Butyl Rubber from LANXESS

Brings Forward Record Investment in Singapore

Dr. Ron CommanderGlobal Head, Butyl Rubber business unitMedia Briefing in Singapore, January 18, 2010

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This presentation contains certain forward-looking statements, including assumptions, opinions and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of the company to differ materially from the estimations expressed or implied herein. The company does not guarantee that the assumptions underlying such forward looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments.No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the company or any of its parent or subsidiary undertakings or any of such person’s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

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The Business Unit Butyl Rubber –part of the LANXESS Performance Polymers segment

A leading producer of butyl rubber Sarnia, Canada

Butyl Rubber is one of four business units in the Performance Polymers segment

Sales: > € 500 million per year

Current production sites: Zwijndrecht, Belgium and Sarnia, Canada

Total future production capacity: 380,000 tons*

Sales in 45 countries

LANXESS Butyl Rubber – A growth business

* Zwijndrecht, Sarnia and butyl rubber plant in Singapore (from 2013 onwards)

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Overview of butyl rubber applications –innovative products mainly for tires

LANXESS provides butyl rubber, which is impermeable to airTwo product groups: Halobutyl and Regular ButylTechnology and know-how are crucial to success in butyl rubber marketCustomer industries dominated by tires (inner-liners and tubes)Non-tire applications include:

- Pharmaceutical stoppers- Chewing gums- Protective clothing- Soles of shoes

Tire: 84%Pharma: 5%

Gum: 4%

Construction: 4%

Automotive: 1%

2008 end uses Main applications

Non-tire

Tire

Adhesives: 2%

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Non-tire business gains importance –diversified customer base

* Source: www.marketresearch.com

By 2013 global pharma packaging demand rises by 5.3% annually*China with strongest growth opportunities: extensive government program to upgrade quality and integrity of nationally produced medicinesComparable programs under discussion in India

2008 2010

Tire: 84%Non-tire: 7%

Pharma: 5%Gum: 4%

Tire: 76%Non-tire: 9%

Pharma: 11%Gum: 4%

Rise in demand for LANXESS’ butyl rubber from pharma applications

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Regional shift of demand –butyl rubber business moves to Asia

44%2000

2005

2009

2010

Americas

EMEA

APAC

Growing demand for LANXESS’ butyl rubber in Asia

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New butyl rubber capacities are needed to serve the growing demand, especially from 2013 onwards

Butyl rubber has historically tight supply

LANXESS has been sold out of butyl rubber in the last years

Even in the crisis, demand for butyl rubber rebounded as of Q3 2009

LANXESS is a leading producer with state-of-the-art technology

Source: LANXESS estimates 04 2009; Market demand study from LANXESS

Butyl rubber market overview

Start of production 2013

Global nameplate capacity

Demand

Production @ 90% capacity utilization

2000 2002 2004 2006 2008 2010 2012 2014 2016

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A leading producer of butyl rubber

Global butyl rubber market to grow by more than 3 % annually

Key drivers & trends

- Main driver remains the tire industry

- Tire growth mainly in BRIC countries

- Continuing trend to radial tires in Asia, particularly in China and India

- Contribution of important niche applications in healthcare and food industries

Growing market for butyl rubber

Source: LANXESS butyl market research study

Markets demand more butyl rubber

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Global tire production trend

Tire unitsproduced

2008 2010 2012 2014 2016 2018 2020

CAGR 5.6%

CAGR 1.1%

CAGR 2.5%

CAGR 8.8%

CAGR -1.2%

CAGR 5.9%

Sustainable tire growth dominated by BRIC countries

ChinaIndia

Other APAC

EMEALATAM

NAFTA

China strongest growth driver with almost 9% annual growth

India gaining importance

LATAM follows with growth rates close to 6%

Major tire producers invest in new capacities to serve growing demand – focus is on high performance tires

Asia as growth driver

Source: LMCQ3 2009 and LANXESS estimates

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Planned capacity expansions of selected tire producers –companies focus on BRIC markets

New plants in China and India~€1.300 m investmentNew plant in Brazil€300 m investmentIncrease capacity in Russia2 million tires/year

BridgestoneIncrease capacity in Thailand~€75 m investment/ ~2.0 m tires/yearIncrease capacity in China~€67 m investment/ ~1.3 m tires/year

New plant in Hungary€230 m investment/ 10 m tires/year

Source: Company websites

New plant in China€185 m investment~4 m tires/year

New plant in Russia~€250 m investment~4.2 m tires/year

New plant in China~€52 m investment~2.1 m tires/year

New plant in China~€72 m investment~2 m tires/year

New plant in Taiwan~€250 m investment~5.5 m tires/year

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Transportation and mobility in Asia lead to an increasing radialization rate for truck tires

0%

10%

20%

30%

40%

50%

60%

70%

80%

1990 1995 2000 2005 2010 2015 2020

China

Radialization rate for truck tires

India

All radial tires contain a Halobutyl inner-liner Due to increasing transportation in Asia, truck tires gain more importance

China’s focus on improvement of road infrastructure fuels radialization trend of truck tires (CAGR 1995 – 2013) ~16%

Trend started as well in India: High growth potential due to only 10% - 12% radialization rate for truck tires in 2010

More radial tires trigger rising demand for halobutyl

Source: www.bekaert.com, LANXESS market intelligence

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Key facts:

Record investment in Singapore

Groundbreaking in May 2010

Production to start in Q1 2013

Front End Loading is completed

To restart negotiations with utilities providers and other third parties

LANXESS butyl rubber plant in Singapore –brings forward plans for construction and production

LANXESS to build world’s most modern butyl rubber plant

Singapore

Jurong Island

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Core project team of 20 people

Hiring of plant personnel to start very soon

200 positions for chemical engineers, mechanical engineers, chemists and chemical process workers

Hire locally and regionally

Key plant personnel to be trained in Sarnia, Canada or Zwijndrecht, Belgium

LANXESS butyl rubber plant in Singapore –hiring situation

Hiring and training of plant personnel to start soon

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LANXESS global Butyl Rubber headquarters –moves to Singapore

New office to be opened in Q2 2010

Headquarters to have 35 personnel in the course of 2010

Key functions include marketing, controlling and supply-chain

New Butyl Rubber headquarters

LANXESS in Fribourg, Switzerland

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Value creating investment in a premium business

LANXESS

Largest investment in company’s history

Plant to locate close to major Asian growth markets and customers

Underpins LANXESS’ position as a leading butyl rubber producer

Strengthens Performance Polymers business segment and LANXESS’ total profitability

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