RAG subsidiary Degussa Opens New Joint Venture in Rizhao, China for Growth Market of Tire Industry

Monday,  August 27,  2007 

Degussa GmbH is continuing to expand its business in China, with the company today celebrating its joint venture Degussa Lanxing (Rizhao) Chemical Industrial Co. Ltd. for manufacturing Rubber Silane and its admixture with Carbon Black in Rizhao, Shandong Province. Degussa is augmenting its position as the only company in the world to supply the three very important ingredients, namely, carbon black, silica, and rubber silane for the rubber and especially the tire industry.

"Rubber Silane is one of the strategic growth areas that we are systematically expanding around the globe. This capacity enhancement allows us to serve the demand of our customers in the local tire and technical rubber-products industry even better. " noted Thomas Hermann, Head of the Advanced Fillers & Pigments Business Unit of Degussa on the ceremony, "By building a production plant in Asia we are supplementing our production facilities in Europe and the United States, and further expanding our position as world market leader."  

Degussa regards China as one of the driving force of the global economy and intends to invest about €100 million annually in China over the next few years. " Degussa is making rapid progress in the growth market of China and today the establishment of Degussa Lanxing (Rizhao) Chemical Industrial Co., Ltd. further strengthen our commitment to this important growth region." commented Dr. Yu Dahai, President of Degussa China at the opening of the plant.   

With 3,300 employees and an annual revenue of around €1.24 billion ($1.6 billion), the Advance Fillers & Pigments Business Unit is one of the most important strategic business areas of Degussa GmbH. The Business Unit is present globally in 30 production locations in 18 countries on five continents. Degussa is the only one-stop-shop supplier of the important product lines of carbon black, rubber silicas and rubber silanes. This makes the Advanced Fillers & Pigments Business Unit one of the highest performing system providers for the rubber-processing industry. The Business Unit's entire product range also offers tailor-made solutions to manufacturers of dyes, enamels, and printing inks, and to the plastics industry. 

In China, Degussa is already operating a carbon black production site since 1994 (Qingdao Degussa Chemical Co., Ltd.) and a silica production site since Feb. 2006. The start up of DLRCI gives Degussa a very competitive position to serve rubber industry in Asia pacific region with all three products produced in China.

Degussa, a wholly owned subsidiary of the RAG Group?is the global market leader in specialty chemicals. Our business is creating essentials?innovative products and system solutions that make indispensable contributions to our customers' success. In fiscal 2006 around 36,000 employees worldwide generated sales of 10.9 billion euros and operating profits (EBIT) of more than 870 million euros.

Degussa has been producing specialty chemical products in China since the early nineties, with wide-ranging trading relations already in place prior to this. The Degussa Group meanwhile owns more than 20 companies in the country, with production sites in Anqiu, Changchun, Dalian, Jining, Liaoyang, Nanning, Nanping, Qingdao, Rizhao, Shanghai, Taiwan and Yingkou. In fiscal year 2006, 4,000 employees generated sales of 460 million euros in China, which is an increase of 60 % from 288 million euros in 2005.