Transcript Battery Council International Dan Langdon President East Penn Manufacturing Co., Inc.

Battery Council
International
Dan Langdon
President East Penn Manufacturing Co., Inc.
Current President BCI
Agenda
•
•
•
•
Regulatory Legislation
Global Implications
Election Year Implications
North America Industrial Battery Forecast &
Data
• North America SLI Battery Forecast &
Marketing Data
• Effects on Distributors
• Battery Council International
Regulatory Legislation
Recycling Laws
Now with Ohio: Pb Battery Recycling Laws - April 2008
BCI Model
Disposal Ban
Recycling
• 97% of all battery lead is recycled
• Compared to:
–
–
–
–
55% of aluminum soft drink and beer cans
45% of newspapers
26% of glass bottles
26% of tires
Recycling
• The typical new lead-acid
battery contains 60 to 80
percent recycled lead and
plastic.
Air Transportation Safety
• Continues to be a concern
– FAA now has 95 “incidents” on its list
– Biggest focus is lithium/lithium ions
– Most recent incident involved nonspillable leadacid batteries shipped by manufacturer
• Average FAA penalty now $80,000
• New battery transportation rule to be
proposed this summer
National Ambient Air Quality
Standard for Lead (NAAQS)
• 1976 – Lead added to list of criteria
pollutants
• 1978 – Primary and secondary NAAQS set
• 1.5 µg/m3, quarterly average
• May 2008 – Proposed revision rule due
• September 2008 – Final rule
• September 2011 – States must amend their
regulations (SIPs). This probably means new
permit restrictions.
Change in Emissions Sources
• 2002 National Emissions Inventory (NEI)
– ~1700 tons lead emitted per year
– From >12,000 point sources plus non-point, mobile
• NEI does NOT include near-roadway resuspension
of soils/dust that may contain historically
deposited lead
– California study suggests this may contribute up to 8
times the emissions from stationary & mobile sources
combined
Emissions Sources
Aviation Fuel
Utility Boilers
Industrial/Comm/Institutional Boilers & Process Heaters
Iron and Steel Foundries
Primary Lead Smelting
Secondary Lead Smelting
Mining
Military Installations
Municipal Waste Combustors
Electric Arc Furnaces (EAF)
Integrated Iron & Steel Mfg.
Pressed & Blown Glass & Glassware Mfg.
Lead Acid Battery Mfg.
Secondary Nonferrous Metals
Hazardous Waste Incineration
Total (Includes Categories Not Listed Above)
392
221
191
110
59
46
38
33
33
32
32
32
25
23
22
1640
Climate Change Regulation
• Potentially the biggest Federal regulatory
program since the New Deal
• “Cap and Trade” bills would require major
emitters (factories) of greenhouse gases to
obtain allowances
– All electricity prices will go up … a lot
• May encourage off-shore production
Global Implications
Global Implications
• European union directives on recycling
• Registration, Evaluation and Authorization of
Chemicals (REACH)
– Proof for demonstration for safe use of chemicals
• Continued consolidation in all segments of
the channel everywhere
• Rising cost of raw materials
• Cost of inventory ties up our capital
• A global economy-outsourcing to China,
India and even Vietnam
China Issues
– Higher cost of oil feeds inflation in China - up to
15% annually
– Prices rising from much higher shipping rates
• Cost of sending a 40 foot container from China to
the US West Coast soared 150% to $5,500 since
2000 (Source: CIBC World Markets)
China Issues
– The shift back to the US has started
• The weaker dollar has made our products more
attractive
• Little value in having millions of dollars in inventory
sitting in the middle of the Pacific Ocean
• China elimination of VAT Refund is leveling the
playing field
Election Year Implications
From BCI Perspective
•
•
•
•
Little real progress in Congress in 2008
Many oversight hearings
Few policy-oriented policymakers
Increase in legislation and regulation particularly in the environment
Election Outcome Implications
• Climate change legislation by Nov. 2009
• Lieberman-Warner (originally called McCainLieberman) bill
• Other environmental and occupational health
initiatives by mid-year
•
•
•
•
Basel ratification/TSCA amendments
E-waste mandate (new RCRA recycling title?)
Limitation on imports from some countries
Lead paint in housing legislation
Election Outcome Implications
• OSHA lead standard in 2010 or 2011
• Imitation of European Union Directives by
2011
What About the Candidates
• Both candidates favor environmental
protection
• Offshore and Alaska drilling will be major
issue
• Vagueness about environmental issues other
than climate change
• Obama offers specifics including emphasis on
lead poisoning of children
• Transition papers and appointments will be
key
111th Congress Could Be Huge
•
•
•
•
•
Climate change legislation
Additional EPA regulation
Securities/Banking legislation
Federal regulation of insurance industry
Restrictive trade legislation
North America Industrial
Battery Forecast & Data
Presented by Bob Cullen Vice President, Sales & Marketing Battery Products,
Hollingsworth & Vose Company at BCI’s Annual Convention.
