LANXESS acquires polyol specialist in China

 

• Further milestone in company’s BRIC strategy

 

Shanghai, 8 June 2008– The specialty chemicals company LANXESS AG is strengthening its market presence in the important Asia region by acquiring the business and production assets of Jiangsu Polyols Chemical Co. Ltd. in Jiangsu province, China. Both parties have agreed not to disclose the purchase price. Closing is expected in the third quarter of 2009.

 

Jiangsu Polyols mainly produces trimethylolpropane (TMP) that is used in lubricants, paints and coatings. LANXESS’s business unit Basic Chemicals is already a major supplier of TMP in China and will integrate Jiangsu into its global operations.

 

”This is a further milestone in our long-term growth strategy for BRIC countries, “ said Axel C. Heitmann, Chairman of the LANXESS Board of Management, “In addition, we are underlining our commitment to the important Chinese market in these difficult times.”

 

The Chinese medium-sized company, which was founded in 2006, is located in Liyang, west of Shanghai. Jiangsu Polyols achieved sales of about EUR 10 million in 2008 and currently employs some 170 staff at a facility with competitive technology.

 

With some 1,000 employees worldwide, the LANXESS Basic Chemicals business unit is one of the leading manufacturers of raw materials for agrochemicals, polymers, surface coatings and pigments. It operates several production sites in Germany, China and the United States. The Basic Chemicals business unit belongs to the Advanced Intermediates segment, which achieved total sales in 2008 of EUR 1.3 billion. The segment has proven to be one of LANXESS’ more stable businesses in the economic crisis due to its exposure to the agrochemical industry.

 

During a press conference in Shanghai, Martin Kraemer, CEO of LANXESS Greater China, remarked: “This acquisition is another step in strengthening our leading businesses here in China –and further proof of our successful China strategy. We are extending our employee and production base along our path of long-term, sustainable growth.”

Jiangsu Polyols is LANXESS’ second acquisition in China following the takeover in June 2008 of the largest and most modern plants for yellow iron oxide pigments in China from Jinzhuo Chemicals Company Ltd. in Jinshan near Shanghai. This strengthened the market position of the LANXESS Inorganic Pigments business unit, ensuring an independent supply of raw materials.

 

LANXESS also announced today that it has acquired the businesses and assets of stock-market-listed Indian company Gwalior Chemical Industries Ltd. for EUR 82.4 million, including debt.

 

This is LANXESS’ first acquisition in India and further strengthens the portfolio of the Basic Chemicals business unit. Gwalior is one of the largest Indian producers of benzyl products and one of the leading global producers of sulphur chlorides for the agrochemicals, pharmaceutical as well as flavor & fragrance industries.

 

LANXESS is a leading specialty chemicals company with sales of EUR 6.58 billion in 2008 and currently around 14,600 employees in 23 countries. The company is represented at 44 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of plastics, rubber, intermediates and specialty chemicals.

 

Forward-Looking Statements

This news release contains 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.