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Source: RISI for Tons of Paper Produced; Fisher and MTI Estimates for Tons of PCC Produced 

This chart illustrates the significant PCC growth potential in China and India. Today, India produces about 3.5 million tons of uncoated woodfree paper, MTI’s primary end market for PCC, and is growing by more than seven percent a year. China produces 16.5 million tons of uncoated woodfree— more than both North and South America combined—and is growing more than six percent per year. 

In India, the penetration of PCC, defined as tons of PCC produced and sold into paper, is nine percent, or a little over 300,000 tons, up from 4 percent. In China, the penetration of PCC is about 7 percent, or 1.2 million tons. 

As a comparison, the PCC penetration rate in North America and Europe is approximately 20 percent—two to three times that of India and China, respectively. These two countries are installing state-of-the art paper machines, and there is significant room to increase PCC penetration to the 20 percent Western levels. 

At a PCC penetration rate of 20 percent—as indicated by the blue bar—PCC consumed in these two countries will increase by 2.6 

million tons. Additionally, applying the historical six percent growth rate of paper production of over a five-year period—as shown by the green bar—the near-to- medium-term market potential grows by another 1 million tons, for a total of 3.6 million tons of PCC. 

For perspective, in 2013, Minerals Technologies sold 3.3 million tons of PCC for paper, so the Asia growth potential represents more than a doubling of our current volume sold to the industry. 

In addition, North American satellite PCC plant expansions are moving forward and we expect them to be contributing volume growth in 2014. 

## Minteq and Performance Minerals Geographic Expansion 

## Minteq International 

Minteq International also continued to expand around the world. This business unit, which consists of Refractories, Metallurgical Wire and the Ferrotron equipment product lines, primarily services the worldwide steel industry. 

Refractories growth was driven by a full service contract for a new steel mill owned by United Steel Company B.S.C. (SULB) in Bahrain. This three-year contract, begun in October 2012, will contribute $25 million to $30 million in sales over a three-year period. Traditionally Minteq’s focus has been on sales of monolithic refractory products that are applied onto the linings of steel-making vessels in order to extend service life. Under this agreement, Minteq, working with other refractory companies that produce brick, is responsible for coordinating all refractory maintenance of the steel furnaces and the other steel-production vessels. 

Also, in the Middle East, Minteq signed three maintenance contracts for refractory material, its Minscan® application equipment and manpower services at three electric arc furnaces. 

In Metallurgical Wire, Minteq’s growth was primarily driven by geographical expansion into India, Turkey and Russia. 

