Inauguration of Degussa (China) Holding in Beijing

January 20, 2003

"Due to its size, its sustained dynamic development and its great economic potential on the whole, the Chinese market is a highly attractive one for a company that is the third-largest chemicals company in Germany and the world market leader in specialty chemicals" – Prof. Utz-Hellmuth Felcht, Management Board Chairman of Degussa AG, Dusseldorf, Germany, inaugurated the new Degussa (China) Holding in Beijing on Monday with these words. Further advantages offered by China include a huge potential in terms of highly-qualified and highly-motivated workers, and politically stable conditions. In Prof. Felcht's view, the Chinese specialty chemicals sector will take second place behind the European Union in global rankings by 2008. Degussa particularly has the 2008 Olympic Games and the Shanghai World Expo in 2010 in mind with regard to tapping Chinese market potential.

Degussa (China) Co., Ltd. is Degussa AG's parent company in China, and will be supporting Degussa business units with an efficient service platform that displays particular expertise with regard to the Chinese market environment and Chinese law. "The holding will be working on new investment projects, in some cases in collaboration with Chinese partners", stated Eric Baden, responsible in the Degussa Group for the China Region.

In future, all Degussa companies in China are to become subsidiaries of Degussa (China) Holding, whereby it is planned to transfer all the stakes currently held by Degussa AG or other Group companies in China-based companies to the holding within the near future. Moreover, the holding is to undertake all of Degussa's new Chinese-related investments.

"Above and beyond this, our new holding will be determining the direction of local research and development, establishing contacts with China's leading universities, and purposefully fostering Chinese junior executives with the potential for an international Degussa career", emphasized Eric Baden.

Degussa aims to significantly increase its involvement in China over the next few years. A few weeks ago, basic planning was started on a Degussa "multi-user production location", in which infrastructure is to be shared by several business units to achieve an optimum cost and utilities situation. "The strategy behind this solution is to lower the barriers faced by our busi-ness units in the establishment of production facilities in China", explained Prof. Felcht.

Construction of Degussa's Shanghai R&D Center

For a specialty chemicals company such as Degussa, linking innovation and market proximity is a crucial aspect of entrepreneurial success. For this reason, work began on constructing a Degussa R&D center in Shanghai this January, whereby cutting-edge laboratories, marketing facilities, rooms for applications engineering seminars and technical after-sales services will be gathered together under a single roof. "The center will enable Degussa units to pursue specific product developments on a local level and thus take the particular requirements of the Chinese market into greater consideration", explained the Degussa Management Board Chairman. The investment volume for the R&D center, which is scheduled to take up operation at the end of 2003, amounts to some € 10 million.

Degussa, which has been producing specialty chemicals in China since 1988, now has over 15 companies in the country operating production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. Its spectrum of high-quality products – ranging from carbon blacks, amino acids, polyurethane foam additives, high-performance water treat-ment chemicals, construction chemicals, and initiators used in the production of plastics – is aligned to customers not only in China but in the whole of Asia. Degussa currently employs over 1,000 people in China, where it generated sales of approx. € 210 million in 2001.

Degussa is an entirely newly-formed, multinational corporation consistently aligned to highly profitable specialty chemistry. With sales of € 12.9 billion and a workforce of some 53,400, it is Germany's third-largest chemical company and world market leader in specialty chemicals. In fiscal 2001, the corporation generated operating profits (EBITA) of more than € 1 billion. Degussa's core strength lies in highly-effective system solutions tailored to the requirements of its customers in over 100 countries throughout the world. Its activities are led by the vision "Everybody benefits from a Degussa product – every day and everywhere".

Contact:
Hannelore Gantzer
Spokeswoman
E-mail: hannelore.gantzer@degussa.com

More information please visit Degussa Events in China.