CONFIDENTIAL FIGURE

Appendix 1 Organization Chart of DSM Venturing & Business Development

CONFIDENTIAL FIGURE

Appendix 2 Overview of project scoring tool at Gate 2 (Screening note is a simplified version)

CONFIDENTIAL FIGURE

0 ,0 0 0 ,1 0 0 ,2 0 0 ,3 0 0 ,4 0 0 ,5 0 0 ,6 0 0 ,7 0 0 ,8 0 0 ,9 0 1 ,0 0 T e c hn ic a l V alue

C om m e rc ial V a lu e

T e c h n ic al Prob a bility o f S u c c es s

C o m m erc ia l Prob a bility o f S u c c es s M a na g em en t T ea m

Fit w ith D S M T e ch n o lo g y :

O vera ll G rad e : 3 ,8 3

CONFIDENTIAL FIGURE

Name of project: 0 Unlimited.DSM

Commercial Attractiveness

Technical Atrtractiveness

High

Low

Low High Market/ Application

Technology/ Product

Current New to the world

Current New to DSM New to world

New to DSM

Probability of success

Commercial Value

Low High

Low High Technology Attractiveness

Fit

Hig

Low

Low High

Reject License/ Sell

JV/ Spin out V&BD BG

Appendix 3 Interview scheme

What are the methods used for the prioritization of projects at DSM V&BD?

What is the experience of DSM V&BD with ranking tools and the other methods used?

Is the DVBD ranking tool currently used generically?

Are there shortcomings?

Is the total decision process for prioritisation of projects/ ideas good enough?

Advantages (strengths) Shortcomings (weaknesses)

Are these ranking tools worth the time and effort? (long term vs. short term)

Which role play group processes/ politics during decision processes for prioritisation of projects/ ideas?

(positive vs. negative)

Which dimension(s) is (are) most important for prioritisation of projects and why?

Gut Feeling

Financial forecasting: reward vs. risk Market attractiveness

Leverage of core competences Technical feasibility

Product & Competitive advantage Strategy fit

Phase of development Other

What is your ideal ranking process?

What should be the ideal situation?

What is (are) the major/ most important difference with current situation?

Appendix 4 Relative ranking ALLINCO-tree

The four product/application possibilities had the numbering:

Acid scavenger (NewA)

Acid scavenger (NewA), other application Reactive fluor additive (NewF)

12. Dual cure resins Self crosslinkable resins

The group of experts had to the score the product/ application possibilities on the following scale:

Most interesting

Might be interesting, but much more information is needed Not interesting

The average scores of the experts on each product/ application possibility was averaged and the PAP 's were relatively ranked. It can be seen that NewA is regarded to be the most interesting of the whole ALLINCO-tree. NewF, has also a high score but more information was needed. It can be seen that the other two product/ application possibilities are regarded to be not so interesting.

Relative Ranking

1

1,2

1,4

1,6

1,8

2

2,2

2,4

2,6

2,8

3

1 2 10 14 5 6 3 9 15 4 7 18 8 12 13 16 19 11 21 22 20 17

Idea nr.

Ranking range

Average Ranking T. Loontjens Ranking

Appendix 5 Hydrolytic decomposition of a polyester

Hydrolytic decomposition of a polyester:

O O O

O O H2O/ H+ O O

( )

( )

n

O OH

O O

O OH

O O

( )

n

n

( )

n

Appendix 6 The five forces analysis of Porter for the carbodiimide acid scavenger market

Power of Suppliers

As the supply of raw materials is mainly captive, the power of the raw material suppliers is regarded as low.

Power of end-users

There are few suppliers of anti hydrolysis agents and, in theory; all polyesters suffer from a low hydrolytic stability. In production processes with postcondensation processes the concentration of acid groups in the polymer, which causes the instability, is kept as low as possibleError! Bookmark not defined.. In the cases where this is not totally sufficient or very good hydrolytic stability s demanded, the producers of polyesters are forced to apply an anti hydrolysis agent. They put up with the disadvantages of the conventional products, but actual customers are willing to evaluate alternative additives like NewA. Concluding, the power of end-users is low.

Threat of entrants

Due to the existence of intrinsic disadvantages of the conventional products and the fact that actual customers are positive to evaluating alternatives makes that the threat of entrants is regarded as high. However, in mature industries specific knowledge and market relationships are vital for an entrant.

