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LANXESS Corp. Announces Restructuring of LANXESS Inc. Sarnia Site to Maintain Competitive Leadership in Global Rubber Industry

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LANXESS Corp. - Technical Rubber Products

111 RIDC Park West Dr., Pittsburgh, PA, 15275, USA

Original Press Release

LANXESS Corp. Announces Restructuring of LANXESS Inc. Sarnia Site to Maintain Competitive Leadership in Global Rubber Industry

Press release date: February 1, 2008

PITTSBURGH - February 1, 2008 - LANXESS Corporation today announced three business initiatives at the LANXESS Inc. Sarnia Site aimed at strengthening LANXESS' business in the global rubber industry. LANXESS Inc. will restructure its Sarnia, Canada operations; LANXESS AG will consolidate global NBR production at its La Wantzenau, France facility; and LANXESS Inc. plans to move its Canadian research activities from Sarnia to an interdisciplinary university setting in Ontario.

Sarnia butyl operation restructures At the site of the company's recently completed $100 million butyl plant expansion, LANXESS Inc. is implementing a 24 month restructuring aimed at improving the global competitiveness of its butyl products. The move is aimed at removing increased operating expenses due to higher energy and raw material costs in addition to the impact of the Canadian dollar on labor.

The expansion of the Sarnia butyl plant made it the largest, most modern facility of its kind in the world. By December of 2008, total production capacity will be 150 thousand metric tonnes. Together with today's announced site restructuring, the plant modernization will improve the plant's productivity. Over the next 24 months the site will reduce its manpower operating requirements by approximately 270 positions.

Global NBR production consolidated LANXESS AG will consolidate global NBR production in La Wantzenau, France over the next few months. The process will involve closing a 64 year old nitrile butadiene rubber production facility located in Sarnia, Canada by the end of May, 2008. While many customers in the NAFTA region are already receiving LANXESS NBR grades manufactured at the La Wantzenau plant, LANXESS Corporation sales and technical support for Technical Rubber products will work closely with customers during the consolidation process to ensure a smooth transition. LANXESS NBR is marketed under the tradenames KRYNAC® NBR, PERBUNAN® NBR and BAYMOD® N.

Global butyl research to be relocated to university setting In an initiative aimed at global growth and innovation of both pure and applied polymers research, LANXESS Inc. is actively searching for an appropriate Ontario, Canada university site that can accommodate relocation of its global butyl research functions from the Sarnia production site. By locating LANXESS Inc. researchers closer to their peers in a multidisciplinary environment, the company is gearing for a significant increase in both pure and customer research.

Butyl Rubber The biggest market for LANXESS butyl rubber and halobutyl rubber is the tire industry, but its remarkable properties make it a key polymer for a variety of technical rubber applications. Butyl offers an attractive range of properties including low permeability, high damping, good resistance to ozone and weathering and chemical resistance. LANXESS Inc.'s Sarnia Site produces both regular butyl and halogenated butyl grades for customers around the world.

LANXESS halogenated butyl rubber products are also widely used in pharmaceutical products, such as closures for infusion containers, injection vials, lyophilization, and blood collection tubes. They are also used as Orings and gaskets in a variety of aerosol containers and inhalers and as plungers for applications such as infusion pumps, pre-filled syringes, insulin injectors and dental anesthetics.

Chewing gum is one of the most interesting applications of LANXESS food grade butyl which is also manufactured in kosher grades. LANXESS applies the most stringent quality control standards for this grade consistent with national and international food regulations and standards to this application.

LANXESS KRYNAC® NBR and PERBUNAN® NBR KRYNAC® is the trade name of a series of oil-resistant acrylonitrilebutadiene rubbers (NBR) manufactured by emulsion polymerization. KRYNAC® is used for hydraulic hoses, fuel and oil supply hoses, seals, rollers, drive belts, fabric linings and gaskets. Other applications are shoe soles (sport shoes and safety footwear) and flooring. In addition, KRYNAC® (or BAYMOD® N) is the base polymer for several automotive applications, such as hoses, oil seals and friction linings.

PERBUNAN®, makes it possible to obtain oil-resistant vulcanizates that can resist extremely low temperatures. In comparison with vulcanizates based on other NBRs, PERBUNAN® vulcanizates show better physical properties, heat aging resistance and abrasion and wear behavior. It is widely used in the automotive industry for oil filter seals, torsional vibration dampeners, membranes, membranes in fuel injection systems, fuel and oil pipes, and hydraulic hoses.

About LANXESS LANXESS is a leader in specialty chemicals with 2006 sales of EUR 6.94 billion and more than 16,000 employees in 21 countries. The company is represented at 47 production sites worldwide. The core business of LANXESS is the development, manufacture and sale of specialty chemicals, plastics, rubber and intermediates.

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