling water Produced by compression or injection molding; can be easily decorated by color transfer or silk-screen methods Molding production largely located in Asia; low tech/cost Future demand largely affected by construction and discretionary income/personal spending Residential/commercial construction Remodeling activity Commercial construction Institutional activity-schools, cafeterias, hospitals Appliance production

6 © 2010 SRI Consulting Melamine Applications-Other Account for 9% of world melamine consumption in 2010 Paper/textile, FR, ceiling tiles, concrete superplasticizers, tire cord Paper treating Function as cross-linking agents in paper coatings to improve the wet-rub resistance of binder-pigment coatings Function as wet-strength resins to increase the ability of paper to hold together when wetted with water or exposed to humid or moist conditions Demand has declined in most regions Textile treating Improve crease-resistance, increase water repellency and provide dimensional stability Function as cross-linking agents with acrylic adhesives in nonwovens and latex backings Demand has declined in most regions due to replacement by glyoxal resins Flame retardants (FR) Functions as a flame retardant in 2 ways Used mainly in flexible polyurethane foams