1. -1- Adhesive Market Report of Mainland China Michael Yang Secretary General of CNAIA Oct. 28, 2011, The Lalu

2. -2- 1. Current Status 2. Application Market Situation 3. Existing Problems 4. Future Development Focus Oct. 28, 2011, The Lalu

3. -3- 1. Current Status The output of A & S in Mainland China in 2010 was 4.628 million tons, while the sales volume reached 58.73 billion RMB, increasing 14.27% and 11.65% respectively comparing with those of 2009 (not inclusive of UF, PF and MF). Oct. 28, 2011, The Lalu

4. -4- (million tons) (Year) 14.27% Output of A & S in Mainland China During 2006-2010 Oct. 28, 2011, The Lalu

5. -5- (Year) (billion RMB) 11.65% Sales Volume of A & S in Mainland China During 2006-2010 Oct. 28, 2011, The Lalu

6. -6- Output and Sales Volume of UF, PF and MF in Mainland China in 2010 UFPFMF Total Output (1,000 tons) 7,8004932888,581 Sales Volume (billion RMB) 50.75.432.8859.01 Oct. 28, 2011, The Lalu

7. -7- Type of Adhesive Name of Adhesive Year of 2010 Output (1,000 tons) Sales Volume (billion RMB) Water- based Adhesive PAE Emulsion 1,690 PVAc Emulsion 720 VAE Emulsion 360 PU Emulsion 28 CR Emulsion 2 Total 2,80020.56 Solvent- based Adhesive SBS Resin 187 CR 165 PA 152 Total 5048.37 Classification of A & S in Mainland China in 2010 Oct. 28, 2011, The Lalu

8. Type of Adhesive Name of Adhesive Year of 2010 Output (1,000 tons) Sales Volume (billion RMB) Hot Melt Adhesive EVA Resin 216 Synthetic Rubber 154 Others 60 Total 4307.35 Reactive Adhesive PU 476 Epoxy 105 Cyanoacrylate 19.8 Modified Acrylate 8.0 Anaerobic 2.8 Total 61215.08 Others Silicone 261 Polysulfide 21 Total 2827.37 Classification of A & S in Mainland China in 2010

9. -9- Output Proportion of A & S in Mainland China in 2010 Oct. 28, 2011, The Lalu

10. -10- (billion M 2 ) (Year) 8.8% Output of PSA Products in Mainland China During 2007-2010 Oct. 28, 2011, The Lalu

11. -11- (Year) (billion RMB) 13.9% Sales Volume of PSA Products in Mainland China During 2007-2010 Oct. 28, 2011, The Lalu

12. -12- Adhesives I & E Volume by Mainland China During 2006-2010 (1,000 tons) (Year) Oct. 28, 2011, The Lalu

13. -13- Adhesives I & E Value by Mainland China During 2006-2010 (Year) (billion USD) Oct. 28, 2011, The Lalu

14. -14- 2. Application Market Situation The largest consumption of A & S in Mainland China was for construction, building and decoration industries, accounting for 27%. Packaging & label and wood works rank the second. The fastest growth was in assembly and transportation, increasing 36.63% and 32.38%, respectively. Oct. 28, 2011, The Lalu

15. -15- Adhesives Market Share in Mainland China in 2010 Oct. 28, 2011, The Lalu

16. -16- 3. Existing Problems 1. Low grade and poor quality stability of products 2. Inadequate innovation ability 3. Shortage of high-skilled talents 4. Outstanding environmental problems 5. Relatively low industry concentration 6. Low degree of internationalization Oct. 28, 2011, The Lalu

17. -17- 4. Future Development Focus 1. Emerging industries are still booming. Wind power, solar energy, aviation and space, new energy automobile, high-speed railway and rail traffic, etc. Oct. 28, 2011, The Lalu

18. -18- Examples Adhesive for wind power generation Adhesive for solar energy generation Adhesive for aviation and space industries Adhesive for light-weight autos Adhesive for composite plastic packaging materials Adhesive for energy-saving building Adhesive for water-treatment equipment Oct. 28, 2011, The Lalu

19. -19- 2. Vigorously promote energy-saving and environmental protection products. Water-borne CR, PU and epoxy adhesive High solid content, solvent-free, one-component, UV curing adhesive Oct. 28, 2011, The Lalu

20. -20- 3. Focus on the development of HMA and HMPSA. 4. Develop urgently high quality and high performance adhesives (e.g. modified, reactive, nano-type, specialty and multi-functions). Oct. 28, 2011, The Lalu

21. -21- China National Adhesives Industry Association (CNAIA) Address: Room C-204, No. 19, Dongsanhuan South Road, Beijing 100021 Phone: +86-10-8766 7165 Fax: +86-10-8766 3015 E-mail: yang@cnaia.org http: // www.cnaia.org Thank You for Your Attention Oct. 28, 2011, The Lalu