Albemarle Corporation Company History 1887 Started as Albemarle

Albemarle Corporation

Company History • 1887 - Started as Albemarle Paper Manufacturing Company • 1921 -1950 - Provided Ethyl Corporation with tetraethyl lead (TEL) • 1962 - Purchased Ethyl Corporation • 1976 - Ethyl leaves paper manufacturing and opens a chemical plant manufacturing aluminum alkyls • 1987 - Acquired bromine chemicals business • 1994 - Albemarle Corporation becomes a publically-traded company • 1998 - JV for manufacturing bromine and its derivatives • 2000’s- JV for manufacture, sale and export of specialty polymer stabilizers and flame retardants; custom fine chemicals 2

Company Overview • Albemarle Corporation is a Baton Rouge based chemical company • Albemarle has two divisions: Catalyst Solutions and Performance Chemicals • After acquisition, Industry leader in 4 markets: Lithium, Catalysts, Bromine, Surface Treatment • After acquisition, Albemarle will be global leader in lithium • Albemarle in high growth, high margin markets 3

Analysis of Vision & Values VISION q Deliver exceptional products and performance q Create sustainable and innovative ways to meet societal and environmental needs VALUES q Sustainability through innovation and incomparable performance q Social, Environmental & Product Responsibility q Community Outreach ØCertified with Wildlife Habitat Council ØReduced Emissions at Refineries ØPartner with Energy Star as of 2014 ØCurrently introducing the Albemarle Foundation to global facilities ØAlbemarle Magnolia's South Plant Artificial Marsh and West Plant Artificial Marsh (an environmentally friendly water treatment process) ØInternational Habitat Conservation Award Albemarle. com and Albemarle 2012 Sustainability Report http: //albemarle. com/Sustainability-Reports-36. html http: //www. albemarle. com/sustainability/albemarle-foundation-42. html Wildlife Treatment Council: http: //www. wildlifehc. org/registry/albemarle-corporation/ 4

Analysis of Goals Continued penetration in the lithiumbased energy storage industry (consumer electronics industry) • Developed innovative technology to isolate lithium carbonate from brine • Announced intention to acquire Rockwood Holdings in July, 2014 for $6. 2 billion Chemical Engineering News http: //cen. acs. org/articles/89/i 19/Albemarle-Make-Lithium. html 5

Analysis of Goals Cont’ Concentration on running the business, generating cash flow, and paying off debt • “The value of the [Rockwood] transaction represents an 11. 3 x multiple of pro forma 2014 enterprise value to EBITDA, including synergies” • Albemarle stock is expected to grow at an average annual rate of 11%. • Forecasted earnings is 2. 4% over last year • Expect earnings growth next year is 9. 95% over this year’s forecasted earnings” Prnewswire. com > http: //www. prnewswire. com/news-releases/albemarle-and-rockwood-announce-merger-to-create-a-premierspecialty-chemicals-company-267139261. html NASDAQ. com http: //www. nasdaq. com/symbol/alb/earnings-growth 6

Analysis of Goals Cont’ Global sustainability and advancing eco-practices and solutions. • 2012 Sustainability Report: • “We are adding purification technology aimed at substantially reducing bromine emissions at our facility in Magnolia, Arkansas” • “In Jordan, we doubled our bromine capacity, but only increased our needs for water by 8 percent, and we are working to reduce that need even further” Albemarle 2012 Sustainability Report: http: //albemarle. com/Sustainability-Reports 36. html 7

Industry Value Chain Raw Lithium Collection/Mining Lithium Process Manufacturing Battery Cell Production Battery Cell Packaging Consumer Electronics OEM 8

Identify the players • Buyers- Syngenta AG, Umicore Group, Reshine Group, Samsung SDI Co Ltd. , Bayer Crop Science, Royal DSM N. V. • Suppliers- • Rivals- FMC Corporation, Sociedad Quimica y Minera de Chile, Tianqi Lithium/Talison • Potential Entrants- nano. Flow. Cell (NFC) • Substitutes- Alkaline Batteries, Flow Cell Batteries, All-solid Lithium-Sulfur • http: //www. kitco. com/ind/Albrecht/2014 -03 -06 -Flow-Cell-Batteries-A-Substitute-For. Lithium-Ion. html • http: //phys. org/news/2013 -06 -all-solid-sulfur-based-battery-outperforms-lithiumion. html • Complements- performance plastics 9

Lithium Processors/Suppliers • • Albemarle. FMC Corporation • • Sociedad Quimicay Minera • • Tiangi Lithium/Talison • • • • Potential Entrants Backward Integration of Buyers nano. Flow. Cell (NFC) Other Chemical/Mineral mining companies • • • • Buyers Syngenta AG Umicore Group Reshine Group Samsung SDI Co Ltd Bayer Crop Science Royal DSM N. V. Complements • • Performance Plastics Substitutes • • Alkaline Batteries • • Flow Cell Batteries • • All-Solid Lithium-Sulfur

