Moderate growth expected in coming years / Manufacturers focus on Moderate growth expected in coming years / Manufacturers focus on Moderate

te growth expected in coming years / Manufacturers focus on Moderate growth expected in coming years / Manufacturers focus on
realignment and geographic expansion / Colorants and specialty products play realignment and geographic expansion / Colorants and specialty products play realignment and geographic expansion / Colorants and specialty products play realignment and geographic expansion / Colorants and specialty products play
a large role / AMI report on top 50 players a large role / AMI report on top 50 players a large role / AMI report on top 50 players a large role / AMI report on top 50 players
Although the medium-term prospects for Europes masterbatch industry are not exactly exciting, the market is
nevertheless expected to grow at a modest 2% per year in the near future. Europes masterbatch consumption
rose by an average 2% each year in the period from 2005-2010, reaching an overall market value of EUR 2.9
bn in 2010. In volume terms, eastern Europe and Russia are expected to see above average consumption
growth of about 2.5% a year, shoring up demand development for the entire continent. Given these prospects,
European masterbatch consumption is set to rise from its present 900,000 t to about 1m t by 2015, the latest
report by British market researcher Applied Market Information Applied Market Information Applied Market Information Applied Market Information (AMI, Bristol; www.amiplastics.com) has found.
Aside from overall market data and forecasts, Corporate performance and ownership among masterbatch
producers A review of Europe's 50 largest players also profiles Europes 50 leading masterbatch producers,
indicating key financial data, output figures as well as individual production portfolio.

Contrary to Asia, where masterbatch demand is set to see the worlds highest growth rates amid Chinas rapid
economic development (see also Plasteurope.com of 07.04.2010), Europes masterbatch industry is more
mature. Following a dramatic alignment as a result of the 2008/2009 financial crisis, at a time when European
producers were already grappling with lower growth rates, the situation has meanwhile calmed down, AMI
says. With no more room for consolidations, few players have entered the European masterbatch scene in
recent years and the M&A activities of existing producers have also abated.

The market researcher says this development is also reflected in its investigation of the continents top 50
players. There has been little change in the company landscape compared to its previous European
masterbatch report, published in 2007, AMI says. One of the new trends, however, is the rise in investments by
US companies, particularly in eastern Europe.



That is not to say, however, that the global masterbatch market has not experienced its fair share of turbulence
over the past few years, as a result of which many of the companies listed in AMIs report have significantly
altered both their market and product focus. Several leading players have significantly curtailed their European
activities, for example, a development often accompanied by site closures. Others have tried to encourage
long-term growth by enlarging their product portfolio and/or entering the new and larger markets in eastern
Europe or further afield. The economic uncertainty of the past few years has also resulted in significant
financial realignments, as some European masterbatch producers have seen their margins contract to the point
of threatening their very existence, while others seized the opportunities presented by just-in-time smaller
deliveries to improve both margins and profitability.
Colour masterbatches deliver most value Colour masterbatches deliver most value Colour masterbatches deliver most value Colour masterbatches deliver most value
In its study of Europes thermoplastic masterbatch market, AMI differentiates among black, white, colour and
additive masterbatches. The latter two are available either as resin, paste or powder. With an overall output of
about 1m t, Europes masterbatch market is equally divided among these four categories in volume terms, AMI
says, although in terms of value, colour masterbatches alone account for 40% of the total market value, while
the black alternatives account for the smallest market share.

AMIs latest report shows that market leaders A. Schulman A. Schulman A. Schulman A. Schulman (Europe: Kerpen-Sindorf / Germany;
www.aschulman.com) and Ampace Ampace Ampace Ampacet (Europe: Windhof / Luxembourg; www.ampacet.com), for instance, have
significantly enhanced their portfolio in the past few years, especially with regard to specialty colour
masterbatches. Further solidifying its European colour masterbatch business, A. Schulman in early February
announced its acquisition of Vita Group Vita Group Vita Group Vita Groups French colour masterbatch producer Elian Elian Elian Elian (Oyonnax; www.elian-
britishvita.com) see Plasteurope.com of 02.02.2012. According to company estimates, the purchase would
make it Frances third-largest colour masterbatch producer.

Other companies, including Israels Tosaf Tosaf Tosaf Tosaf (Afula; www.tosaf.com) or Plastika Kritis Plastika Kritis Plastika Kritis Plastika Kritis (Iraklion / Greece;
www.plastikakritis.com) have focused on expanding their sales activities in new markets. Tosafs portfolio, for
example, includes the entire masterbatch spectrum, from colorants to additives, flame retardants and UV-/light
stabilisers. In addition to the production site at company headquarters in Israel, Tosaf also operates plants in
Germany, the UK, The Netherlands, Ukraine and Turkey. Greeces Plastika Kritis, by contrast, has specialised
in colour masterbatches and additives for film applications. The Iraklion-based group has production plants in
Greece, Poland, Romania and Russia and also operates a Turkish subsidiary, Senkroma Senkroma Senkroma Senkroma (Istanbul;
www.senkroma.com.tr).

The black masterbatch market, which AMI calls truly European, underwent a number of changes in the wake of
the global financial crisis. Leading US producer Cabot Cabot Cabot Cabot (Boston, Massachussets; www.cabot-corp.com), for
instance, significantly restructured its European activities, including the closure of production sites in the UK
and Italy (see Plasteurope.com of 03.02.2009 and of 28.10.2010), choosing to focus its activities on the growth
markets in the Middle East and Asia instead. As several larger players withdrew from Europe, AMI says, new
opportunities arose for the independent sector, including British market researchers Hubron Hubron Hubron Hubron (Manchester;
www.hubron.com) and Polyplast Mller Polyplast Mller Polyplast Mller Polyplast Mller (PPM, Straelen / Germany; www.polyplast.com). Hubrons goal is to
extend its global distribution network from its HQ in Manchester, thereby significantly raising its export
activities. Germanys PPM is also active internationally, working together with North American masterbatch
supplier Colortech Colortech Colortech Colortech in both Canada and the US.

Faced with an ongoing tight titanium dioxide market, white masterbatch producers continue to feel the pressure
of rising raw material prices. It is against this backdrop that AMI predicts significant structural changes in this
sector. Leading European white masterbatch producers are A. Schulman and Ampacet.

Europes additive sector is particularly heterogeneous, not least because of the huge product variety in this
field. According to AMIs data, leading producers like A. Schulman and Ampacet were not the only players able
to expand their activities in the past few years. Several smaller companies turning out specialty grades were
also relatively successful. They include Ultrabatch Ultrabatch Ultrabatch Ultrabatch (Milan / Italy; www.ultrabatch.com), Argus Argus Argus Argus (Bren /
Germany; www.argus-additive.com) and Wells Plastics Wells Plastics Wells Plastics Wells Plastics (Stone / UK; www.wellsplastics.com) all companies
that were able to expand their market presence by specializing on flame retardants or antibacterial and
photodegradable additives.

Amid the difficult economic climate and the euro crisis, AMI predicts that most masterbatch producers will
continue to focus on realignment in the near future. Another ongoing trend is the investment in eastern Europe.
Attesting to the regions importance, for the first time in the series history, AMIs latest report also includes
Russian and Ukrainian masterbatch producers among the European top 50.

For more information, see Corporate performance and ownership among masterbatch producers A review of
Europe's 50 largest players", 3rd edition, AMI 2012, Details: www.amiplastics.com

Contact: Regine Futter, Tel: +44 117 9249-442, email: rfutter@amiplastics.com
23.03.2012