3 June 2015
Westlake Chemical Corporation Presentation_
Deutsche Bank 6th Annual Global Industrials and
Basic Materials Conference
James Chao, Chairman of the Board Albert Chao, CEO
Westlake Chemical Net Income 2014 = USD 667 million
Westlake Chemical Net Sales 2014 = USD 4,491 million
Westlake Chemical's Strategic Investment drives EBITDA growth
* Timely investments to integrate the full value chain drive EBITDA
* Vinnolit's specialty PVC production provides profitable growth
Higher Cycle Average Margins Focus on “Bottom Line”
Westlake Chemical higher margins and returns attributable to
* Focused growth
* Asset quality
* Operating rate advantage
* Chain integration
* Product mix
* Feedstock
Westlake Chemical Strong value creation and profitable growth
Highly integrated chain in the U.S. enhances margin stability
Westlake Chemical feedstock advantage
Ethane & NGL Feedstock flexibility
Well positioned to take advantage of ethane and other NGL’s:
• Westlake ethylene plants are fully capable to use ethane
and have some NGL flexibility
• Lake Charles ethylene plants are able to access ethane
from basins and shale plays with Eagle Ford, Permian,
Rockies, Marcellus and Utica
• Calvert City ethylene plant is now receiving ethane from the
Marcellus and Utica basins
• Westlake’s European business (Vinnolit) purchases
ethylene which is naphtha based and provides further
feedstock diversification
Assets Well Positioned “Ethane & NGL Advantage"
• Supply of natural gas and NGLs have risen dramatically
from shale and tight rock formations in the US
driving down natural gas and ethane prices domestically
• NGL production has increased in
almost all the basins and shale plays with Bakken,
EagleFord, Permian, Rockies and Marcellus
being a few of the most prolific NGL producing regions
• US ethane fractionation capacity has risen
in response to increasing NGL production
creating a domestic supply surplus
Advantaged Product Mix :
Westlake’s Unique LDPE Focus
LDPE Is More Profitable
Focus on Desirable LDPE Products
Autoclave reactors are among the largest & newest in North America
Low Cost Producer of PVC Due to High Integration
• Majority of Chloro-vinyls margin captured in chlor-alkali
and ethylene
• Resin production generates small portion of total integrated
margin
• Most producers are integrated into chlor-alkali, not ethylene
• In North America, only Westlake in the USA and Formosa
are integrated into both and as a result enjoy strong margins
• Integration has historically allowed Westlake to operate its
chloro-vinyls plants at higher operating rates than
US industry average
• Through backward integration into chlor-alkali
(shale gas based power) and ethylene (shale gas based ethane),
Westlake is one of the lowest cost producers globally
• Able to export cost competitive PVC, minimizing exposure to
domestic housing cycle
Westlake is the Global Leader in Specialty PVC
Westlake’s acquisition of Vinnolit provides:
• Specialty PVC which enhances Westlake’s product suite
• Better margins and reduced volatility
• Improved distributions, especially to emerging markets
Westlake Chemical's key Drivers for Future Earnings Growth
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