[PHOTO OF ROBERT I. HARRIES APPEARS HERE] Robert I. Harries
Vice President and General
Manager,
Industrial Chemicals Group
Industrial Chemicals
2000 Forecast
[PIE CHART]
Food & Transportation
21%
Industrial Chemicals
20%
$800M*
Specialty Chemicals
12%
Agricultural Products
18%
Energy Systems
28%
Total FMC Sales = $3.9 Billion
* Does not include Astaris sales
Industrial Chemicals
2000 Forecast
[PIE CHART]
Foret S.A. [Approximately 35%]
FMC U.S. Phosphorus [Approximately 10%]
Alkali [Approximately 35%]
Peroxygen [Approximately 20%]
Total Industrial Chemical Sales = $800 Million
* Does not include Astaris sales
FMC
Major Industries Served . . .
[PIE CHART]
Food All Other Glass Detergent Pulp & Paper Chemicals
7% 34% 12% 19% 8% 20%
Total Sales (including 50% of Astaris)
FMC
12% Glass PPG
LOF/Pilkington
St. Gobain/Ball Foster/Certainteed
19% Detergent Procter & Gamble
Lever/Unilever
Reckitt Benckiser
Colgate
8% Pulp & Paper Norske Skog
Stora Enso
Fort James
20% Chemical Dow
DuPont
OxyChem
7% Food Pillsbury
Nabisco
Pepsi
34% All Other Ashland
VWR
Industrial Chemicals
Segment Capital Employed
[PIE CHART]
Food and Transportation
15%
Industrial Chemicals
26%
Specialty Chemicals
23%
Agricultural Products
20%
Energy Systems
16%
Total September 2000 capital employed = $2.7 Billion
High volume products:
Shares
------
N. America Europe
---------- ------
- - Phosphates 55% 15%
- - Soda Ash 34% --
- - Hydrogen Peroxide 26% 10%
Niche positions:
- - Persulfates (world-wide)
- - Sulfur derivatives (Europe)
- - Specialty peroxide (Europe and U.S.)
- - Silicates and zeolites (Spain)
Industrial Chemicals
Segment Sales($M)
[Bar Graph A]
1,200
1,041.3
1,012.0
1,000 978.4
974.4
--
800
600
400
200
0
1996 1997 1998 1999 2000 Fcst*
*2000 Sales does not include Astaris
Segment EBIT($M)
[Bar Graph B]
200
181.8
150
144.4
135.7
117.5 --
100
50
0
1996 1997 1998 1999 2000 Fcst**
FMC
**2000 EBIT includes Astaris before interest expense.
------
Pressures on 2000 EBIT:
- - Unrecovered energy cost increases
- - Currency (Euro vs. U.S. $) movement
- - Step up in Consent Decree spending
- - One-time start-up costs in Astaris
Recent Actions:
- - Astaris JV (April 2000)
- - Texas Gulf (July 1999)
- - E-business
- - Sustainable improvements in cost structures
FMC
In 2001/02, we expect EBIT pick up:
- - Increased prices particularly in soda ash and hydrogen peroxide
- - Rationalization of phosphate chemicals capacity in Europe
- - Increased synergies (est. $15M per year) in Astaris
- - Containment (and potential reversal) of currency and energy impacts
Phosphate Chemicals
North American Phosphate Market:
Astaris Market
Share Size ($M) Major Uses
------- --------- ----------
Technical Phosphates 65% 285 Household cleaning
(including STPP) water treatment
Food Phosphates 50% 240 Bakery, meat, poultry
Phosphoric Acid 45% 200 Cleaning, beverages,
pet food
Phosphorus Pentasulfide 75% 50 Motor oil additives
Phosphorus Trichloride 50% 35 Plasticizers, flame
retardants
FMC
Astaris Restructuring:
