Chemical Companies Find New Opportunities by Helping the Automotive Industry Go Green, Says Frost & Sullivan

LONDON, August 3, 2010 - Chemical companies can do more to support the automotive industry in
going green whilst also opening new markets and sales channels for
themselves. According to Frost & Sullivan, huge opportunities exist for
chemical companies in the automotive sector as dramatic shifts in business
models occur and the types of vehicles being produced change. Electric
vehicles provide just one example of many new revenue streams available to
chemical companies this decade. However, chemical companies must develop
products for the unmet needs of automotive OEMs rather than simply pushing an
existing product in a new sector.

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Despite pressure to lighten vehicles in order to meet CO2 emissions
targets, metal remains the material of choice for automotive manufacturers,
not only because it is traditional and easy to work with, but also because it
may well be the best material to address increasingly stringent end of life
of vehicle (ELV) legislation. "Plastics and composites need to be greener,
more recyclable and sustainably sourced in order to meet future ELV targets
and escape fiscal penalties," states Frost & Sullivan's Global Programme
Manager for Transportation Chemicals, Robert Outram, in a new insight
entitled Frost & Sullivan: Green Materials in the Automotive Industry.
"Therefore, recycling, performance and sustainable production should be key
focus points of R&D programmes with clear objectives and targets based on
unmet needs."

To increase the uptake of non-metallic parts in vehicles, chemical
companies should be developing a strong, light and economically recyclable
product made from sustainable sources and doing more to specifically address
the needs of the automotive industry. "BMW's joint venture with SGL Group to
provide composites for its new electric vehicle fleet, Nissan starting its
own electric battery production for its UK electric vehicles plant and
Caterpillar producing its own line of hydraulic fluids for its plant vehicles
are recent examples of OEMs taking matters into their own hands because the
chemicals industry has failed to provide adequate materials for the
automotive industry to use in future vehicle projects," says Outram.

In addition to focusing more on innovation, the chemical industry needs
to collaborate more closely in order to secure favourable legislation and to
better educate the public and parliamentarians about the green aspects of
chemicals and materials, for example plastics incineration as an alternative
means of vehicle disposal. Chemical companies should consider pushing harder
for enforcement of ELV legislation and also for the automotive industry to be
subject to tight life cycle emissions measurements. After all, metal
production and processing is one of the most energy intense processes on the
planet.

Taking example from the agricultural sector, which has always dynamically
leveraged its environmental lobbying capabilities to shape markets, the
chemicals industry should lead from the front whilst lobbying about energy
generation and green practices to shape the industry in favour of its own
financial interest.

As the agriculture and chemical sectors begin to merge as sustainable
sources of feedstock are sought, much can be learnt from the agriculture
industry by the chemical companies. "Biodiesel production by big agricultural
companies, for instance, has enjoyed tax rebates and political support while
the oleochemical sector, which produces very similar fatty acid based
products from identical vegetable oil feedstocks, has never organised itself
properly to push for similar fiscal concessions based on green credentials,"
according to Outram.

To learn more about Frost & Sullivan's extensive research in this area
and obtain additional details about this insight, or if you would like to
speak with Robert Outram, please contact Monika Kwiecinska, Corporate
Communications, at monika.kwiecinska@frost.com with your full contact
details.

Automotive Lightweighting Consortium

Frost & Sullivan is bringing together key automotive manufacturers and
chemical & material companies via its Automotive Lightweighting Consortium
series. For more information on the consortium or information on the
Chemicals & Materials in Transportation research programme, please contact
+44-(0)-207-343-8308.

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    Contact:
    Monika Kwiecinska
    Corporate Communications - Europe
    P: +48-22-390-4127
    F: +48-22-390-4160
    E: monika.kwiecinska@frost.com

www.frost.com

Monika Kwiecinska, Frost & Sullivan, Corporate Communications - Europe, +48-22-390-4127, fax, +48-22-390-4160, monika.kwiecinska at frost.com