No Slide Title - Umicore

Advanced
Materials
Picture of clean room
with wafer

Advanced Materials:
A diversified and international portfolio
Engineered Metal
Powders
EMP
Olen (Belgium)
Overpelt (Belgium)
Fort Saskatchewan (Canada)
Laurinburg (USA)
Shanghai (China)
Ganzhou (China)
Specialty Oxides
and Chemicals
SOC
Olen (Belgium)
Roodepoort (S. Africa)
Subic (Philippines)
Arab (USA)
Chonan (S. Korea)
Business Group Advanced
Materials
People: 1200 (*)
(*) worldwide without synthetic diamond
Electro-Optic
Materials
EOM
Olen (Belgium)
Quapaw (USA)
Boston (USA)
Dundee (Scotland)
Stevenage (UK)
Rennes (France)
40 %
Synthetic Diamond
People: 1670
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A strategy based on core competences:
Closed loop approach
Security of
supply
Engineered
metals
and
materials
Full service
to the customers
Recycling
3

Engineered Metal Powders

Engineered Metal Powders:
Hard metal and diamond tools
• Cobalt and cobalt-based alloyed powders are used as a binder in the
production of hard metals and diamond tools.
• The world market of binder materials is estimated at 6,000 MT/y with a
value of €250-300m (basis 2002)
10 %
90 %
33 %
67 %
Cobalt and alloys Cu,Ni,Fe,Bronze Hard Metals Diamond Tools
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Engineered Metal Powders:
Umicore is world leader in cobalt and cobalt alloys
ETP (France)
7%
OSRAM (USA)
3%
HCST (GER.)
6%
Other
18%
OMG (USA)
24%
Umicore
42%
Umicore
OMG (USA)
HCST (GER.)
OSRAM (USA)
ETP (France)
Other
6

Engineered Metal Powders:
Markets and Trends
Hard Metals:
• 40-45% market share
• AAGR 3 - 6%
• Market trends
• replacement of High Speed Steel Tools
• more complex high precision tools with need for spherical powders
Diamond Tools
• 60-65% market share
• AAGR 5 - 7%
• Market trends
• use of alloyed powders instead of 100% cobalt
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Engineered Metal Powders:
Primary Batteries
• Umicore is the world leader in zinc and zinc-alloyed powders
for alkaline batteries
11%
11%
19%
29%
30%
Estimated market shares
Umicore
Duracell (USA)
Big River (USA)
Mitsui (Japan)
Others
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Primary Batteries:
Expansion in China expected to continue
Sales Volumes (MT/y)
8000
7000
6000
5000
4000
3000
2000
1000
0
2002 2003 2004 2005 2006
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Specialty Oxides and Chemicals

Specialty Oxides and Chemicals:
Rechargeable batteries
• Rechargeable batteries in the portable market:
• Ni-Cd: earliest portable cell technology
• Ni-MH: Nickel Metal Hydride
• Li-Ion (LIB)
• Li-Ion polymer (LIP)
• Umicore focused on the most advanced system,
Lithium Ion, but also has an entry into Ni-MH with its
Chinese Nickel Hydroxide production base
• Umicore produces Cobalt Oxide (Olen, Belgium) and
Lithium Cobalt Oxide (Cheonan, South Korea) used as
active material for Lithium Ion batteries
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Rechargeable batteries:
Back on a growth track
Total sales of cell suppliers(US$ Million)
6000
5000
4000
3000
2000
1000
0
1985
1987
1989
1991
AAGR 13%
1993
1995
1997
1999
2001
12/17% growth
2003
LIP
Li-ion
NiMH
NiCd
12

demand(M cells/year, IIT)
Two applications dominate the market of Lithium-ion
batteries
1800
1600
1400
1200
1000
800
600
400
200
0
2000
2001
2002
2003
2004f
Others
Cellular Phones
Notebook PC
13

