Lanxess Acquisition of Majority of Brazil’s Petroflex Completed

Specialty chemicals group Lanxess AG has completed the acquisition of an approximate 70 per cent holding in Petroflex S.A., Latin America’s largest rubber producer. Lanxess is paying some 200 million euros for the package of shares. The transaction took effect on April 1, 2008. Petroflex S.A. will be included in Lanxess’ 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 535 million euros. 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 tonnes. 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 tyres, 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.