Threat of substitutes

The substitute for anti hydrolysis agents is postcondensation processes in which the concentration of acid groups is kept as low as possible. Threat of other substitutes is low.

Internal Rivalry

There are two dominant suppliers of anti hydrolysis agents, Rhein Chemie and Raschig.

Their products are based both on carbodiimide chemistry. In theory, a high concentration means that the rivalry decreases. Rhein Chemie with its Stabaxol is the leading supplier, but Raschig wants to increase its market share with their relatively new Stabilisator range.

Therefore, the internal rivalry is categorized as medium, because there is not much product

differentiation and thus price and market relationships are becoming more an issue.

Appendix 7 two routes to NewAError! Bookmark not defined.

Route 1:

CONFIDENTIAL FIGURE Route 2:

CONFIDENTIAL FIGURE

Appendix 8 Five forces analysis for the PET industrial yarn industry Power of Suppliers

There are two suppliers to the industrial yarn producers, the raw material supplier who supplies the monomer to make the PET polymers (resin), and the supplier of the PET polymer (resin). The industrial yarn producer processes the PET polymer into yarns and creates the different grades and qualities. As can be seen, the large chemical companies that produce PET industrial yarns supply often also raw material and PET polymer. The raw materials and PET polymer are not very unique products and there are numerous suppliers, in addition the large companies produce also for own use, which makes the overall bargaining power of suppliers low.

Power of Customers

Customers of industrial yarn producer can choose between amounts of suppliers and there is not much product differentiation in the PET segment. The maturization of end-markets makes that the customers their price reduction shift to their suppliers, the industrial producers. There is an overcapacity in the market, which causes that the competition on price is fiercer and makes that the bargaining power of customers is high.

Threat of Entrants

The growth prospects of the PET industrial yarn market makes it not more attractive for new entrants because of the overcapacity in the market, so it will be very difficult to gain market share. Also the capital requirement, in order to produce on a significant scale in order to keep production costs low, is relatively very high. The specialized and expensive equipment that is required causes this. The PET industry is becoming mature, so price is a very important competitive element. When an industry is becoming mature it is more difficult to come up with innovations. Concluding, threat of entrants is low.

Threat of Substitutes

PET industrial yarns, and PET application in general, is by itself a substitute for PA’s and steel. Due to the fact that PET is cheaper than Nylon and due to technical improvements of PET, it finds more and more application areas where it chases away Nylon (and steel).

Internal Rivalry

There is concentration in the market, especially in local markets. The 15 largest producers own 76% of the total market capacity. A high concentration in the market means that competition is less fierceError! Bookmark not defined.. In theory, this implies that there is less need for innovations, which slows down the adoption of new technologies. As a result, there is not much product differentiation (for example: no one excels in hydrolytic stabilityError! Bookmark not defined.) and there is an overcapacity in the PET industrial yarn market. This makes that competition focuses mainly on price. “The branch of Industrial PET yarns is under price pressure; it has to be as cheap as possible”Error! Bookmark not defined.. After price, product performance (strength, shrinkage, flexibility) is the main competitive factor. Margins are protected by large-scale production and niche applications.

Product differentiation is therefore desirable. Overall, the internal rivalry is categorized as

high.

Appendix 9 Five Forces analysis for the PMC industry Bargaining power of monofilament suppliers

The suppliers of monofilaments for PMC, which were formerly independent producers, are integrated with the PMC suppliers mostly. Thus, bargaining power of suppliers is low.

Bargaining power of paper producers

Due to the fact that the paper industry is mature, the paper producers are under price pressure of their customers. This results that the paper producers force their suppliers to reduce their costs.

Although there are five substantial players in the market of PMC and a lot more paper producers, the PMC suppliers remain dependent on the paper producers. Additionally, there is an overcapacity in the market for PMC at the moment, so bargaining power of paper producers is high.

Threat of entrants

The trend of consolidation and concentration in the market for PMC makes it difficult for new players to entrance the market. The scale and globalization of the market is significant.

These are the main reasons that the threat of entrants is low.

Threat of substitutes

Eventual substitutes are laser technology, in order to create more drainage canals per cm

for reaching higher quality paper, and methodologies for making advance of the capillary force of water. These technologies are embryonic and not to be expected soonError! Bookmark not defined..

Threat of substitutes is low.