Battery industry consolidation: towards 5-6 players?
(Forecast Q4/04)
Cylindrical cells (18650)
• capital-intensive automated plants
(high tech producers only)
• Mostly used in notebooks
• ~16 g cathode material per cell
Prismatic cells:
• high performance cells produced in
Japan/Korea, low end in China
• Consolidation will be driven by
downstream integration (captive
users) and cost
• Mostly used in cell phones
• ~7 g cathode material per cell
Sony Matsushita Sanyo Sanyo GS
NEC Maxell BYD LG Chem
Samsung E-One Others Lishen
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Umicore’s strategy
• Maintain world leadership in Cobalt Oxide
precursors, supplying in-house Lithium Cobalt
Oxide production and Japanese competitors
• Focus Umicore own Lithium Cobalt Oxide
sales on fast growing South Korean battery
producers
• Develop next generation materials for Lithium
Ion batteries
• Nickel-Cobalt-Manganese based
• Metal Phosphate based
• Be present in new applications (Hybrid
Vehicles, Portable tools)
a
b
a
(001) (011)
(010)
c
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a
b

Rechargeable batteries:
Umicore Korea is growing fast - from #7 to #2 in the world
MT LiCoO2/m
Lithium Cobalt Oxide production (MT/m)
300
250
200
150
100
50
0
Q1/01
Q2/01
Q3/01
Q4/01
Q1/02
Q2/02
Q3/02
Q4/02
Q1/03
Q2/03
Q3/03
Q4/03
Q1/04
Q2/04f
Q3/04f
Q4/04f
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Major challenges
• Production of Lithium Cobalt Oxide powders with
stringent functional specifications (energy, power,
cycle life, …)
• Kaizen: continuous quality improvement
• Development of compounds with reduced Cobalt
content due to the high and volatile price of Cobalt
• Production of these powders with cost efficient
processes. Process development is one of the
core competences of Umicore
• Fast expansion to follow customer growth, without
quality compromises.
c hex.
a hex.
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Li
O
Co

Almost one out of two Lithium-ion batteries
contain Umicore’s cathode material
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Specialty Oxides and Chemicals
• Besides the rechargeable
battery application,
Umicore offers a portfolio
of products for a wide
range of markets
• Major composing elements
are Cobalt, Nickel and
Manganese
• Steady growth specifically
in the markets for catalysts
Cobalt (mt)
2,500
2,000
1,500
1,000
500
0
Sales of Cobalt
2000 2001 2002 2003 2004F
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Other
Animal Feed
Electronics
Carboxylates
Plating
Catalysts
Pigments

Umicore
Electro-Optic Materials

Electro-Optic Materials
Sales portfolio 2003 - Revenues Worldwide
Infrared Optics
44%
Optical Fibers
22%
North America
44%
Substrates
34%
Africa / Middle
East
2%
Asia/Australia
14%
Europe
40%
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Optical Fibers:
Recovery has started
Umicore is world leader for high
quality GeCl4 (a key element in the
production of optical fibers) and is
well placed to benefit from the future
upturn.
Soaring Internet usage has fueled the development and installation of efficient
optical fiber connections over long distances as well as the connections to
office and in the near future to our private homes.
Overestimation of the short and medium term needs by network providers has
created huge over-capacity, leading to a collapse in fiber optics demand in
2002
Recovery is expected but will take some time
120
100
80
60
40
20
0
Fiber Demand (Million km )
1998 1999 2000 2001 2002 2003 2004
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Million USD
3000
2500
2000
1500
1000
500
0
Infrared (IR) Optics
A key element in industry and our daily life
World wide commercial IR imaging
equipment needs
1999 2000 2001 2002 2003 2004 2005
IR imaging-uncooled IR imaging-cooled
• Night vision systems
The ability to see in the dark and through fog and smoke
creates a multitude of opportunities in safety-and medical
applications.
Products : Germanium lenses
• Low cost night vision systems have been
developed for cars to enhance visibility in
bad weather conditions
• Umicore decided to build the first plant for
the production of lens systems for
automotive applications in the USA
(Quapaw, Oklahoma)
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Umicore produces lenses and assemblies
based on Infra-red transparent materials
Extraction of metals
Ge, Se, Te, ...
Purification
of metals
Production of
infra-red glasses
Ge-Se-Sb
Ge-Se-As
Anti-reflection and
protective coatings
Assemblies
Customer
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Automotive night vision
The picture seen shows the temperature difference
Hot objects are brighter than cold objects
25

