rubber processing and plastics industries

The Business Unit Advanced Fillers & Pigments will increase its prices worldwide for ACEMATT® matting agents by 4 to 6 %, depending on grade, as of March 15, 2006.

Costs for raw materials and energy have reached an unprecedented high, which Degussa is no longer in a position to absorb, despite a maximum of cost management efforts.

The Business Unit Advanced Fillers & Pigments, with sales of approx. Euro 1.2 billion (2004) and a workforce of 2764 persons, 30 production sites in 18 countries on 5 continents is one of Degussa’s most important business units and – based on carbon blacks, performance silica / matting agents, organo silanes – the world’s only single-source provider of innovative, tailor-made systems to the coatings, paper, printing ink, consumer products, rubber processing and plastics industries.

Further Expands Carbon Black Capacity in China

While construction of the third line of its carbon black plant

While construction of the third line of its carbon black plant in Qingdao proceeds, Degussa has begun a new project to further expand capacity with a fourth production line. With this investment Degussa AG, Dusseldorf, will significantly increase manufacturing capacity in China: “After completion of our current expansion projects we will be able to produce more than 100,000 metric tons of carbon black” says Robert Wissner, head of Degussa’s Fillers & Pigments Business Unit. The plant is located in the Shandong province, one of the most dynamic economic regions of China and is managed by Qingdao Degussa Chemical Company, Ltd. (QDCC), a joint venture of Degussa AG, Jiaozhou Municipality Fiscal Center and DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH. Degussa is a leader in carbon black with strong positions in all critical global markets. The newly added production capacities will further strengthen its position as one of the leading suppliers to the Chinese market.

“Demand is booming for high quality grades of carbon black. At QDCC we produce these products for our customers in the rubber and tire industries which they need to meet the international quality standards their customers expect”, according to Wissner as he explains the rationale of Degussa’s decision. The Qingdao plant is located close to major customers and to one of the largest ports in China. It is also well connected to a state-of-the-art traffic infrastructure that provides excellent logistics for supporting the dynamic growth of the Chinese rubber industry.

The Chinese tire and rubber markets are changing dramatically. China has now become the world’s largest market for truck tires and the third largest for all tires. Growing investments of the major international car and tire manufacturers and the massive expansion of China’s network of roads and highways are fueling this leap in demand.

Degussa has been producing specialty chemicals in China since 1988, has over 18 companies in the country with production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. Its broad range of products – from carbon blacks, amino acids, polyurethane foam additives, high-performance water treatment chemicals, construction chemicals to initiators used in the production of plastics – is supplying not only customers in China but also in the Asia-Pacific region. Degussa (China) Co., Ltd., Beijing the holding company of Degussa’s activities is supporting the group’s business units through an efficient and professional platform of services. Today Degussa employs over 1,300 people in PRC and generates sales of about 280 million € in 2003.

New Joint Venture to Manufacture Rubber Silanes in China

Degussa AG, Dusseldorf, and Rizhao Lanxing Chemical Industry Co., Ltd. (Lanshan-Rizhao, Shandong Province, People’s Republic of China) have signed an agreement to establish a joint venture for the manufacture of sulfur-functional silanes for rubber applications. This agreement represents a successful conclusion to the negotiations that followed a memorandum of understanding signed by the two companies in July 2005. Degussa will own a 50 percent share in the new joint venture, and Lanxing 40 percent. A financial investor will assume the remaining 10 percent. Degussa is the worldwide leading manufacturer of silanes for rubber applications. Lanxing has been a well-established local manufacturer on the Chinese market since 1998. The new joint venture company will begin operating under the name Degussa Lanxing (Rizhao) Chemical Industrial Co., Ltd., following approval by the responsible bodies, and having obtained all licenses from the Chinese authorities. The company is scheduled to produce sulfur-functional silanes in liquid form and as a blend with carbon black.

Along with silica, sulfur-functional silanes are used to manufacture high-quality rubber compounds for use in tires, technical rubber articles, and sports shoes. In tires, the use of the silica/silane system – a pioneering development by Degussa – allows a significant reduction in rolling resistance and therefore a reduction in fuel consumption. “The demand for the kind of high-quality rubber silanes produced by Degussa’s Advanced Fillers & Pigments Business Unit is continually growing – not least because of the current fuel prices. Robert Wissner, head of the business unit, explains the company’s commitment to China: “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. Our joint venture facility in China will produce for our customers from the rubber and tire industries in Asia/Pacific who need our silanes to manufacture products that meet international standards.”

Together with an increasing production of tires and other rubber products the demand for rubber silanes in China is growing strongly. China has already become the worldwide largest market for truck tires and the third largest for all kinds of tires. Powering this leap in demand is the increased involvement of global automobile manufacturers and big international tire producers, as well as the massive expansion of China’s network of roads and highways.

