1. SAMSUNG HEAVY INDUSTRIES SAMSUNG Global Trend toward Protection of the Environment in Shipbuilding Industries October 16, 2010 Samsung Heavy Industries

2. SAMSUNG HEAVY INDUSTRIES Contents I. Background ; Trend of Environmental Protection II. Green Technology in Coating Material III. Solvent Free paint for Shipbuilding IV. Conclusion

3. SAMSUNG HEAVY INDUSTRIES Background Green ship Strategy by Samsung Green ship Strategy by Samsung Trend of Environmental Protection Trend of Environmental Protection SAMSUNG HEAVY INDUSTRIES

4. SAMSUNG Green house effect - Temperature increase caused by green house effect - Green house gas : H 2 O(Vapor), CO 2, CH 4, NO x, O 3, VOC Scheme of Greenhouse effectTemp. Increase (past 2000 years) Temp. Projection (next 100 years) *VOC : Volatile Organic Compound Global Warming

5. SAMSUNG HEAVY INDUSTRIES Climate change to be core issue in global government Green growth to be new paradigm of economic development International Environment Trend

6. SAMSUNG HEAVY INDUSTRIES Eco-Friendly Ships SHI to make Only Eco-Friendly Ships ; 30% Reduction in GHG Emissions - At its green management launch ceremony on January 28, SHI announced its intention to build only eco-friendly ships from 2015 - The Company announced various detailed goals, including the minimization of fuel consumption and greenhouse gas emission, and the maximization of energy efficiency Green Management

7. SAMSUNG HEAVY INDUSTRIES Vision of Green Management Eco-Friendly Ship Green Shipyard Green Network Shipowner Class Shipyard Maker

8. SAMSUNG HEAVY INDUSTRIES Technology for Eco-friendly ship Post treatment Technology Engine Technology Hull Form & Propulsion Technology Fuel Technology Electric Propulsion Technology Material Technology  Saver Fin - To control water flow and vibration around hull - Reduction of 2~3% ship fuel, - Reduction hull vibration max 70% Eco-Friendly ship Research of green technologies is being continued

9. SAMSUNG HEAVY INDUSTRIES VOC emission in Korea - Paint (Manufacture + Application) → 46.2% of Total emission Green Shipyard ※ Source : Korean national institute of Environmental research

10. SAMSUNG HEAVY INDUSTRIES VOC emission in Shipyard - Paint Application → 90.7% of Total VOC emission - Majority of VOC is emitted from Paint and Thinner Total VOC VOC from Paint Application 90.7% ※ Source : Samsung Heavy Industries Reduction of VOC in Paint Green Shipyard

11. SAMSUNG HEAVY INDUSTRIES Material Green ship Strategy by Samsung Green ship Strategy by Samsung Green technology in Coating Material Green technology in Coating Material SAMSUNG HEAVY INDUSTRIES Energy Saving Energy Saving Reduction of VOC Emission Reduction of VOC Emission

12. SAMSUNG HEAVY INDUSTRIES Green Technology in Coating material Energy Saving : Reduction of Fuel Consumption  Anti-fouling Paint Mechanism : Reduction of friction resistance by decreasing surface energy or surface roughness Material - Silicone - Fluoride - Carbon nano tube, etc Current Status - Some products have been already applied - Some are being researched  Heat Shielding Paint Mechanism : Decrease of surface temperature of exposed deck by reflecting sunray Advantage : Energy saving for air conditioning Current Status : Application on exposed deck is under consideration

13. SAMSUNG HEAVY INDUSTRIES Green Technology in Coating material Reduction of VOC emission High VOC (300~400g/L) Additional thinning VOC in paints VOC (g/L) Solvent BORNE Water BORNE Solvent FREE Water borne paint Solvent Borne Paint Solvent Free Paint Low VOC (below 2g/L) No thinning by plural component pump Low VOC (below 100g/L) No solvent thinning (using water) BeforeAfter - 36.7% Reduction of VOC emission by applying solvent free paint in shipyard ※ Source : Samsung Heavy Industries ※ Source : Product technical datasheet of paint manufacturers

14. SAMSUNG HEAVY INDUSTRIES History Green ship Strategy by Samsung Green ship Strategy by Samsung Solvent Free Paint for Shipbuilding Solvent Free Paint for Shipbuilding SAMSUNG HEAVY INDUSTRIES

15. SAMSUNG Solvent Free paint for Shipbuilding Limitation of water borne paint - Application of water borne paint is limited at low temperature - It is difficult to apply it at east Asian shipyards in winter Solvent free paint is better to apply History of Solvent free epoxy paint - Solvent borne epoxy paint has been used since 1940s - Solvent free epoxy paint existed from the late 1950s but sprayable paint was developed in 1970s - In 1990s, solvent free epoxy paint started to be used in shipbuilding industry - Currently, solvent free epoxy system is normally applied for fresh water tank in Korean shipyard

16. SAMSUNG HEAVY INDUSTRIES Solvent Free paint for Shipbuilding Application of solvent free paint worldwide - Solvent free paint has been used in many countries - Number of ships applied with the paint is getting increased every year Number of ships applied with Solvent Free paint ※ Source : Paint manufacturers  U.S. Navy - U.S. navy has been applied solvent free paint for water ballast tank of its ships - The application was well prepared and the paint was successfully applied ※ Source : The Journal of Protective Coatings and Linings

17. SAMSUNG HEAVY INDUSTRIES Green ship Strategy by Samsung Green ship Strategy by Samsung Conclusion SAMSUNG HEAVY INDUSTRIES

18. SAMSUNG Conclusion Eco-friendly ship  Energy saving - Anti-fouling paint - Heat shield paint Global trend is toward environmental protection Technology in shipbuilding is to be more eco-friendly Green technology in coating material is to contribute to greener shipbuilding  Reduction of VOC emission - Solvent free paint - Water borne paint Green shipyard

19. SAMSUNG HEAVY INDUSTRIES Conclusion For green future, Korean shipyards are to be more responsible to use environment friendly paints like solvent free paint. Therefore, it is going to be natural to increase the consumption of solvent free paint and to improve application technology for it including equipment, skill, etc accordingly

20. SAMSUNG HEAVY INDUSTRIES SAMSUNG Thank you Thank you