Substrates for space solar cells
• One of the key components of a satellite is
the solar panel
• Due to launch, space and weight
restrictions, high efficiency solar cells are
required
• Germanium based solar cells offer the best
solution
• Besides scientific and military applications,
satellites are more and more used for data
transfer
• Spin-offs of this technology are taking off
(Light Emitting Diodes) and under
development (electronics)
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European Space Agency (ESA):
a long term partner
• The collaboration with ESA started in 1993
• Since then 12 joint projects have been funded
• Total investment of the projects by ESA: +/- €25m
Flexible 100 micron Ge-substrate
27

High efficiency Ge-based solar cells are key elements of
success in recent Mars explorations
Spirit Rover Odyssey Orbiter
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Synthetic Diamond

Synthetic Diamond
• Joint venture between Sibeka* and Element Six (formerly De Beers Industrial
Diamonds) for production of synthetic diamond and other related products
• Industrial operations in Ireland, Sweden, South Africa and United Kingdom
• Growing market but intense competitive pricing environment
• Restructuring programme implemented
• Commoditized production moved to low cost locations
*80% owned by Umicore and 20% by De Beers
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Synthetic Diamond
• Synthetic diamonds are used for cutting,
grinding and drilling tools and are also a
major application for Umicore’s cobalt
powders.
• Megapode’s products include:
• Synthetic diamond grit, cubic boron
nitrate (especially for cutting of nonferrous
metals), poly-crystaline
products for high precision drilling
tools and general cutting.
• Tool parts and inserts: cemented
carbides combined with diamonds.
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Innovation

Innovation - a key process for growth
• Besides the development of the Business Units in their
respective areas, Umicore supports a number of new initiatives
through its in-house innovation programme “Umagine” and a
Venture Unit.
• Major projects are focused around:
• Nickel based powders for electronics
• recycling of rechargeable batteries
• nano-scale engineered oxides for selected applications
• fuel cells
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Fuel cells: solutions for a clean tomorrow
• Energy in the 21 st century must
come from limitless and clean
sources such as water, solar,
wind, … to avoid depletion of
energy resources. Hydrogen is
the ideal clean energy carrier
• Fuel cells are expected to play a
key role in this new energy
supply strategy
• Umicore is well placed to be a
leading contributor in the
development and industrial
implementation of fuel cells
A car with 100% clean emission
Who‘s going to swallow that?
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Manufacturing and supply chain
PRECIOUS
METALS BASED
CATALYSTS
MEMBRANES
MEMBRANE
ELECTRODE
ASSEMBLY MEA
Umicore has developed 3 branded
products :
• Protonics : fuel reforming catalyst
• Elyst : fuel cell catalyst
FUEL CELL
ASSEMBLY
• pMembrain : a membrane coated
with a catalyst such as Elyst
Umicore products
Reformed fuel
or
HYDROGEN
EQUIPMENT
MARKET
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Potential in Mio kW
Fuel cell markets
250
0
250
25
2.5
Power Generators
Hydrogen Buses
Stationary
Consumer Electronics
Automotive
2000 2015+
Commercialization
Automotive:
-drivetrain
- APU (auxiliary power unit)
Stationary:
- power supply
- CHP (cogeneration of heat
and power)
Portable:
- power generators
- Premium laptop batteries
Premium:
- reliable (back-up) power
- military
Test fleets
Demo projects
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Forward looking statements
This presentation contains forward-looking information that involves risks
and uncertainties, including statements about Umicore’s plans,
objectives, expectations and intentions. Readers are cautioned that
forward-looking statements include known and unknown risks and are
subject to significant business, economic and competitive uncertainties
and contingencies, many of which are beyond the control of Umicore.
Should one or more of these risks, uncertainties or contingencies
materialize, or should any underlying assumptions prove incorrect,
actual results could vary materially from those anticipated, expected,
estimated or projected. As a result, neither Umicore nor any other
person assumes any responsibility for the accuracy of these forwardlooking
statements.
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