- - New low-cost purified acid plant to start up by third quarter of 2001
- - Pocatello downsizing planned
- - Consent Decree commitments being met with completion targeted early 2002
FMC Phosphorus Chemicals (excluding Astaris)
Projected Environmental Impacts ($M)
Average
2000 2001 2002 2003-07
---- ---- ---- -------
Balance Sheet
- -------------
Consent Decree Capital 74 97 9 4
Remediation Spending 15 5 14 5
(previously reserved)
Income Statement
- ----------------
Consent Decree Expenses
(before tax)
Depreciation 5 8 14 17
Cash 15 18 12 1
FMC
European cost leader of tripolyphosphate (STPP) via:
- - Co-generation
- - Location on Mediterranean
- - Unique integration with acid produced with nearby raw materials
FMC
Soda Ash
Texas Gulf acquisition:
- Synergies
- Operational flexibility
- Capital requirements
- Raised FMC share to 34%
FMC
FMC lowest cost position:
- Scale and experience
- Mining methods
Wyoming Soda Ash Costs
. FMC Solution Mining
. FMC Longwall Mining
- Lower dependence on natural gas
- Premium on light/detergent ash
FMC
Demand for U.S. Soda Ash (M Tons)
(line graph)
1998 1999 2000 2001 2002
U.S. 7.2 7.1 7.2 7.2 7.2
ROW 0.9 0.9 0.7 0.8 0.9
Latin America 1.6 1.6 1.6 1.8 1.9
Asia 1.5 1.6 1.8 2.1 2.6
FMC
Soda Ash Supply/Demand (M Tons)
[Bar and line graph]
1998 1999 2000 2001 2002
Total Demand 11.2 11.2 11.3 11.9 12.6
FMC 2.7 3.4 4.0 4.0 4.0
TG Soda Acquisition 1.2
Others 9.3 8.3 8.4 8.0 8.8
Solvay Expansion 0.8 0.2
OCI Mothball 0.7 0.7 0.7 0.7
FMC Mothball 0.6 0.6 0.6
Solvay Mothball 0.4 0.4
Solvay expansion
American Soda Expansion 0.4
2002 - FMC 34% Capacity share
Capacity Utilization
Nameplate 81% 77% 77% 77% 80%
Effective 88% 87% 91% 93% 97%
FMC
Hydrogen Peroxide
Strong position
- - 26% share in North America and 10% in Europe
- - Geographic distribution of six plants
- - Process technology
- - Downstream and specialty positions
FMC
North American H2O2 Supply/Demand (M Lbs 100%)
[BAR AND LINE CHART]
1997 1998 1999 2000 2001 2002
Total Market Demand 1,191 1,230 1,355 1,470 1,550 1,600
FMC Capacity 420 370 305 370 420 435
Operating Capacity 1,035 1,262 1,179 1,179 1,179 1,289
Mothball, FMC 15 65 130 65 15 0
Mothball, Solvay 0 27 110 110 110 0
Demand = 7% CAGR
Capacity Share = 26%
Capacity Utilization
- --------------------
Nameplate 71% 79% 88% 91% 94%
Effective 80% 97% 103% 102% 99%
FMC
H2O2 Supply/Demand Balance (M Lbs 100%)
Europe
[BAR AND LINE CHART]
1998 1999 2000 2001 2002
Total Market Demand 1,827 1,849 1,933 2,020 2,101
FMC Capacity 212 212 212 212 249
Effective Capacity 1,894 2,147 2,314 2,423 2,423
Mothballs 110 0 0 0 0
Demand = 4% CAGR
Capacity share = 10%
Capacity Utilization
- --------------------
Nameplate 90% 85% 83% 83% 85%
Effective 95% 90% 88% 88% 90%
FMC
Industrial Chemicals Panel
Robert I. Harries Vice President and Group Manager
Industrial Chemicals Group
Alfredo Bernad Vice President and President Europe
FMC Foret S.A.
Daniel R. Summers General Manager
Chemical Products
Joseph A. Sipia General Manager
Alkali
Michael P. Smith General Manager
Active Oxidants
FMC