Toppledermøte NHO Østfold Per A. Sørlie President & CEO

Agenda Business model and strategy Innovation management Strategic priorities

 High value added through full raw materials utilisation  Borregaard’s biochemicals are sustainable and environmentally friendly substitutes to petrochemicals Sustainable biorefinery business model with strong value creation Borregaard is a global leader in biochemicals 3

Specialty celluloseLigninVanillinBioethanol Construction materials Cosmetics Food Tablets Paint/ varnish Filters Textiles Concrete additives Animal feed Agrochemicals Batteries Briquetting Soil Conditioner Food Perfumes Pharmaceuticals Pharmaceutical industry Bio Fuel Paint/ varnish Car care Integrated production system serving diverse markets Sustainable biorefinery business model with strong value creation Borregaard operates the world’s most advanced biorefinery Description Integration models  Own integrated  Partner integrated  Independent Revenue by end-market (2012) 4

Global niche player with market leading positions Global niche player with a market driven organisation Sales distribution (2012) Other Businesses (16% 1 ) Specialty Cellulose (41% 1 ) Performance Chemicals (43% 1 ) Technology leader and largest supplier of lignin-based products with global market access 2,3 Leading global specialty cellulose supplier 4, significant producer of 2 nd generation bioethanol 5 Only producer of wood-based vanillin; largest producer of C 3 aminodiols for X-ray contrast media 6 Note: 1. Segment revenue as a % of total revenue Management belief determined by customer and peer group analysis 3. World leader in wood based lignosulfonates 4. Among top 3 suppliers to customers that produce acetates, ethers and nitrocellulose based on company estimate 5. Based on company estimate 6. Based on volume of C3 aminodiols sold in USA/Canada: 17%, Rest of Americas 6% Market driven organisation ~100 FTEs strong sales/technical service organisation Dedicated sales force for each business unit ~90% of sales handled through own organisation 5 7

Robust financial performance Niche markets targeted Strategy Dual strategic focus drives performance Selected specialised market segments with diversified applications World leader in innovation and productivity 6

- Control centre Norway is a high cost location Continuous improvement, competence development and use of technology Increased competence + Use of technology and increased automation + Organisational development _________________________________________ = Lower costs and improved production Maintenance & environmental capex (mNOK) - Sarpsborg 7

Dual strategic focus secures high value creation Specialisation and innovation –Increased value added for existing production volume –New products with higher value Productivity improvements –Reduced work force –Stable fixed costs over time in operations –Increased production volumes Sales per employee in Norway (mNOK) 8

Agenda Business model and strategy Innovation management Strategic priorities

Innovation Management What is innovation? Innovation is the process of generating and implementing new ideas and solutions increasing the value added to our customers Innovation is the process of generating and implementing new ideas and solutions increasing the value added to our customers 10

Innovation Management Business driven innovation model Idea database Ideas from sales, technical application, R&D, production, external partners Innovation Management Teams (IMT) Inter disciplinary development work Scale-up and commercialisation IMT Chaired by head of business unit Cross functional team of line managers Gatekeepers at important milestones Co-work with: Universities Research institutes Consultants when required Co-work with: Customers when possible 11

Plan, accomplish and document projects defined and prioritised by the Innovation Management Teams (IMT) Plan, accomplish and document projects defined and prioritised by the Innovation Management Teams (IMT) Development of new –Processes –Products –Applications Optimisation of existing –Processes –Products –Applications Innovation Management Scope and priorities R&D Production Sales & marketing  Annual R&D and innovation spending approx. 4% of turnover  Short-term vs long-term projects 40/60  ~15% of Borregaard’s revenues come from new products  Annual R&D and innovation spending approx. 4% of turnover  Short-term vs long-term projects 40/60  ~15% of Borregaard’s revenues come from new products 12

Innovation Management R&D center in Norway – key figures and core competence Organic chemistry 13 Wood chemistry 9 Biopolymer chemistry 6 Physical chemistry 3 Analytical chemistry 2 Microbiology 4 Process technology 3 Number of employees80 Number of MSc 12 Number of PhD28 Pilot/demo plant personnel 20 Average experience (years)10 Female employees (%)40 Average age Flexible, experienced and competent Unique and strong competence platform Attractive working environment Specialists and generalists Benefitting from each others’ core competences

Several initiatives in place to drive long term growth and specialisation Increased sales of high-value lignin products Development of new cellulose specialities Further development of vanillin blends BALI – Strategic lignin raw material option Exilva - New Microfibrillar Cellulose product and Advanced Texture Systems 14

Agenda Business model and strategy Innovation management Strategic priorities

Borregaard portfolio - Strategic priorities Growth and specialisation within Performance Chemicals –Increased sales of high-value lignin products –Establish new lignin raw material sources –Develop BALI as a strategic lignin raw material option Develop the unique biorefinery assets in Sarpsborg –Leverage high value raw material base in Performance Chemicals –Continue specialisation of Specialty Cellulose, Bioethanol, Ingredients & Fine Chemicals –Strong focus on innovation and productivity efforts Establish Exilva as a new business area –Based on core competence within wood chemistry and fine chemistry –Increased specialisation through high value added 16