1. The European glycerine market and its future ICIS-LOR World Oleochemicals Conference 13 th October 2003, Amsterdam Victoria Vandeputte Category Manager Glycerine

2. GLOBAL VIEW ON GLYCERINE Biodiesel disturbs the global volume balance The effect on glycerine prices is global The import/export dynamics are changing

3. A history of global balance now disturbed Data: Industry Source

4. The price history over the same period shows a structural decrease! Courtesy of ICIS LOR

5. Biodiesel in Europe hits the glycerine prices globally! Courtesy of ICIS LOR

6. The price impact is significant Major impact on price 25 - 50% decrease in global spot prices Prices in Europe lower than in Asia 2003 20-30 k tes more glycerine = 15% of the Biodiesel capacity 35 - 40% of the time the Biodiesel capacity is not utilized !

7. Biodiesel changes the dynamics of import and export x Data: Industry Source

8. ZOOMING IN ON EUROPE Biodiesel drives growth in glycerine production Biodiesel will grow further Three major questions: 1.Who will refine extra glycerine ? 2.Who will consume extra glycerine ? 3.Who will pay for the revenue loss ?

9. Biodiesel drives the growth in glycerine production in Europe ! Glycerine Sources Data: Industry Source

10. The actual production varies with the Biodiesel economics! 45 to 70% occupancy depending on: Revenue 1.Mineral diesel price 2.Glycerine price Variable cost 1.Raw material price 2.National fuel tax Gross Margin

11. Despite variable profit, significant further growth is expected! Data: Industry Source

12. Growth estimates based on raw material availability Biodiesel will not be made from Rapeseed Oil only! Growth estimates based on availability of “cheap” raw materials If produced from Rapeseed Oil Biodiesel requires 2.5 M hectares more 60% of today’s plantings

13. Question 1. Who will refine the surge in glycerine? Data: Industry Source + 150 k tes

14. Oleochemical producers will grow refining capacity ! Oleochemical Industry owns 85% of the refining capacity De-bottlenecking is the cheapest source of refining capacity! Differentiating factors Refining Knowhow Marketing expertise Global sales force Oleochemical Industry will expand refining capacity !

15. Question 2. Who will use this glycerine glut? Data: Industry Source + 280 k tes

16. Glycerine is used in a big number of very diverse applications Data: Industry Source

17. Glycerine will find its way in the substitution of other polyols!

18. The glycerine price level is an opportunity for purchasers! * Courtesy of ICIS LOR

19. Glycerine price level will be lower ! This is not a temporary price decrease Glycerine demand is price-elastic 300 k tes more Biodiesel glycerine expected + 60-130 k tes glycerine p.a. from Biodiesel since 1997 - 300 USD / te

20. Europe will be looking for export regions Data Source: CEH Product Review

21. Question 3. Who will pay for the revenue loss? Earnings on Fatty Acids & Fatty Alcohols must increase ! - 22.5 Million EUR !! Impact of 300 EUR/te* decrease in contract prices between Q2 and Q3 2003 Profitability of Oleochemical Industry is unsustainably low ! *Courtesy of ICIS LOR

22. The oleochemical industry cannot absorb the value loss of glycerine *Courtesy of ICIS LOR

23. The glycerine future in a crystal ball Glycerine market in turmoil 1.Adequate refining capacity! 2.Increased outlets for glycerine! Economic Safe & Versatile 3.Higher prices for co-products!