Internal Competition

There has been a concentration in the market for PMC, as a follow up for what happened in the paper (machinery) industry. Now there is a lot of turbulence in the market and one is seeking for more stability, relatively seen. This will not be reached soon, because there has been much stability before the concentration started. Now there are a lot of developments in case of further development of existing products/ methods, e.g. other weaving methodologies in order to get paper of higher qualities, lighter weights and better (more efficient) processesError! Bookmark not defined..

Competition is fierce, mainly on (technical) service and price; the prices are under pressure a

lot since the last 2-3 years due to the overcapacity on the market. The PMC industry is open

for innovations, but added value is priority number one. If NewA is able to make the

machine stop less for changing PMC, then it could be very interesting for the paper

producers (e.g. not 6 weeks, but 8 weeks in forming). Flexibility of the material has to be

taken into account, because less flexible materials, though, damage the quality of the

paperError! Bookmark not defined..

Appendix 10 the five forces analysis of Porter for the Engineering Plastics industry

Threat of entrants

In the polymerization the threat of entrants is regarded to be low, because there are entry barriers, like huge investments in production capacity, scale of the industry and established market relationships. In the compounding sector, the entry barriers are much lower, because investments in production capacity are much lower and the polymers are commercially good available. These entrants can cause high rivalry in the lower market segments with little product differentiation and quality criteria, because here competition is mainly on price. This is damaging the large producers of taken away capacity filling sales. Threat in this sector is high.

Threat of substitutes

Threat of substitutes is low, because engineering plastics are by itself the main substitute products for metals, composites and ceramics. However, the different kinds of engineering plastics are mutually substitute products, depending on the performance criteria the material has to match.

Power of suppliers

The supply of raw materials is mainly captive, so the bargaining power of suppliers is low.

Additionally, in case that supply is not captive the raw materials are commercially well available with a significant amount of suppliers.

Power of customers

In general, the power of customers is categorized as high. Especially in the high-end applications, like automotive and electronics, the customers (the system suppliers) take the important decisions in the business column and set the very strict performance criteria to the suppliers of engineering plastics. In the lower-end applications, e.g. domestic lightning and furniture, the power is shifting up to the molders, because there are not such high performance criteria, like flammability, production certifications (ISO), etc., of consumers.

So, the molders decide which material is used in order to make a good margin. However, in this case the molders do not have as much power as the system suppliers in the high-end applications.

Internal Rivalry

The internal rivalry is regarded to be medium. There is a high concentration in the market, which in theory decreases the rivalry. But as the industry is becoming mature, there are investments in production capacities to enlarge the economies of scale in order to make enough margins. The industry is becoming mature and the competition is mainly on price/

performance. The high specifications in the important high-end application areas, like automotive and electronics, increase the competition to gain enough or increase market share. The market is risk averse, because performance is very important and suppliers of engineering plastics are not eager to take risk in new products of which is not sure that the quality is sufficient or better. So, there are a lot of incremental innovations, rather than breakthrough innovations.

Appendix 11 The five forces analysis of Porter for the thermoplastic polyurethane

industry

Threat of entrants

As the concentration of the market is very high, the threat of new entrants is regarded as low. However it is possible; the last entrant in the European market was Huntsman when it acquired the polurethane business from ICI ($2.7 billion) in 1999 and in 2000 the global TPU business off Rohm and Haas. But the threat of entrants that can not acquire existing businesses on a global scale and have to start from the beginning is very low.

Threat of substitutes

The threat of substitutes in the form of other TPE ’s remains high, because TPU ‘s are high performance materials and relatively high priced. So, the threat of substitution by cheaper materials is high.

Power of suppliers

In general, as the production of raw materials is mainly captive, power of suppliers is regarded as low for the leading producers of TPU. However, there are compounders in the market that do not have captive production of raw materials, of which Noveon is the most important, and in that case the power of suppliers is high.

Power of customers

Due to the high concentration of the market worldwide, thus limited suppliers, and the numerous end uses that are possible for TPU ’s, the bargaining power of customers is at first sight regarded as low. However, in some end markets, like the automotive OEM’s, the power of customers is high due to the natural power of these customers. Because the polyurethane industry is a mature market with not a great product differentiation, the competition is focusing on price and customers can choose between the suppliers of TPU ’s.

Concluding, the power of customers is categorized as medium.

Internal Rivalry

The high concentration in the world market causes in theory that the internal rivalry

decreases. Because of the maturation of the industry and the absence of great product

differentiation the competition almost totally price driven and is heading towards

commodity salesError! Bookmark not defined.. Internal rivalry is getting tougher and

BASF is experienced as the most aggressive participant, followed by Huntsman and Dow, in

order to establish market share.