Degussa, which has been producing specialty chemicals in China since 1988, now has 20 companies in the country, operating production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. Its broad spectrum of products – ranging from carbon blacks, amino acids, polyurethane foam additives, high-performance water treatment chemicals, construction chemicals, and initiators used in the production of plastics – is aligned to customers not only in China but in the whole of Asia. As parent corporation of the Degussa Group in China, Degussa (China) Co., Ltd., Beijing acts as a holding company for the Group’s activities in China, supporting Degussa’s business units through an efficient and expert platform of services.

New Joint Venture in China

Degussa and Wellink Group Sign Agreement to Cooperate in Producing Performance Silica

Degussa AG, Düsseldorf, and Fujian Nanping Xinyuan Investment Co., Ltd. (Wellink Group) in Nanping, Fujian, have signed an agreement to establish a joint venture for manufacturing and marketing performance silica (precipitated silica and silicates). After final approval by the relevant authorities, which is expected soon, the new joint venture will begin trading as “Degussa Wellink Silica (Nanping) Co., Ltd. (DWS)”. Degussa will hold 60 percent in the new joint venture, while Xinyuan, the company in which Wellink has pooled its silica activities, will hold 40 percent.

DWS has three production sites in China, and supplies regional customers with its performance silica. The Chinese rubber industry is currently the major buyer. DWS anticipates further growth in the silicone rubber and toothpaste sectors, among others. DWS has its own research center in Nanping, Fujian, where it develops new products to meet specific customer requirements.

With this new joint venture Degussa is further strengthening its position as the world’s leading producer of performance silica. It now also ranks number one in the Asia/Pacific region, with eight production sites in five countries and a total annual capacity of 175,000 tonnes.

Wellink, the Chinese partner in the new DWS company, began producing performance silica in 1994, and is the market leader in China today.

Degussa is the world’s sole single-source producer and supplier of carbon blacks, performance silica and rubber silanes (three-product system). The Group is now also able to offer customers in China a broad range of products from five local factories, which are supported by three development centers in China.

RAG subsidiary Degussa bets on carbon black in the growth market of Brazil

RAG subsidiary Degussa bets on carbon black in the growth market of Brazil


Capacity expansion of the carbon black facility in Paulinia strengthens top global position

Degussa GmbH has doubled its production plant capacity for carbon black in Paulinia, Brazil, to 100,000 tons per year. With the expansion of capacity in Paulinia, Degussa is augmenting its position as the world’s second largest manufacturer of carbon black with approximately 1.4 million tons per year.

“Carbon black is one of the strategic growth areas that we are systematically expanding. This capacity enhancement allows us to serve the demand of our customers in the tire and technical rubber-products industry even better. We are very optimistic overall regarding future growth in the rubber industry. We are highly equipped to meet this demand with our modern plant in Paulina,” commented Dr. Klaus Engel, Chairman of the Board of Degussa GmbH at the opening of the plant. “We have invested a total of €65 million ($85 million) in Brazil.”

Brazil is a core market for the Advanced Fillers & Pigments division, which is responsible within Degussa for global business with rubber additives and carbon black pigments. In the Brazilian market, around 90% of the demand for carbon black comes from the tire and technical rubber articles industry, and 10% is used as pigment in plastics, dyes, enamels and print inks. “South America is particularly interesting for the division as a growth region. The automotive industry and particularly the tire industry are growing continuously there, also because export volumes are growing. Many tire manufacturers even export most of their production, particularly to the North American market. To this extent, we regard this region, along with Asia, as the focus of our investment activities,” added Thomas Hermann, Head of the Advanced Fillers & Pigments Division. Around 55 million tires and 2.6 million vehicles were produced in Brazil in 2006, a third of each destined for export.

With 3,300 employees and an annual revenue of around €1.24 billion ($1.6 billion), the Advance Fillers & Pigments Division is one of the most important strategic business areas of Degussa GmbH. The division 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 Division one of the highest performing system providers for the rubber-processing industry. The division’s entire product range also offers tailor-made solutions to manufacturers of dyes, enamels, and printing inks, and to the plastics industry.

Degussa has been active in Brazil, the focus of its activities in the Latin American economic area, for over 50 years, and is represented in all its business divisions. The most recent major individual project in Brazil was in 2006 and entailed the expansion of the production facility for hydrogen peroxide bleaching chemicals to 70,000 tons of capacity per year. The plant is located in Barra do Riacho.

As the world number one in specialty chemicals, Degussa, a 100% subsidiary of the RAG Group, provides innovative products and system solutions that are indispensable for its customers’ success. We have summarized this service in the “creating essentials” claim. Around 36,000 employees around the world generated revenue of €10.9 billion and operating earnings (EBIT) of over €870 million in the 2006 financial year.