Henkel to establish new joint venture in China

Düsseldorf - The Henkel Group has acquired a majority stake in Huawei Electronics Co. Ltd., Lianyungang, in the Chinese province of Yiangsu. Huawei Electronics Co. Ltd. is a leading manufacturer of epoxy molding compounds for semiconductors in China with 560 employees and generated sales of approx. 18 million euros in fiscal 2004.

"This joint venture provides us with an excellent platform for expanding our electronics-related business in China," said Dr. Jochen Krautter, Executive Vice President Henkel Technologies of Henkel KGaA management board. "Our future partner has modern facilities, very good market expertise and a highly experienced management team."

The Joint Venture with Huawei Electronics represents a unique opportunity for Henkel to extend its global presence and broaden its product portfolio. Huawei Electronics' growing domestic customer base provides a good counterpart for Henkel's internationally established brand. The close partnership of these two innovative businesses will position Henkel Huawei Electronics Co. Ltd among the well known suppliers of epoxy molding compounds (EMC).
"Henkel and Huawei Electronics share a broad based technical expertise and hold a well established global supply chain," explains Patrick Trippel, President of the electronics group of Henkel. "As a consequence, the new joint venture is ideally placed to efficiently deliver the innovative and cost effective solutions associated with Henkel to a wider market".

The fusion of complementary technologies initiated by the joint venture will contribute to the optimization of Henkel and Huawei Electronics' technical and industry expertise. It will lay the foundation for a comprehensive product range suitable for use with an array of offerings. "With our domestic expertise and market position, we are an ideal partner for Henkel;" comments Huawei Electronics' Chairman, Jianglong Han. "Our experience, coupled with Henkel's strong global positioning and renowned technical proficiency, will create a formidable global force in the field of epoxy mold compounds. With our combined Epoxy Molding Compound product lines and Henkel's strong presence in underfill, die attach, liquid

encapsulant, and thermal interface materials, we anticipate this joint venture to provide a competitive advantage not only in the domestic market, but in the global market place as well."

The joint venture will strengthen the electronics-related business of the Henkel Technologies business sector in a region with enormous potential for the future. The market represented by the electronics industry in China is characterized by a large number of manufacturers and very high growth rates. Through the joint venture, Henkel will enjoy even closer proximity to its customers in the area while also generally strengthening its position in the electronics-related business.
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About the electronics group of Henkel
Henkel is one of the world's leading and most progressive providers of qualified, compatible material sets for semiconductor packaging, board level assembly and advanced soldering solutions. Through its Hysol, Loctite and Multicore brands, and its global customer support infrastructure, the electronics group of Henkel delivers world-class materials products, process expertise and total solutions across the board to enable tomorrow's electronic industry.

The Henkel Group operates in three strategic business areas - Home Care, Personal care, and Adhesives, Sealants and Surface Treatments of which the electronics group is part, serving transportation, electronics, aerospace, metal, durable goods, consumer goods, maintenance and repair and packaging industries, and offering a broad range of products for the craftsman and consumer. With brands and advanced technologies, Henkel makes people's lives easier, better, and more beautiful. 50,000 employees work for the Henkel Group worldwide. People in 125 countries around the world trust in brands and technologies from Henkel - "A Brand like a Friend".

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