2007 Industrial Battery Sales
By Market Class ($ Millions)
$751
Motive
50.2%
49.8%
$744
Stationary
Total: $1.49 Billion
Source: Battery Council International
Industrial Battery Trends
Actual 2007
Forecast 2008
Industrial Truck
$ (millions)
8%
(4%)
700
600
500
400
300
200
100
0
1998
2000
2002
OEM
Source: Battery Council International
2004
Non-OEM
2006
2008
U.S. Motive Power Trends
• Fork Lifts
– Battery Market increased by 8%; (20% due to
lead)
– 2007/8 Equipment spending slows dramatically
– US Economy becoming a Service vs.
Manufacturing Society
U.S. Motive Power Trends
• Forklifts (cont’d)
– US Warehouses need more Forklifts than
Manufacturing plants
– Overall Market Conditions
• Replacement market is helping
• 2008 expected to be a down year
Industrial Battery
Market Summary
• Motive Power
– Actual Motive Power increased sales by 8% in
2007- down 6-8% when Lead prices deducted
– Motive forecasted to decrease by (4%) in 2008
– BCI Forecast - Motive down (9%)
North America SLI Battery
Forecast & Marketing Data
North America SLI Shipments
Adjusted for non-reporting companies,
–
=
includes additional sales & export shipments
OEM
Replacement
million units
105
24.4
26
million units
98.7
100
22.2
20.1
22
95
90
18
93.9
84.6
85
14
80
10
75
2001
2003
2005
2007
Source: Battery Council International
2001
2003
2005
2007
OE SLI Battery Market
U.S. / North American OE Battery Shipments
30
Millions of units
25
20
15
10
5
0
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
87
19
86
19
85
19
84
19
83
19
82
19
81
19
80
19
Source: Battery Council International
Replacement
SLI Battery Market
U.S. / North American Replacement Battery Shipments
100
Millions of units
90
80
70
60
50
40
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
87
19
86
19
85
19
84
19
83
19
82
19
81
19
80
19
Source: Battery Council International
North American SLI Battery
Shipments Percentage
Percent of Total
100%
80%
60%
40%
82.6%
81.2%
82.0%
82.4%
83.1%
2003
2004
2005
2006
2007
20%
0%
Replacement
Source: Battery Council International
OEM
North American SLI
Battery Forecast
150
125
million units
112.1
117.9
118.8 122.4
129.8
100
75
50
25
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Replacement
Source: Battery Council International - Daramic Staff
OEM
Total
North American SLI Battery
Forecast Percent Change
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Millions of units
-1.8%
FORCAST
2.0%
4.5%
0.2%
1.0%
6.0%
CAGR 2008-2012
OE: 0.4%, Replacement: 1.7%
Total: 1.5%
2003
2004
2005
2006
OE
Source: Battery Council International
Repl
2007
2008
2012
2007 SLI Replacement
Shipments by Segments
0.4%
5.8%
5.5%
2.4%
4.0%
0.6%
6.5%
65.2%
9.7%
Passenger Car & Light Truck
Heavy Duty Commercial
Marine/RV
Special Tractor
General Utility
Golf Car & Floor Scrubber
Military Types
Power Sport
Other
Source: Battery Council International
SLI Battery Shipment
Trends by Application
CAGR 2001–07
Heavy Duty
General Utility
Golf Car/
Floor Scrubber
Marine/RV
Motorcycle/
PowerSport*
*2004–07, no earlier data
Total
Source: Battery Council International
OEM
Replacement
Light Vehicle
-2.3%
0.1%
-3.3%
5.2%
-4.9%
1.6%
4.1%
1.3%
7.8%
3.1%
10.6%
0.1%
10.7%
1.7%
SLI Replacement Shipments
by Channel of Distribution
0.03%
2007
0.96%
19.22%
0.99%
27.73%
22.41%
16.42%
9.79%
0.50%
0.14%
1.80%
Gas & Oil Co.
Mass Merchandisers (Department & Discount Stores)
Tire & Rubber Co.
Mass Merchandisers (Auto Chains)
Mass Merchandisers (Other)
Government
Parts Distributors
Other
Fleet Operations
Vehicle & Equipment Mfg.
Battery Specialists
Source: Battery Council International
The Top Five Reasons for
Purchasing Particular Battery
54% 53% 42%
Brand
Name
Lowest
Price
Performance
Claims
Does not total to 100% due to multiple answers
Source: Aftermarket Business June 2008 issue
41%
Recommendations
28%
Other
Size of the Automotive
Aftermarket
(Values in Millions of Consumer Dollars)
Figures represent consumer expenditures in current retail dollars (i.e., inflation added) and do not include warranty work.
