Rhein Chemie

Rhein Chemie: Portfolio streamlining resulted in a drop in sales to EUR 295 million in 2005 – Pleasing growth rates in China and Eastern Europe

Rhein Chemie: Portfolio streamlining resulted in a drop in sales to EUR 295 million in 2005 – Pleasing growth rates in China and Eastern Europe

Tuesday, 09. May 2006 The Rhein Chemie Group achieved global sales of EUR 295 million in the 2005 financial year. The reduction of EUR 18 million compared with the previous year is due to portfolio streamlining measures, such as the sale of the subsidiary iSL-Chemie GmbH & Co. KG, Kürten, on December 1, 2005 which is no longer included in the figures. Rhein Chemie Rheinau GmbH, Mannheim reported that operating profit before write-downs increased by five percent in the year under review.

Mannheim – The Rhein Chemie Group achieved global sales of EUR 295 million in the 2005 financial year. The reduction of EUR 18 million compared with the previous year is due to portfolio streamlining measures, such as the sale of the subsidiary iSL-Chemie GmbH & Co. KG, Kürten, on December 1, 2005 which is no longer included in the figures. Rhein Chemie Rheinau GmbH, Mannheim reported that operating profit before write-downs increased by five percent in the year under review.
Business developments in China and Eastern Europe were particularly pleasing. In each of these regions Rhein Chemie achieved sales growth of 20 percent compared with 2004.

Rhein Chemie is continuing to implement its strategy consistently. Consolidation of the two former US production facilities at the Chardon site in the US state of Ohio is expected to contribute to long-term stabilization of the US business by the end of 2006.

The expansion of production capacities for service products will enable further focus on specialties to be achieved. This can be seen for example in the Chinese joint venture Rhein Chemie (Qingdao) Ltd., Qingdao, where the annual capacity for production of polymer-bound chemicals was recently doubled to 4,800 metric tons. At the production site of the parent company LANXESS in Madurai, India, Rhein Chemie has now begun production of environmentally-friendly water-based release agents for tire production. This means that the company has strengthened its position throughout Asia for both product lines. At the headquarters in Mannheim a new plant for the production of customized chemical blends for the rubber processing industry will be commissioned in the summer of this year representing a total investment of approximately EUR 3 million.

Rhein Chemie is a company that has successfully been providing the chemical industry with tailor-made additives and service products for more than 100 years. Approximately 1,000 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, 09. May 2006
bit (2006-05-808EN)

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.