Rhein Chemie

Rhein Chemie increases sales in 2006 to EUR 302 million – Further growth in Europe and Asia

Rhein Chemie increases sales in 2006 to EUR 302 million – Further growth in Europe and Asia

Tuesday, 20. March 2007 The Rhein Chemie Group increased global sales from EUR 295 million in 2005 to EUR 302 million in fiscal 2006. "We reached important milestones in all regions. In the USA, we consolidated business and continued to shift our focus to specialty products," said Dr. Anno Borkowsky, CEO and President of Rhein Chemie Rheinau GmbH. "Our investments in new production facilities in Asia and Europe will help us to profit from market growth. They are building blocks of our long-term corporate policy and a visible sign that Rhein Chemie continues to implement its strategy of innovative service concepts and specialty products."

Mannheim – The Rhein Chemie Group increased global sales from EUR 295 million in 2005 to EUR 302 million in fiscal 2006. “We reached important milestones in all regions. In the USA, we consolidated business and continued to shift our focus to specialty products,” said Dr. Anno Borkowsky, CEO and President of Rhein Chemie Rheinau GmbH. “Our investments in new production facilities in Asia and Europe will help us to profit from market growth. They are building blocks of our long-term corporate policy and a visible sign that Rhein Chemie continues to implement its strategy of innovative service concepts and specialty products.”

At company headquarters in Mannheim, Germany, a new high-tech facility for producing customized chemical blends for the rubber processing industry (Batch-Ready®) went into operation in September 2006.

Similarly, Rhein Chemie responded to the sustained market growth in Asia by powering up new production plants. Most recently, for example, the company launched production of polymer-bound rubber chemicals (Rhenogran®) in India in January of this year. The new plant was built at the production site of LANXESS, Rhein Chemie’s parent company, in Madurai, southern India. It is the second Rhenogran® facility to start operating in Asia in just one year. Not long before, in March 2006, the company had doubled Rhenogran® production capacities at its Chinese joint venture, Rhein Chemie (Qingdao) Ltd.

Rhein Chemie plans to further expand its Asian business by building a new plant for lubricant additives in Qingdao. The new facility will go on stream in late 2008. With an annual volume of 4.4 million metric tons, the market for lubricants in China is four times greater than that in Germany. Annual growth is estimated at eight percent. Industrial lubricants, the segment of most interest to Rhein Chemie, currently accounts for a demand of one million tons a year and is likely to double by 2012 thanks to even higher growth rates. Rhein Chemie will concentrate on the production of customized products and additive formulations for lubricants. They not only ensure better performance and a longer service life in industrial applications, but also contribute to environmental protection, because they can replace products currently used in China that pose problems for the environment.

Rhein Chemie has been successfully providing the chemical industry with tailor-made additives and service products for more than 100 years. Approximately 900 Rhein Chemie employees produce and sell products worldwide to many segments of the rubber, lubricant, plastics and polyurethane industries. About 550 employees work at the head office in Mannheim-Rheinau. The company has subsidiaries and production facilities in Europe, Asia and North and South America. Rhein Chemie is a wholly-owned subsidiary of the LANXESS Group, Leverkusen.

Mannheim, 20. March 2007
bit (2007-03-805EN)

Forward-Looking Statements

This news release contains forward-looking statements based on current assumptions and forecasts made by the management of Rhein Chemie Rheinau GmbH. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of our sole stockholder LANXESS Deutschland GmbH and the estimates given here. These factors include those discussed in LANXESS AG’s reports to the Frankfurt Stock Exchange. LANXESS AG and Rhein Chemie Rheinau GmbH assume no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.