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Battery Council International

Battery Council International. Dan Langdon President East Penn Manufacturing Co., Inc. Current President BCI. Agenda. Regulatory Legislation Global Implications Election Year Implications North America Industrial Battery Forecast & Data North America SLI Battery Forecast & Marketing Data

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Battery Council International

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  1. Battery Council International Dan LangdonPresident East Penn Manufacturing Co., Inc.Current President BCI

  2. Agenda • Regulatory Legislation • Global Implications • Election Year Implications • North America Industrial Battery Forecast & Data • North America SLI Battery Forecast & Marketing Data • Effects on Distributors • Battery Council International

  3. Regulatory Legislation

  4. Now with Ohio: Pb Battery Recycling Laws - April 2008 Recycling Laws BCI Model Disposal Ban

  5. Recycling • 97% of all battery lead is recycled • Compared to: • 55% of aluminum soft drink and beer cans • 45% of newspapers • 26% of glass bottles • 26% of tires

  6. Recycling • The typical new lead-acid battery contains 60 to 80 percent recycled lead and plastic.

  7. Air Transportation Safety • Continues to be a concern • FAA now has 95 “incidents” on its list • Biggest focus is lithium/lithium ions • Most recent incident involved nonspillable lead-acid batteries shipped by manufacturer • Average FAA penalty now $80,000 • New battery transportation rule to be proposed this summer

  8. National Ambient Air Quality Standard for Lead (NAAQS) • 1976 – Lead added to list of criteria pollutants • 1978 – Primary and secondary NAAQS set • 1.5 µg/m3, quarterly average • May 2008 – Proposed revision rule due • September 2008 – Final rule • September 2011 – States must amend their regulations (SIPs). This probably means new permit restrictions.

  9. Change in Emissions Sources • 2002 National Emissions Inventory (NEI) • ~1700 tons lead emitted per year • From >12,000 point sources plus non-point, mobile • NEI does NOT include near-roadway resuspension of soils/dust that may contain historically deposited lead • California study suggests this may contribute up to 8 times the emissions from stationary & mobile sources combined

  10. Aviation Fuel 392 Utility Boilers 221 Industrial/ Comm /Institutional Boilers & Process Heaters 191 Iron and Steel Foundries 110 Primary Lead Smelting 59 Secondary Lead Smelting 46 Mining 38 Military Installations 33 Municipal Waste Combustors 33 Electric Arc Furnaces (EAF) 32 Integrated Iron & Steel Mfg. 32 Pressed & Blown Glass & Glassware Mfg. 32 Lead Acid Battery Mfg. 25 Secondary Nonferrous Metals 23 Hazardous Waste Incineration 22 Total (Includes Categories Not Listed Above) 1640 Emissions Sources

  11. Climate Change Regulation • Potentially the biggest Federal regulatory program since the New Deal • “Cap and Trade” bills would require major emitters (factories) of greenhouse gases to obtain allowances • All electricity prices will go up … a lot • May encourage off-shore production

  12. Global Implications

  13. Global Implications • European union directives on recycling • Registration, Evaluation and Authorization of Chemicals (REACH) • Proof for demonstration for safe use of chemicals • Continued consolidation in all segments of the channel everywhere • Rising cost of raw materials • Cost of inventory ties up our capital • A global economy-outsourcing to China, India and even Vietnam

  14. China Issues • Higher cost of oil feeds inflation in China - up to 15% annually • Prices rising from much higher shipping rates • Cost of sending a 40 foot container from China to the US West Coast soared 150% to $5,500 since 2000 (Source: CIBC World Markets)

  15. China Issues • The shift back to the US has started • The weaker dollar has made our products more attractive • Little value in having millions of dollars in inventory sitting in the middle of the Pacific Ocean • China elimination of VAT Refund is leveling the playing field

  16. Election Year Implications

  17. From BCI Perspective • Little real progress in Congress in 2008 • Many oversight hearings • Few policy-oriented policymakers • Increase in legislation and regulation - particularly in the environment

  18. Election Outcome Implications • Climate change legislation by Nov. 2009 • Lieberman-Warner (originally called McCain-Lieberman) bill • Other environmental and occupational health initiatives by mid-year • Basel ratification/TSCA amendments • E-waste mandate (new RCRA recycling title?) • Limitation on imports from some countries • Lead paint in housing legislation

  19. Election Outcome Implications • OSHA lead standard in 2010 or 2011 • Imitation of European Union Directives by 2011

  20. What About the Candidates • Both candidates favor environmental protection • Offshore and Alaska drilling will be major issue • Vagueness about environmental issues other than climate change • Obama offers specifics including emphasis on lead poisoning of children • Transition papers and appointments will be key

  21. 111th Congress Could Be Huge • Climate change legislation • Additional EPA regulation • Securities/Banking legislation • Federal regulation of insurance industry • Restrictive trade legislation

  22. North America Industrial Battery Forecast & Data Presented by Bob Cullen Vice President, Sales & Marketing Battery Products, Hollingsworth & Vose Company at BCI’s Annual Convention.

