Bioplastics what’s really going on in the market ?

1. Bioplastics what’s really going on in the market ?

2. NatureWorks & Ingeo “rethink what you think you know …” Steve Davies June 20, 2014 NatureWorks LLC www.natureworksllc.com

3. “rethink what you think you know …” • about the industry • about feedstocks • about capacity and expansion plans • about cost • about performance • about applications • about ….

4. Who we are • World’s first and largest bioplastics producer • World-scale plastics facility • 2002 Winner - Presidential • Green Chemistry Challenge • Proprietary portfolio of Ingeo bio-polymers & intermediates • Peer reviewed, strong eco-profile • Global customer base and product adaption • Ingeo applications breadth across markets, geographies, and retail applications

5. Three Era’s of Bioplastics Norming & Performing Forming Storming • Biobased = exception • Litter focused • Carbon footprintfocus • Biobased = expectation • Performance is king • “biodegradable” where it’s the highest good “Bioplastics are for Biodegrading” “Bioplastics sequesterCarbon” “Bioplastics = Plastics” 1990’s 2000’s 2010’s

6. Rethink what you think: about feedstocks …

7. CO CO 2 2 CO CO CO 2 2 2 NatureWorks is in the business of turning greenhouse gases into performance products Additives (Modifiers) Adhesives Coatings Intermediates Printing Toners Specialty Lactates Surfactants Resins

8. CO CO 2 2 CO CO CO 2 2 2 NatureWorks is in the business of turning greenhouse gases into performance products Additives (Modifiers) Adhesives Coatings Intermediates CO2+ H2O Printing Toners 1st GenerationAg feedstocks are a short termBridging Tool Specialty Lactates Surfactants Resins Plant Sugars Plants Manufacture

9. We are committed to feedstock diversification: Performance materials made by transforming whatever are the right, abundant, local resources Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio. GENERATION I: 1st step • Q-2, 2013 • NatureWorks Nebraska facility expansion • From 140,000 to 150,000 ton/year nameplate capacity Where we are today Dextrose from corn starch “Bridging Crop”

10. We are committed to feedstock diversification: Performance materials made by transforming whatever are the right, abundant, local resources Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio. GENERATION I: 1st step GENERATION I: 2nd step NatureWorks Awards Contract for Front End Engineering of Its New Ingeo™ Production Facility MINNETONKA, Minn., Sept 24, 2013 “NatureWorks announced today that Jacobs (NYSE:JEC) Engineering Group has been awarded the engineering design contract for the company’s next world-scale Ingeo™ production plant in Southeast Asia …” Where we are today Dextrose from corn starch “Bridging Crops” Where we are going now Sucrose from locally abundant materials such as sugar cane

11. We are committed to feedstock diversification: Performance materials made by transforming whatever are the right, abundant, local resources Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio. GENERATION I: 1st step GENERATION I: 2nd step GENERATION II GENERATION NEXT Where we are today Dextrose from corn starch “Bridging Crops” Where we are going now Sucrose from locally abundant materials such as sugar cane Next 3-5 years Lignocellulosics: Sugars from bagasse, wood chips, switch grass or straw. And next? CO2 to lactic acid technology? CH4 to lactic acid technology?

12. We are committed to feedstock diversification: Performance materials made by transforming whatever are the right, abundant, local resources Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio. GENERATION NEXT Q2-2013 Long Term R&D Partnership Established And next? CO2 to lactic acid technology? CH4 to lactic acid technology? …

13. From Methane to Ingeo Methanotrophs convert methane into lactic acid through fermentation It starts with Methane 2 1 Methane is supplied directly to specialized bacteria called methanotrophs NatureWorks converts lactic acid monomers to long polymer chains making a family of Ingeobioplastics 3

14. 2 - 3 December 2014, Haus der Technik, Essen, Germany Industry Wide Engagement