Profit Assessment Force Factors Suppliers Product costs (Costs of bids) Low concentration of suppliers High switching costs High Buyers Product critical to buyers product Low switching costs Products are undifferentiated Low Rivals Very low industry concentration Low product differentiation Positive growth rate High New Entrants High economies of scale Limited access to channels Higher competition on bids for minerals Low Substitutes Low propensity of consumer to substitute Complements Mutually beneficial industries Complement in weaker market position (Suppliers of Land to Albemarle) Strength Profit Impact High Low 11

Key Success Factors • Product Differentiation • • Strong Governmental relations • • • Gaining new contracts to supply lithium, product usability over various industries, various product uses such as ceramics, glass, polymers, etc. Winning bids versus other companies, overcoming countries barrier of entry, gaining access to higher quality mineral mines (with higher quality of minerals) • Being able to meet the growing demand of the lithium industry • Lithium consumption has grown at an average rate of 5. 6% since 2000 • Projected rate of growth could reach up 7 -9% by year 2020 with annual consumption of 300, 000 metric tons (up from 150, 000 metric tons in 2012) • Improving production techniques to minimize waste, operate more effectively & efficiently Taking advantage of economies of scale Stabilizing actions from various Economy effects • Falling exchange rates relative to other countries (large effect on input costs), overall decrease in aggregate expenditure in product markets when in recession 12 http: //investors. albemarle. com/phoenix. zhtml? c=117031&p=irol-news. Article&ID=1557250&highlight=

Albemarle Firm Value Chain Infrastructure Plant locations (strong Asian presence) Human Resource Management experienced in lithium – longest history in the business Technology Development Industry leader in Research & Development Procurement Mineral Rights (second largest brine producer and largest spodumene mine (Talison)) Inbound Logistics Shipping – outsourced (partner management) Operations Lithium Production – • Continental Brine • Hard rock ore Outbound Logistics Marketing & Sales Shipping – Government outsourced Relations (partner management) Services Contracts for “high -end” lithium derivatives and other services

Strength and Importance of R&Cs R/C Strength Importance Analysis Mineral Rights 7 10 Without the mineral rights, no lithium production can take place. These are necessary to play the game. Lithium Production 8 7 Albemarle/Rockwood has “market-leading technologies” and “advanced extraction and processing technologies” in lithium. Gov’t relations 4 8 Many other lithium manufactures have direct ties to their governments and Albemarle lags in this category. Plant Locations 9 4 Albemarle has significantly more plant locations in Asia (specifically South Korea and Japan) than rivals. R&D 7 5 Albemarle has an advance R&D department Management 7 5 Albemarle/Rockwood has “longest history in the business with experienced management” Filice, Livio. (2014). Albemarle Joins The Lithium Oligopoly http: //seekingalpha. com/article/2556965 -albemarle-joins-the-lithium-oligopoly Albemarle (2014). Albemarle Acquisition of Rockwood: a compelling combination to accelerate Albemarle’s growth. http: //phx. corporate-ir. net/External. File? t=1&item=VHlw. ZT 0 yf. FBhcm. Vud. El. EPTUx. Nj. Uz. NDB 8 Q 2 hpb. GRJRD 01 NDkx. MDU = Albemarle, SQM, and FCM global plant locations http: //www. albemarle. com/Albemarle/About/Global-Locations-12. html http: //www. sqm. com/en-us/sqmenelmundo. aspx http: //www. fmc. com/en-us/aboutfmc/fmclocations. aspx? rid=5 14

Strength-Importance Matrix 10 Key Strengths Superfluous Strengths Plant Locations R&D Management 5 Lithium Production Mineral Rights Government relations Key Weaknesses Zone of Irrelevance 1 1 5 10 15

Albemarle’s Strategic Position • Albemarle’s Strategy: “To deliver sustainable growth, higher profitability and even stronger free cash flow generation” LOW-COST STRATEGY Cost drivers Ø Production techniques • Increase productivity without increasing the use of natural resources Ø Economies of learning • “Albemarle has extensive experience in brine management and recovery of products from brine. Our lithium recovery technology is an extension of our technological know-how into a very attractive market. ” – Dave Clary, CSO Ø Economies of scale • Low-cost raw material access with the Rockwood acquisition Ø Input costs • Albemarle expects about $100 in cost savings by 2016 – Bloomberg 16 Clary, Dave. (2011). Albemarle Corporation Announces Discovery in Lithium Carbonate Production. http: //investors. albemarle. com/phoenix. zhtml? c=117031&p=irol-news. Article&ID=1557250&highlight Kaskey, Jack; Riseborough, Jesse. (2014). Albemarle to Buy Lithium Producer Rockwood for $6. 2 Billion. http: //www. bloomberg. com/news/2014 -07 -15/albemarle-to-buy-rockwood-in-deal-valued-at-about-6 -2 -billion. html

Fit In an analysis of Fit between Albemarle, the conclusion that can be arrived at is that the aspects do fit with each other. • Values & Vision Strategy fits with competitive environment and works in unison with resources and capabilities • Values and Vision support strategic positioning and overall strategy • Resources and Capabilities enables to compete in competitive environment without compromising Values Strategic Position Fit Competitive Environment Resources and Capabilities 17