  23. 2007 Industrial Battery Sales By Market Class ($ Millions) $751Motive 50.2% 49.8% $744 Stationary Total: $1.49 Billion Source: Battery Council International

  24. Industrial Battery Trends Actual 2007 Industrial Truck Forecast 2008 $ (millions) 8% (4%) Source: Battery Council International

  25. U.S. Motive Power Trends • Fork Lifts • Battery Market increased by 8%; (20% due to lead) • 2007/8 Equipment spending slows dramatically • US Economy becoming a Service vs. Manufacturing Society

  26. U.S. Motive Power Trends • Forklifts (cont’d) • US Warehouses need more Forklifts than Manufacturing plants • Overall Market Conditions • Replacement market is helping • 2008 expected to be a down year

  27. Industrial Battery Market Summary • Motive Power • Actual Motive Power increased sales by 8% in 2007- down 6-8% when Lead prices deducted • Motive forecasted to decrease by (4%) in 2008 • BCI Forecast - Motive down (9%)

  28. North America SLI Battery Forecast & Marketing Data

  29. Adjusted for non-reporting companies,includes additional sales & export shipments North America SLI Shipments • = Source: Battery Council International

  30. OE SLI Battery Market U.S. / North American OE Battery Shipments Source: Battery Council International

  31. Replacement SLI Battery Market U.S. / North American Replacement Battery Shipments Source: Battery Council International

  32. North American SLI Battery Shipments Percentage Percent of Total Source: Battery Council International

  33. North American SLI Battery Forecast Source: Battery Council International - Daramic Staff

  34. North American SLI BatteryForecast Percent Change 6.0% 0.2% 1.0% 4.5% -1.8% 2.0% FORCAST CAGR 2008-2012 OE: 0.4%, Replacement: 1.7% Total: 1.5% Source: Battery Council International

  35. 2007 SLI Replacement Shipments by Segments Source: Battery Council International

  36. SLI Battery Shipment Trends by Application CAGR 2001–07 OEM Replacement Light Vehicle -2.3% 0.1% Heavy Duty -3.3% 5.2% General Utility -4.9% 1.6% Golf Car/ Floor Scrubber 4.1% 7.8% Marine/RV 1.3% 3.1% Motorcycle/ PowerSport* 10.6% 10.7% Total 0.1% 1.7% *2004–07, no earlier data Source: Battery Council International

  37. SLI Replacement Shipmentsby Channel of Distribution 2007 Source: Battery Council International

  38. The Top Five Reasons for Purchasing Particular Battery Brand Name Lowest Price Performance Claims Recommendations Other Does not total to 100% due to multiple answers Source: Aftermarket Business June 2008 issue

  39. Size of the Automotive Aftermarket (Values in Millions of Consumer Dollars) Figures represent consumer expenditures in current retail dollars (i.e., inflation added) and do not include warranty work. * 3.9%CompoundedAnnualGrowth Rate Source: AAIA - 2008

  40. Installing The Battery DIY - 48% DIFM - 52% Aftermarket Business 5th Annual Consumer Attitude Study June 2001 DIY - 55% DIFM - 45% Aftermarket Business 12th Annual Consumer Attitude Study June 2008

  41. US Trade Data Lead-Acid Batteries Source: US ITC Trade Data Web, downloaded 27Mar08

  42. US Vehicles Scrappage Rates 2007 Total scrappage rate at 5.2% *GVW 1-8 Source; 2007 R.L. Polk & Co.

  43. Median Age of U.S. Carsand Light Trucks In 2007, the percentage of the car population 11 years of age and older was 41.3%, compared to 40.9% in 2006. For light trucks, this percentage was 29.5% in 2007 and 29.2% in 2006. **GVW 1-3 Source; 2007 R.L. Polk & Co.

  44. Age of Vehicle When Purchasing A Battery Source: Aftermarket Business June 2008 issue

  45. U.S. Vehicle Registration Millions Source; 2007 R.L. Polk & Co.

  46. Hybrid RegisteredVehicle Information Source; 2007 R.L. Polk & Co.

  47. Hybrid Vehicle Registration Market Share by OE Manufacturer Source; 2007 R.L. Polk & Co.

  48. Number of Hybrid VehicleLaunches by Nameplate Source; 2007 R.L. Polk & Co.

  49. HEVs and Functions (Hybrid Electric Vehicle)

  50. ALABC Project - UltraBattery Achieved 100k miles Driving without Conditioning charge @ Jan.15, 2008, Similar performance with Ni-MH Module Drivability, Durability, Fuel Economy, CO2 Emission

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