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
1997
1998
1999
2000
2001
2002
Professional Service (DIFM)
Source: AAIA - 2008
2003
2004
2005
Do-It-Yourself (DIY) Sales
2006
2007
2008*
* 3.9%
Compounded
Annual
Growth Rate
Installing The Battery
DIFM - 52%
DIY - 48%
Aftermarket Business 5th Annual Consumer Attitude Study June 2001
DIFM - 45%
DIY - 55%
Aftermarket Business 12th Annual Consumer Attitude Study June 2008
US Trade Data
Lead-Acid Batteries
30.0
million units
25.0
20.0
15.0
10.0
5.0
0.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Exports
Source: US ITC Trade Data Web, downloaded 27Mar08
Imports
US Vehicles Scrappage Rates
2007 Total scrappage rate at 5.2%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
1970
1980
1990
1995
2000
Cars
2001
Trucks*
*GVW 1-8
Source; 2007 R.L. Polk & Co.
2002
2003
All Vehicles
2004
2005
2006
2007
Median Age of U.S. Cars
and Light Trucks
In 2007, the percentage of the car population 11 years of age and older was 41.3%, compared to
40.9% in 2006. For light trucks, this percentage was 29.5% in 2007 and 29.2% in 2006.
9.5
9
8.5
Age
8
7.5
7
6.5
6
5.5
5
Source; 2007 R.L. Polk & Co.
Light Trucks*
GVW 1-3
07
20
Cars
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
**
Age of Vehicle When
Purchasing A Battery
32%
34%
31%
3%
<1 Years
2-5 Years
Source: Aftermarket Business June 2008 issue
6-9 Years
>10 Years
U.S. Vehicle Registration
250
245
240
235
230
225
220
215
210
205
200
231.9
221.7
2003
235.2
237.1
2006
2007
224.9
2004
Source; 2007 R.L. Polk & Co.
2005
Hybrid Registered
Vehicle Information
500,000
450,000
400,000
354,545
350,000
280,792
300,000
250,000
200,000
145,194
150,000
85,816
100,000
50,000
0
18,628
2001
43,311
2002
Source; 2007 R.L. Polk & Co.
2003
2004
2005
2006
Hybrid Vehicle Registration
Market Share by OE Manufacturer
Honda
18.8%
Lexus
10.5%
Ford
6.7%
Mercury
0.8%
Toyota
63.2%
Source; 2007 R.L. Polk & Co.
Number of Hybrid Vehicle
Launches by Nameplate
50
40
40
27
30
20
16
8
10
0
2
2001
3
3
2002
2003
Source; 2007 R.L. Polk & Co.
5
2004
2005
2006
2007
2008
HEVs and Functions
(Hybrid Electric Vehicle)
Micro-
Mild-
Medium
Full
Battery voltage (V)
12
36
144
>200
Battery capacity (Ah)
50 - 60
15 – 20
6-8
6
Regen. Braking
Engine start
Motor assist
EV Drive
ALABC Project - UltraBattery
Achieved 100k miles Driving without Conditioning charge @ Jan.15, 2008,
Similar performance with Ni-MH Module Drivability, Durability, Fuel
Economy, CO2 Emission
UltraBattery
Test Results 3 EUCAR Profiles
UltraBattery Benefits
• Overcame the weak point of conventional
lead-acid battery
• Suppressed NAM sulfation
• Superior charge acceptance
• Excellent durability @ HR-PSOC (partial state
of charge)
• Meets or exceeds the targets of:
– Power - Available Energy - Cold Cranking
– Self Discharge
Summary
Overall demand for lead acid batteries
remains stable with only a modest increase
in 2008 before returning to historical levels.
OEM is foreseen to continue its decline for
the next couple of years, particularly with the
uncertainty of our economy.
One must still keep a watchful eye towards
Asia while looking for opportunities in
Europe due to the increasing gap in the Euro
to US dollar.
Effects on Distributors
How All This Affects Distributors
• Price of lead, fuel and other metals directly
affect cost of manufacturing and distributing a
battery
• Increased legislation and regulation both here
and abroad will increase manufacturing costs
• Environmental and recycling also affects
everyone in the channel of distribution
• New advances in lead technology make this
(lead) technology affordable and competitive
• Battery Specialists can help customers by
reducing inventory and distribution
BCI 2008 Membership
•
•
•
•
•
•
•
21 new members-262 in total.
35 Manufacturers
102 Suppliers
106 Marketers
9 Associate Members
10 Mutiple Members
Since 1998 (10 year) BCI membership has
grown 50%!
BCI Membership
WANTED
Stable, trustworthy, resourceful, 84 year-old trade
association seeks long term relationship with battery
companies. While others may come and go, BCI is still
thriving after 84 years. With a dedicated volunteer
management team and professional staff, it’s no wonder so
many of our members have been with us since the
beginning.
Battery Council International
• We invite all EBG members to become more
active in BCI
• Sign up for a committee
• Attend our annual conference and Power
Mart Trade Fair
• Read our bulletins and newsletters
• Call or email us your questions, suggestions
and concerns
Battery Council International
• This is a responsible industry.
• This is a safe industry.
• This is a recycling and environmentally
friendly industry.
SPREAD THE WORD!
Thank-you!