Presentation Outline

1. Chemical Substance Controls Updates in the U.S.Japan Dyestuff & Industrial Chemicals AssociationApril 22, 2009Bill Allmond, Vice PresidentSOCMAWashington, DC USA

2. Presentation Outline Historic SOCMA Update Updates on U.S. Chemicals Policy Toxic Substances Control Act (TSCA) The New Obama Presidency & Chemical Industry Policy How U.S. Companies are Faring in the Global Economic Downturn

3. Historic SOCMA Update

4. SOCMA Name Change For 88 years, we have been known as the Synthetic Organic Chemical Manufacturers Association (SOCMA). Last month, our membership voted to change our name to the Society of Chemical Manufacturers & Affiliates (SOCMA). New name better reflects our membership It also broadens the appeal of SOCMA to companies not involved in the production of synthetic or organic chemicals. Our primary focus will remain on servicing the custom, batch, and specialty manufacturing industry.

5. Updates on U.S. Chemicals Policy

6. TSCA Modification Engaging in discussions with EPA & U.S. Congress on modifications to TSCA. Monitoring developments under Europe’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Advocating continuance of EPA’s Chemical Assessment and Management Program (ChAMP) EPA’s Commitment under Security and Prosperity Partnership (SPP)

7. Latest in Washington on TSCA Reform Lots of discussion on chemicals policy, namely TSCA. Congressional hearing on TSCA reform in February. More hearings by Congress to come. SOCMA testified and advocated: Fuller implementation of existing TSCA authority Some modification supported Careful consideration of any proposed changes on U.S. business

8. Update on U.S. Chemicals Policy North American Cooperation on Chemicals Management under the Security and Prosperity Partnership (SPP) Trilateral agreement to enhance regulatory cooperation among Canada, Mexico, and U.S. Accelerate and improve effectiveness of actions to safeguard health and environment Facilitate sharing of data and knowledge Provide cost-effectiveness for business and government Retain national regulatory authority

9. Update on U.S. Chemicals Policy ChAMP is the U.S.’s specific commitment to North American chemical policy. It is a U.S. strategy to broaden existing TSCA authority & is a response to EU’s REACH.

10. Update on U.S. Chemicals Policy ChAMP By the end of 2012: Assess and initiate needed action on the over 6,750 existing chemicals produced above 25,000 lbs/yr the U.S. Includes High Production Volume (HPV) and Moderate Production Volume (MPV) chemicals Make and publicly release screening level decisions and initiate needed action

11. Update on U.S. Chemicals Policy ChAMP The program builds off of: HPV Challenge Program Data Information collected under the Inventory Update Rule (IUR) Canadian categorization and other international efforts

12. Status on ChAMP To date the EPA has developed and posted: Risk-based prioritizations for 220 HPV chemicals and has Hazard-based prioritizations for 83 chemicals More prioritizations to come Enhancements recently proposed

13. Inorganic HPV Challenge Recently announced as an enhancement to ChAMP. The most recent Inventory Update Rule (IUR) of 2006 required reporting of inorganics. Hopes to launch this program in Fall of 2009.

14. Resetting the TSCA Inventory Recently announced as another enhancement to ChAMP. Over 80,000 Chemicals currently on TSCA Inventory. This number does not reflect chemicals in commerce. Intended to more accurately reflect chemicals actually in commerce and eliminate chemicals not in commerce.

15. Section §5(b)(4) “Risk List” Possible ChAMP enhancement. Chemicals that “may present an unreasonable risk” would be considered for inclusion on the list. The hope is to provide more incentive for stewardship.

16. SOCMA’s Role SOCMA Board recently approved a formal TSCA position. SOCMA testified before Congress in February. SOCMA providing key Congressional players with background on TSCA. Industry working toward consensus position.

17. SOCMA’s Position Provides stance in key areas of chemical policy Prioritization of chemicals Safety Standard Safety Assessment Exposure/Use information Data Requirements Confidential Business Information State Government Role States Roles

18. SOCMA’s Testimony to Congress Highlighted certain areas of TSCA that could be improved. Encouraged leveraging of international efforts. Against a REACH-like policy. Noted the potential for negative consequences of any comprehensive changes to TSCA.

19. The New Obama Presidency& Chemical Industry Policy

20. Obama Administration Environment Will be more focused on regulating chemical risks & less on supporting voluntary programs. New climate change legislation may also be supported. Security Supporting legislation that would demand product substitution as a security measure vs protecting against existing inventories & assets on-site at the facility.

21. How SOCMA’s Chemical Manufacturers Are Faring in the Global Economic Downturn

22. U.S. Companies & Global Economic Downturn Most chemical companies are faring ok. Smaller companies are faring better than larger ones. These companies have low inventories & lower staff overhead than large companies. These companies also do not rely as much on the availability of credit to meet payroll or expand their businesses. Companies servicing the automotive & plastics industries are not doing well.

23. Price of oil/natural gas State of the US economy Competition from emerging mrkts. State of overall chemical industry State of the world economy Number of new chemical entities Low Impact Medium Impact High Impact 2007 Survey 2008 Survey 2006 Survey Impact of Outside Factors on the Chemical Industry Q.10 Rate the level of impact (high, medium, low) each of the following factors had on your business in (2007/2006/2005)?

24. Expected Change in Company Sales by the end of 2009 Expected Change in Company Sales by the end of 2009 Net “expect an increase in sales”: 2008 Survey = 61% 2007 Survey = 88% 2006 Survey = 94% Net “expect a decrease in sales”: 2008 Survey = 27% 2007 Survey = 7% 2006 Survey = 5% 2008 Survey 2007 Survey 2006 Survey Q.19 How do you expect your company’s sales to change by the end of (2009/2008/2007)?

25. 2009 2007 Survey 2006 Survey 2008 Survey State of the US economy State of the world economy Expected Impact of Outside Factors on the Chemical Industry by the End of 2009 State of overall chemical industry Competition from emerging mrkts. Price of oil/natural gas Number of new chemical entities High Impact Medium Impact Low Impact Q.20 Please rate the level of impact (high, medium, low) that you think each of the following factors will have on your business by the end of (2009/2008/2007)?

26. 2006 Survey 2007 Survey 2008 Survey Approaches Companies will Employ to Achieve Profit Growth Through ‘09 (Ranked in Top 3 Approaches) New product introduction Process improvement Offer broader process technologies Reduce administrative/ sales costs Product improvement Adding me-too products Abandon non-core tech/products offerings Grow through acquisition Misc. other Q.21 Thinking ahead through (2009/2008/2007), please rank the top 3 approaches that your company will employ to achieve profit growth.

27. Thank You!