Enabling Downstream Sustainability through High Performance Adhesive Innovations

Xinyu Du, Ph.D.

November 12, 2014

©2014 H.B. Fuller Company

Agenda

1. H. B. Fuller’s Long standing Commitment to Sustainability

2. What is our Sustainability Strategy?

3. Enabling Downstream Sustainability through Adhesive Innovations

4. External Partnerships on Sustainability

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©2014 H.B. Fuller Company

H.B. Fuller Today

• A leading worldwide manufacturer and marketer of adhesives and other specialty chemicals• 2013 sales of $2.05 billion

• Publicly traded company listed on NYSE (FUL)

• 127 years of winning with customers• Clear focus on customer and market opportunities

• Enable innovation to improve customers’ products and consumers’ lives

• Strong partnerships with customers, suppliers, OEMs

• Global reach … Local expertise• Direct presence in 42 countries

• Customers in more than 100 geographic markets

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©2014 H.B. Fuller Company

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We recognize the world’s finite resources require us to minimize our impact on the environment while creating value for our customers.

Sustainability Commitment

Sustainability Background and Strategy

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©2014 H.B. Fuller Company

• Orginally, adhesive industry was very dependent on sustainable bio materials

• Petrochemical feedstocks use began in the mid 1900s

• Polymer chemistry developments

• Renewed interest in sustainable bio materials

• Envirnomental concerns

• High energy costs

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Derived from H. B. Fuller Company information

Sustainable Materials in Adhesives6

1887

1950

1975

2005

2014

2020

Esti

mat

ed %

Nat

ura

l So

urc

eR

aw M

ater

ials

?

©2014 H.B. Fuller Company

• 32 billion MT/yr - CO2 emissions from fossil fuels• Estimated to be < 5 %

refining/chemicals processing

• Estimated to be < 2 % plastics and rubber - substrates

• Estimated to be < 0.1% adhesive raw materials

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Adhesive Materials - Carbon Dioxide ImpactEl

ectr

icit

y

Ind

ust

rial

Tran

spo

rtat

ion

Fuel

Bu

ildin

g h

eati

ng

Rel

ativ

e C

O2

emis

sio

ns

Global CO2 emissions

Derived from

eia.gov data

©2014 H.B. Fuller Company

• Ethylene

• Propylene

• Butadiene

• Aromatics

• Isoprene

• Resin Oils

• Waxes

• Refined Oils

• Methanol

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1 -2 yearsCurrent 3 – 5 years

Supply/Demand

Balanced

Balanced - Tight

Tight

?

Petrochemical Feedstock Summary

©2014 H.B. Fuller Company

Sustainability Strategies

• Derived from 100% renewable “bio” sources / niche with no perceived performance and/or economic difference

• Petrochemical drop in: Bio ethylene or isoprene

• New materials: PLA

• Enabling Downstream Sustainability with “bio” and/or traditional materials• Increase customer efficiency, speed, lower energy

consumption and waste• Reduce amount of adhesive, substrate or energy

• Reduce environmental impact

• Supply stability and cost predictability

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©2014 H.B. Fuller Company

> 1:1 offset on

performance

Bio-based

1:1 offset

Less < 1:1 offset “Green” products

Sustainability Strategies10

Our primary aim is to develop sustainable products with

DIFFERENTIAL performance; bio-sourced nature of the products is

a nice-to-have vs. must have as long as sustainability goals over the

entire value chain are met

• Need Larger volumes in current markets

• Difficult for suppliers to make 100% “Bio” economically

• Slow market penetration

• Difficult sell when adhesive is minor component

• Can only compete in Niche Applications

• New materials with performance advantages

• Performance/Cost Balance

High Performance Adhesive Innovations Enabling Downstream Sustainability

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©2014 H.B. Fuller Company

Market Needs Ultimately Drive Innovation

• Innovation portfolio tied to market trends • Faster curing

• Improved safety

• Sustainability

• Improved mileage and line speeds

• Feedstock availability trends

• Composite materials

• Mechanical fastening elimination

• Multi-functionality

• Difficult substrates adhesion

• Non-traditional trigger cures

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©2014 H.B. Fuller Company

Enabling Total Solutions: Bio Content and Lower Energy Consumption

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Cool, Sustainable Application

Traditional Hot Melt Application

Adhesive System

• Market innovation:• Adhesive system

• Adhesive solution• > 40% renewable raw materials

• Up to 60% reduction in adhesive consumption

• Up to 75% less energy consumption

• Cooler is smarter

• Reduce equipment maintenance

• Easy clean up

• Up to 50% energy use reduction

• Cooler is safer• No heated tanks or hoses

©2014 H.B. Fuller Company

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• New Advantra True™ grades contain 40% renewable resources

• The first step on the journey to more sustainable hot melt adhesives

• Combine premium Advantra®

performance with sustainable resources

• Bio raw materials not food supply chain sourced

• Superior performance profile on wide range of substrates including new coated and lighter or recycled carton grades

• Achieve long-term savings with Advantra® technology

End of Line Packaging: Bio Content and Performance

©2014 H.B. Fuller Company

Enabling New Materials: Traditional Materials with Lower Energy and Higher speeds

• Challenge: Films safety and speed

• Market innovation: • Safe and faster processing

• Adhesive solution: • Solventless laminating adhesives

• Reactive adhesives through polymer innovation

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• Flextra Fast™ Solventless Laminating Adhesive

• Fast-curing next generation flexible packaging adhesive

• Up to 520 meters / min (1700 ft / min)

• Slit in as few as 3 hours

• Ship finished goods in as few as 2 days

• Lowest energy consumption process – solventless lamination

©2014 H.B. Fuller Company

• Liquid Separation Filter Assembly

• Up to 60% renewable content depending on grade

• Bio raw materials not food supply chain sourced – sustainability

• Enabling clean water

• Larger, more efficient filters

• Lower energy use filters

• Long life filters

• Better filtration - safer

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Enabling Water Purification: Bio Content, Lower Energy, More Efficient, Safer

Sustainability Partnerships

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©2014 H.B. Fuller Company

Key Sustainability Partnerships

Initiative Description

Bio-based polyols Utilize alternative sustainable

polyols as raw materials that have

performance advantages

Bio-based polymers Bio-based polymer(s) for hot melt

and reactive adhesives

Bio-based oil Use bio-based (vegetable) oils to

replace petroleum based oils in hot

melt adhesives

Rosin based

resins/plasticizers/oils

Utilize rosin based raw materials for

hot melt adhesives

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Sustainability Bio-Based Technology Platform Initiatives

Gro

wth

/ M

atu

rity

Starch

based

polymers

Sustainable

polymers

(University

sponsorships/

memberships)

Formulated

bio-based

packaging

adhesive

Rosin based

resins/plasticizers/oils

Terpene

based

resins

Bio-

based oil

Bio-based

polyols

Succinic

Acid

technology

Bio-based

tackifier

technolog

y

Life Cycle Analysis

Bio-based

polyesters

©2014 H.B. Fuller Company

In Summary

• Key to servicing our industry’s customers is to provide a

solution portfolio that encompasses - Enabling more sustainable, faster and leaner processes

- Bio and/or Petro sourced RMs meeting the value

proposition for market trends

- Supply availability / cost predictability

• Innovation can and will take multiple routes & will be

accelerated through strategic alliances and partnerships

across the value chain

• Key is performance and added downstream value in

sustainable operations

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This presentation is for informational purposes only and does not constitute an offer by H.B. Fuller to sell or a warranty of any kind.

Thank You!

Questions?

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©2014 H.B. Fuller Company