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.