Appendix 12 Preparation of CONFIDENTIAL (1) and unique property of ALLINCO CBC (2)Error! Bookmark not defined..

1.

CONFIDENTIAL FIGURE

2.

N X

Polyester/Nylon

O

+ HX

Polyester/Nylon

N H

O N

O

Appendix 13 Benefit based market segmentation; motivating selection of market segments

After brainstorming with experts for possible application areas with need-based segmentation as the viewpoint, the following list came up:

Coatings

• Antifouling coatings. These marine coatings prevent fouling at the underbody of a ship.

Fouling implies ineffective fuel consumption. Conventional antifouling coatings contain copper, after the prohibiting of tributyltin since the beginning of 2003, but this is a temporary solution. There is demand for other techniques that prevent fouling and contain no heavy metals that terminates the foul and the environment.

• Architectural paint. It would be a big advantage if in manually applied architectural paint

“self” cleaning properties could be implemented.

• Soft-feel coatings. Demand has been driven mainly by OEM designer requirements for surfaces with an attractive look and feel, which enhances the value perceived of the car interior. The coated surfaces become dirty very quickly though. There is a cosmetic need for anti staining soft-feel coatings

• Coil coatings. Coiled steel is applied in construction industry mostly for front panels, frames etc. These items become dirty but are not easy to clean. Today, very expensive fluoropolymer coatings are applied on luxury buildings to improve appearance. The new fluor additive could provide this “self” cleaning aspect to coil coated steel in a more cost effective way, in order to improve the outside durability and appearance for the construction (automotive) industry as a ‘whole’. There is a technology gap due to problems with the repaintibility of coatings containing the conventional (silicone) additives.

• Automotive clear coats. It would be a big (cosmetic) advantage if one needs to wash the car not so often. DaimlerChrysler supports this concept

.

Fibers

• Anti staining carpets. There is demand in the market for anti staining carpetsError!

Bookmark not defined.. At this moment, carpet fibers that are anti staining and have good properties for dying do not exist. Technically, these are contrary items today. The new fluor additive could solve this problem, because it is estimated that it does not influence the dye ability. Cleaning carpets is not a process easily conducted, which is experienced by the consumer as a disadvantage of carpets.

• Anti staining textile is already known in the market and is at first sight a high added value element in a big volume market. However, clothes are washed often, also when it is not really dirty, and in an easy way.

Melamine

• Anti-staining laminates (floors, kitchen blades etc.). There is a demand in the market for

anti staining laminates; because of the maturation of the industry this would be an

expressively distinctive propertyError! Bookmark not defined..

Appendix 14 Five forces analysis of the fluoroadditives market Power of suppliers

Due to the specific production process for fluor chemistry, supply is mainly captive at the producer of fluoroadditives (polymers). Also contracts for supply are drawn up with specialized raw material producers for worldwide coverage. Power of suppliers is categorized as low.

Power of buyers

There are only a few suppliers of fluoroadditives and many end-uses are possible. If a company wants to apply fluoroadditives in their products the bargaining power of buyers is low.

Threat of entrants

Entry barriers are very high, because the technology for monomers and/ or polymers is not available and because key monomers (i.e. TFE) are not safe to transport in large volumes on a regular basis

. Due to the very high concentration in the market worldwide, developing distribution channels in order to create substantial business is very difficult. Threat is low.

Threat of substitutes

Direct substitutes for fluoroadditives for self cleaning properties are additives based on silicones and rough surface technology (Lotus effect). Indirect competition comes from fluoropolymer end products that are used merely for the general advantages mentioned earlier than for repellency; these products are relatively expensive. The threat of these substitutes is regarded as medium, because silicone additives are in general cheaper but less effective (so often used in less demanding areas) and the rough surface technology is in the first stage of development.

Internal rivalry

DuPont has a dominant position in this market segment. There are a few other participants that are much smaller but would like to increase their market share at the cost of DuPont.

The internal competition is regarded as medium.

Appendix 15 Five forces analysis of the coating industry Threat of Entrants

Due to the maturation and scale of the coating industry the threat of entrants is categorized as low. This barrier is even become higher due to the mergers/ acquisitions and joint ventures in the last years. Additionally, coating applications are very fragmented and require a specialization and experience, because of the performance criteria coatings have to reach.