15. Certification Tools for Ingeo Biopolymers 1 BIOBASED CARBON CERTIFICATION Verifies that 100% of carbon in Ingeo comes from renewable ag resources via USDA BioPreferred in the US & Vincotte in Europe. 4 FEEDSTOCK SOURCING CERTIFICATION Non-GM corn volume equivalent to a customer’s needs is purchased by NatureWorks and added to the stream entering the corn wet mill. 2 GENESCAN CERTIFICATION Ingeo is certified to be free of any genetic material by EurofinsGenescan. 5 ISCC PLUS & FEEDSTOCK SOURCING A combination of NatureWorks’ Feedstock Sourcing Certification and the ISCC PLUS program. 3 6 WORKING LANDSCAPE CERTIFICATES 3rd party (IATP) certifies both sustainable agricultural production and the use of a non-genetically modified crop. ISCC PLUS 3rd party (ISCC) certifies the sustainable production of renewable raw materials including chain of custody.

16. We are committed to feedstock diversification: Performance materials made by transforming whatever are the right, abundant, local resources Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio. GENERATION I: 1st step GENERATION I: 2nd step GENERATION II GENERATION NEXT Where we are today Dextrose from corn starch “Bridging Crops” Where we are going now Sucrose from locally abundant materials such as sugar cane Next 3-5 years Lignocellulosics: Sugars from bagasse, wood chips, switch grass or straw. And next? CO2 to lactic acid technology? CH4 to lactic acid technology?

17. What can you get from one bushel (56 lb) of corn? “It’s not Food OrBioplastic” “It’s Food And Bioplastic” Food sources corn oil, and animal feed products such as gluten feed, and gluten meal co-exist with the starch end uses, regardless of whether or not that starch is used to make materials like Ingeo. The US uses one billion lbs of starch in corrugated paper every year. Source: National Corn Growers Association's 2008 World of Corn Report

18. Rethink what you think: about price, product, and market applications …

19. What it’s all about “The 3 P’s” Properties Price Preferences • Broad and adjustable physical property set Sugars vs oil Favorable yields, Economies of scale Feedstock hedging capabilities Cradle to cradle economics • Lower carbon footprint and energy usage • Renewable feedstock • Health Concerns • BPA free • Phthalates free • Acrylonitrile free

20. comparative cost stability

21. “Cheap shale gas gives impetus to bioplastics growthMakers of chemicals and plastics from plant matter are emerging as unlikely beneficiaries of the abundance of U.S. shale gas, which is shaking up the global petrochemical industry. The shale gas boom means energy companies in the United States are boosting their capacity to turn cheap gas into ethylene, a basic hydrocarbon used to make solvents, plastics and detergents…. More complex hydrocarbons derived from crude oil, however, are becoming more expensive and their supply more volatile, adding urgency to a drive by specialty chemical companies to make everyday materials such as synthetic rubber, insulation foam and diaper absorbents from plant matter…. But more than half of what naphtha crackers churn out is ethylene. When the product is made more cheaply elsewhere, cracking naphtha becomes a less profitable business…. . This environment is likely also to be supportive of renewable chemistry economics," they added.” Ludwig Burger, Reuters, FRANKFURT | Fri Dec 7, 2012

22. PET/PS/Ingeo Feedstock Cost Comparison PET Above lines, Ingeo wins PS MaterialIndifference Curve Below lines, PET/PS wins PET Analysis from McKinsey margin models, CMAI, February 2006

23. PET/PS/Ingeo Feedstock Cost Comparison • For Example • When sugar cost ~$.17/lb, the cost of feedstock per lb of Ingeo is the same as the cost of feedstock per lb of PS when oil is ~$50/barrel • OPEX and CAPEX are similar. • The rest is scale… Above lines, Ingeo wins PS Below lines, PS wins Cellulosic sugars Gen 3 sugars PET Analysis from McKinsey margin models, CMAI, February 2006

