LANXESS to build world scale Nd-PBR rubber plant

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1 LANXESS to build world scale Nd-PBR rubber plant Ian Wood Managing Director LANXESS Singapore Joachim Grub Head of Business Unit Performance Butadiene Rubbers Singapore, June 1, 2011

2 Singapore top pick for LANXESS Singapore provides - Very good raw material supply - Excellent infrastructure large sea port - Proximity and access to key markets - Highly-skilled workforce - Right environment for innovation and technology Asia as key cornerstone in mid-term growth strategy 2

3 Strengthening commitment to Singapore MoU on the long-term supply of butadiene signed with Petrochemical Corporation of Singapore (Private) Limited (PCS) Jurong Island Synergies from LANXESS butyl manufacturing activities Groundbreaking of state-of-the-art butyl rubber plant in 2010 LANXESS biggest single investment of EUR 400 million BTR PBR LANXESS and Singapore a value creating partnership 3 x

4 Construction of butyl rubber plant on track Construction work going according to plan Important milestones successfully finished Focus on safety reflected in achievement of 1,000,000 man hours without lost time incidents since project start Start-up Q Butyl plant construction on schedule 4

5 Investment to create world s largest Nd-PBR plant Planned investment of roughly EUR 200 million in state-of-the art Nd-PBR plant second largest investment in LANXESS history Largest facility of its kind in the world, with capacity of 140,000 metric tons per annum Best-in-class technology About 100 jobs will be created Plant start-up expected H Future-oriented investment in world-scale Nd-PBR plant 5

6 Business Unit Performance Butadiene Rubbers Top solutions meeting future needs Facts Part of LANXESS Performance Polymers segment Production capacity: >800,000 t/a (all rubber grades) Sales: > 500 m Employees: ~1,000 Customers: >250 Products & brands Product groups: Polybutadiene rubbers Styrene-butadiene rubbers Brand: Applications 6

7 LANXESS Global number one for Nd-PBR Global capacity distribution Leading Nd-PBR supplier 2011/2012 [kt] NKNK Others NkNk Synthos Sibur Polimeri Karbochem KKPC Others Synthos Sibur Polimeri KKPC Karbochem 7

8 New Nd-PBR facility strengthens LANXESS global Performance Butadiene Rubbers production network Orange, US Cabo de Santo Agostinho, BR Duque de Caxias, BR Triunfo, BR Dormagen, GE Port Jérôme, FR Singapore LANXESS PBR Unmatched global footprint with world-class manufacturing base Serving current and future requirements of performance oriented customers Emerging markets shift towards performance applications LANXESS has strong footing in BRICS BU PBR: production site BU PBR: technical & marketing center Prepared to grow with customers 8

9 Nd-PBR growth drivers: Green tires are on a roll Global tire labeling: EU: required in November 2012 Attributes: rolling resistance, grip, noise Japan: voluntary introduction in 2010, South Korea expected to follow China & Brazil: expected regulatory action in 2-3 years FACT: up to 30% of fuel consumption and 24% of road vehicle CO2 emissions are related to tires. High rolling resistance leads to rise in fuel consumption and CO2 emissions LANXESS high-performance rubbers reduce rolling resistance by 12%-14% Tire labeling EU Source: GTÜ and ACE, TU München 9

10 Nd-PBR growth drivers: Megatrend Mobility for growing middle class in Asia Car ownership and population Asia compared to Europe and US People entering middle class* ,900 [m people] 1,600 1, ~800 m people Western Europe United States Asia Brazil India China BRIC Passenger cars per 1,000 inhabitants Population in millions e Source: Goldman Sachs Global Economics Group, Is this the BRICs decade?, 2010; Michelin estimates 10 * Population with income >$6,000 and <$30,000/capita in BRIC countries

11 LANXESS continuous investment in R&D to enable future mobility LANXESS inventor of Nd-PBR Technical expertise from Germany - Largest R&D centers in Leverkusen, Krefeld-Uerdingen and Dormagen - Over 400 R&D employees active in Germany Increase of worldwide R&D expenditures in 2010 by 15 percent, plans to increase by another 15 percent to EUR 130 million in 2011, ~80 percent in Germany Germany Basis for LANXESS innovative capabilities and competitiveness 11

12 Value creating investment in a premium business First world-scale Nd-PBR production site in Asia Asia as key cornerstone in mid-term growth strategy Satisfying increasing demand for performance rubbers German R&D expertise making new environmentally-friendly products possible 12

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