In less developed regions, entrance barriers are much lower, because here performance criteria are much lower and are global distribution systems, for example, not necessary.

Threat of Substitutes

Threat of substitutes is merely at technology level. The technologies applied in the coating industry are various, there are numerous chemistries for each application depending on the specific characteristics an industrial customer wants for its product. The big coating manufacturers are present in a lot of different technologies and also in upcoming technologies. In powder for example, which is a substitute for solvent-based coatings, because of the more ecological soundness of powder, all the big coating manufacturers are present.

Power of Suppliers

The suppliers for the coating manufacturers are the suppliers of resins, additives, pigments etc. Some of the raw material is captive of the coating manufacturer but this is declining.

There are various suppliers of resins or other raw materials but there is a lot of specialization. However, the power of these suppliers is low, because coating manufacturers are the final decision makers and becoming bigger through acquisitions. The coating manufacturers function like a spider in the web, because they have the contacts with the fragmented end-customers and thus have the most important information. Through technology push suppliers are trying to implement higher margin products, but this is not very successful. The suppliers face price pressure of the price pressure the coating manufacturers on its turn receive of their customers, due to maturation and consolidation of end-markets.

Power of Customers

The ongoing price pressure of customers forces the coating manufacturers to compete on system costs. Due to the globalization of customers, buying power is increased.

Furthermore, the industrial customers who compete also on price, force the coating manufacturers to limit their prices. The bargaining power of industrial customers and especially automotive OEM is high.

Internal rivalry

The stringent legislation on VOC release by governments stimulated adoption of new

coating technologies. Nowadays, this is still an important factor for competition and

innovation. Coating manufacturers, in order to protect market share, follow the trend of

globalization of customers. Performance is also an important factor, especially in high-grade

markets like automotive. In bulk markets, system costs remain the success factor. Through

large scale and efficient processes, margins are protected. In consumer markets, branding is

more an issue and revenues are there very healthy. In combination with the overall presence,

there is a lot of specialization at coating manufacturers in order to decrease competition and

protect market share. The competition in the overall industry is to categorize as high.

Appendix 16 Five forces analysis for the textile and carpet producers industry Threat of entrants

Threat of entrants in these industries is regarded as low, because of overcapacity and high entry barriers for worldwide production in these mature markets. In the local and low-end markets entry barriers are estimated to be much lower.

Threat of substitutes

In textile industry, substitute products are mainly natural fibers and its popularity cycles with fashion. There is also threat of substitution by other synthetic fibers, like acryl. In carpet industry, main threat for nylon is substitution by polypropylene (and to a much lesser extent polyester) in the high volume low-end markets, like fairs etc. In the high-end markets, nylon remains first choice due to its properties. Threat of indirect substitution on flooring level is the rise of hard floors like laminates, stones and wood. This mainly caused by changing ideas about fashion and cultural aspects. Overall threat is categorized to be high.

Power of suppliers

As the large producers of both textile fibers and carpets are all back integrated the power of suppliers is, especially in polyester, regarded as low. Although, in the supply of the main raw material for nylon (carpet) fibers, caprolactam, DSM has a leading position but its power is also low. This is caused by total maturation and the key success factor for an improved margin is operational excellence due to fierce price pressure.

Power of customers

It is estimated that the customers of textile fiber manufacturers, the clothing industry, have the absolute power to the producers, because of their close position to consumer and they decide what the fashion looks like. The most value-adding element is branding in this industry. In the carpet industry, there are two ways towards the carpet manufacturer. The largest ones are back integrated into fiber production and forward integrated into production of actual carpets. So, these companies own the whole chain and have power towards the distributors of carpets. The smaller ones are in the middle of carpet fiber producers and the distributors, so these carpet manufacturers have less power. Overall power is regarded to be high, because in both industries the influence of the end consumer is high.

Internal rivalry

Due to total maturation, high concentration, low product differentiation, threat of substitutes, high entrance and resign barriers because of the scale of the industry and equipment needed, competition on price is fierce in both markets. In carpet industry, branding is more an issue, but here also competition on price is fierce. Concluding, profitability of producing textile and carpet(s) fibers is regarded to be low.

i Main input by Stanyl Application Development/ Technical Service manager, DSM Engineering Plastics, 2004

ii R&D manager body & power train, DaimlerChrysler, presentation at the international coating congress 2003, Athens

iii Fluoropolymers, Chemical Economics Handbook, SRI International, 2002