LANXESS completes majority share in rubber producer

LANXESS AG has successfully completed the acquisition of an approximate 70 percent holding in Petroflex SA, the biggest rubber producer in Latin America.

LANXESS is paying some EUR 200 million for the package of shares. The transaction took legal and economic effect on April 1, 2008. Petroflex S.A. will be included in LANXESS’s consolidated financial statements from the second quarter of 2008. In accordance with local regulations, LANXESS will shortly issue a public takeover offer for the remaining shares.

“Petroflex ideally complements our product portfolio and strengthens our position in one of the world’s most important growth markets,” said Chairman of the LANXESS Board of Management Axel C. Heitmann. “In this way we are decisively reinforcing our position in Latin America and welcome our new employees with whom we want to continue growing.”

The new CEO of Petroflex is Joerg Schneider from LANXESS. He has worked for the company in Brazil for several years, occupying several positions, most recently holding a senior post in the Rubber Chemicals business unit. LANXESS is represented on the Board of Directors by Dr. Joachim Grub, head of the Polybutadiene business unit, and Marcelo Lacerda, LANXESS Country Representative in Brazil. The Board of Directors also includes a representative of the minority stockholders.

In 2007 Petroflex achieved sales equivalent to about EUR 535 million with 1,300 employees, of which around 600 were the company's own. The Group has three production sites in Brazil: Cabo (Federal State of Pernambuco), Duque de Caxias (Federal State of Rio de Janeiro) and Triunfo (Federal State of Rio Grande do Sul). Annual production capacity is approximately 400,000 metric tons. The range of elastomer products ranges from solution to emulsion rubber and comprises 70 products: The rubber grades are mainly used in the production of tires, with hoses and plastics being further applications. Around one-third of output is exported to more than 70 countries.

In Brazil, LANXESS currently employs about 400 people in São Paulo, Porto Feliz and São Leopoldo. With the acquisition of the majority share in Petroflex, the number of people engaged by LANXESS will rise to more than 1,700 spread across seven sites. In terms of sales and employees LANXESS will thus become one of the leading specialty chemicals companies in Brazil. Since LANXESS became independent in January 2005, the company has experienced significant growth rates in Brazil. In 2007 sales adjusted for portfolio effects amounted to around EUR 145 million. The acquisition of Petroflex makes Brazil the second-largest market for LANXESS in the Americas region after the United States. All 13 of LANXESS’s business units are active in Brazil, with the main sales drivers being Leather and Inorganic Pigments.

LANXESS is a leader in specialty chemicals with sales in 2007 of EUR 6.61 billion and currently around 15,200 employees in 21 countries. The company is represented at 44 production sites worldwide. The core business of LANXESS is the development, manufacture and sale of plastics, rubber, intermediates and specialty chemicals.

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