LANXESS AG Geleen, Netherlands Monday, September 26, 2011 LANXESS AG Contact: Ingo Drechsler Corporate Communications Corporate Media Europe, Middle East, Africa 51369 Leverkusen Germany Phone +49 214 30-43790 Fax +49 214 30-50691 ingo.drechsler@lanxess.com EPDM Press Conference Remarks Dr. Axel C. Heitmann Chairman of the Board of Management LANXESS AG (Please check against delivery) (2011-00018e)
Welcome, ladies and gentlemen and thank you so much for joining us. Page 2 of 7 We are here to mark two milestones on LANXESS steady march to growth. For today, we took the first major step towards establishing our excellent new home in Geleen by signing our contract with the Chemelot Campus Consortium. And today we are also announcing an investment in a pioneering production process a process that will enable cleaner, more energy-efficient production at our EPDM rubber plant here. Both of these developments mean good news for LANXESS and good news for Geleen. And both moves are very much in keeping with LANXESS position as the technology leader in the specialty chemicals industry. Our company, which was founded just seven years ago as a spinoff from Bayer, is now a leading specialty chemicals company with sales of 7.1 billion euros, roughly 15,800 employees and 46 production sites in 30 countries. Despite the uncertainty and much-publicized slowdown in the economies of Europe, LANXESS continues to grow with a 25 percent sales increase in the first half of this year. We are optimistic about our performance for the balance of this year, and we remain on track to meet our corporate goal of achieving EBITDA pre exceptionals of 1.4 billion euros in 2015. One of the strongest pillars of our success has been our leadership position in high-performance synthetic rubber.
The successful integration of DSM Elastomers into the LANXESS family represents a very important next step for our fast-growing rubber business. Page 3 of 7 And I must say it shows that for a large, global company we can move fast. It was just on May first of this year that we completed the acquisition of DSM Elastomers. We made this investment because DSM s elastomers unit was a major producer of ethylene propylene diene monomer a technical rubber product known as EPDM. LANXESS is also a leading producer of EPDM, with production sites in Germany and the United States. This was such a perfect fit with our Technical Rubber Products business unit at LANXESS. The 420 skilled employees of DSM have enjoyed an unusually smooth and rapid transition. DSM provided us with a superb workforce, a fine research facility, a respected brand name, Keltan, and an EPDM plant with an annual capacity of 160,000 metric tons in Geleen. A second EPDM facility in Triunfo, Brazil, has also joined the LANXESS family, and we are already making technical improvements there that will allow us to pioneer the use of bio-based raw materials in the production of EPDM rubber. LANXESS has long been a leader in EPDM rubber, which is a range of complex copolymers with highly saturated molecular structures but the lowest densities of all standard rubbers. It is characterized by its resistance to ozone, heat and oxidation, so it stands up well under exposure to weather of all kinds.
It is used in the aerospace, automotive, construction, appliance and electronics industries in countless applications from roofing materials and window seals to serving as insulation for solar collector tubes. Page 4 of 7 The largest market sector for EPDM is in automotive engineering. It allows automakers to design improved body seals and is used under the hood for coolant hoses and valve seals. We are focused on growing our range of technical rubber products and in fact all of our synthetic rubber products because they play an increasing role in the mobility and urbanization megatrends that are now key to global economic growth. So building a new headquarters for our EPDM business here in Geleen definitely puts us in the right place at the right time. Following the acquisition in May, we transfered the headquarters for the combined EPDM business from Marl, Germany, to Geleen. And thanks to these new headquarters, all important management functions and laboratories for the EPDM business will be combined under one roof, in the immediate vicinity of our largest production facility, for the very first time. And our people will certainly have a beautiful home here. As you will see from the plans we are unveiling today, this new building will be a beacon of light for Geleen providing an inspirational work environment that will allow creativity and innovation to flourish. And I cannot imagine a more appropriate neighborhood for our new headquarters than here on the Chemelot campus.
Our company s mission is to be at the leading edge of science, chemistry and technology and that is the very spirit of Chemelot and of the Brainport 2020 master plan that aims to attract a host of innovative companies to the Southeast Netherlands. Page 5 of 7 Construction for our new home starts next spring, and we expect to be open for business early in 2013. And as I said in the beginning: There is more. It is appropriate that we also take this occasion to announce a major breakthrough in our processes for rubber production. All of us at LANXESS take great pride in developing new technologies that make possible more sustainable production of chemical products technologies that have made us an industry leader in green chemistry. At almost all of our sites around the world we are constantly developing new ways to produce our products with less energy, less wastewater, fewer emissions and no unnecessary waste of catalysts. That is why we have so quickly retrofitted the production line for EPDM rubber in our newly acquired Brazil plant so that we can use bio-based raw materials. And that is why we are today announcing a more sustainable way to produce EPDM at this plant in Geleen. At this facility, LANXESS will now convert the biggest of our three production lines to the groundbreaking catalyst elastomers technology also known as Keltan ACE technology. We will invest roughly 12 million Euros in this significant upgrade.
ACE technology reduces energy requirements for rubber production, and unlike conventional production processes it does not produce catalysis residues. Page 6 of 7 It offers a better, more sustainable way to produce rubber and it will enable us to produce new grades of EPDM rubber here in Geleen. So, ladies and gentlemen and my colleagues this has all been good news for LANXESS, good news for our EPDM rubber business, and good news for our friends here in Geleen. I want to offer special thanks today to Feike Sijbesma from DSM for being a reliable partner in the acquistion process of DSM Elastomers to our project partners from the Chemelot Campus Consortium.and to the officials from Sittard-Geleen and the Province of Limburg whose goodwill and cooperation played an essential role in our decision to make this our EPDM headquarters. I wish you all continued success on this exciting project and on the implementation of our important new production process. I am quite sure that these projects will firmly establish Geleen as a true innovation hub for LANXESS global network, and will support our company on its growth path for many years to come. And now I would like to ask Mr. Bas Pulles the Commissioner for foreign investment in the Netherlands to say a few words. Thank you very much for your attention.
Forward-Looking Statements. This news release may contain forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. 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 the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Page 7 of 7