24. Clarifying Sugar to Polymer Yields

25. Rethink what you think: about properties & performance …

26. Where we are in the Market Rigids Food Serviceware Films Nonwovens / Fibers Durables Lactides Bus. Dev.

28. Performance features depend on application Rigids Food Serviceware Films Nonwovens / Fibers Durables • Key Properties • Range of melting points/crystallinity levels • Tunable hydrolysis • Hydrophilic / moisture wicking • Inherent odor resistance • UV resistance • Low bonding temp • Key Properties • Stiffness • Gloss, transparency • Printability • Weight reduction (vs. PET) • Key Properties • Stiffness • Miscibility • Improved flow • Chemical resistance • Key Properties • Stiffness • Compostability • High versatility for injection, extrusion and coating processes • Key Properties • Stiffness • High gloss and transparency • Dead fold / twist retention • Grease, oil and aroma barriers • Chemical resistance • High throughput

29. 2012 Design Table – 15 Distinct Ingeo Grades Extrusion Grades Increasing Molecular Weight Fiber and Injection Molding Grades Varying Lactic Acid co-monomer ratio

30. 2013 Expanded Design Table – 21 Ingeo Grades Extrusion Grades Increasing Molecular Weight Fiber and Injection Molding Grades Varying Lactic Acid co-monomer ratio

31. Improved Stiffness for Heat Resistant Ingeo Parts

32. With related reduction in the manufacturing time required to produce the heat resistance part … Existing Ingeo Grades Decreasing Cycle Time New High Productivity Ingeo Grades:~ 70% shorter cycle times Temperature

33. Rethink what you think: about applications & markets …

34. What it’s all about “The 3 P’s” Properties Price Preferences • Broad and adjustable physical property set Sugars vs oil Favorable yields, Economies of scale Feedstock hedging capabilities Cradle to cradle economics • Lower carbon footprint and energy usage • Renewable feedstock • Health Concerns • BPA free • Phthalates free • Acrylonitrile free

35. Innovation in Form-Fill-Seal Packaging

36. Danone’sStonyfield - in their own words: “IMPACT OF INGEO CONVERSION” Environmental • Carbon savings • 75% reduction in CO2 emissions • Equivalent to 1,320 MT CO2/year savings • Ingeo out performs polystyrene • Stronger/less breakage • Better lid adherence • Lower temperature filling (less energy use) • Maintained line speed and shelf life • Addresses consumer concerns • Well received by key opinion leaders • Reduction in human toxicity • Did NOT increase our retail price Performance Consumer& Cost Stonyfield CEO Gary_Hirschberg, Innovation Takes Root Conference Keynote: “Inventing a WIN-­WIN-­WIN-­WIN-­WIN FUTURE”, February 21, 2012

37. 3D Printing

38. Improving Plexiglas PMMA Impact Performance with Ingeo Impact performance comparable to PETG and PC PC --------------- Acrylic / Ingeo Alloys ----------- PETG Acrylic Source: Altuglas International a subsidiary of Arkema International

39. In Food Service, Ingeo provides a tool for organics diversion

42. Ingeo Sunshades www.revolution-fabrics.com/index_en.html

43. Rethink what you think: About market presence

44. Market Presence 2005 – 2013 Footprint in the market 1 Billion lb Milestone Sales CAGR: 24% aggregate volume in the marketas of 2013

45. Market Presence – in the bigger picture Market Presence 2005 – 2013 Footprint in the market Today Poised for Strong Growth Operations Established 1 Billion lb Milestone Startup & Market Seeding Technology & Intellectual Property Established Sales CAGR: 24% Sales CAGR: 24% aggregate volume in the marketas of 2013 1990-2001 2002-2005 2006-2013 2014 - forward Expanding customer & product base. Plant 2 2006 - 24/7 Blair operations at Blair 2013 – 150k ton expansion 4k -8k mt pilot plant 2002 -140k mt facility @ Blair. 2003 -largest lactic acid plant Milestones

46. Rethink what you think: About end-of-life …

47. Global-scale adoption: Where are we geographically

48. Global-scale adoption: Where are we geographically “What is the right end-of-life”

49. Global-scale adoption: Where are we geographically With this breadth or products & Geographies - for us, it’s about being cognizant of all relevant end-of-life opportunities, for all applications, in all geographies we sell into . . .

50. How we look at things . . .