press conference remarks “technology transforming future...

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LANXESS AG Contact: Daniel Smith Financial and Business Media 51369 Leverkusen Germany Phone +49 214 30-75179 Fax +49 214 30-50691 daniel-alexander.smith@ lanxess.com São Paulo, Brazil Monday, March 4, 2013 ________________________ Press Conference Remarks “Technology Transforming Future Mobility” Dr. Werner Breuers Member of the Board of Management LANXESS AG (Please check against delivery) (2013-00001e)

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Page 1: Press Conference Remarks “Technology Transforming Future ...lanxess.cn/uploads/tx_lanxessmatrix/brazil_press_conference_speec… · tech plastics, intermediate products and specialty

LANXESS AG Contact: Daniel Smith Financial and Business Media 51369 Leverkusen Germany Phone +49 214 30-75179 Fax +49 214 30-50691 daniel-alexander.smith@ lanxess.com

São Paulo, Brazil Monday, March 4, 2013

________________________

Press Conference Remarks

“Technology Transforming Future Mobility”

Dr. Werner Breuers

Member of the Board of Management

LANXESS AG

(Please check against delivery)

(2013-00001e)

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Good morning … and thank you for joining our press conference. As many of you may know, LANXESS is a leading specialty chemicals company. One of our specialties is developing the technologies and innovative products that enable more sustainable transportation. This has made us a leader in creating the technology of “Green Mobility”. And as the world’s largest producer of high-performance rubber, we have become one of the key advocates of “Green Tires”. We create the rubber technology … and the specialty rubber additives and chemicals … that make it possible to produce fuel-saving “Green Tires”.

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At LANXESS we firmly believe that “Green Tires” are the future of the tire industry. That is why we are today announcing a major investment to convert our rubber plant in Triunfo, Rio Grande do Sul, to the high-performance rubber that is needed to produce “Green Tires”. In a few minutes my colleague, Joachim Grub, head of our Performance Butadiene Rubbers business unit, will brief you on our plant conversion and our “Green Tire” technology. But first, by way of background, I thought it would be helpful if I spoke with you on what LANXESS is now all about.

LANXESS is quite a success story. We began operations as an independent company in 2004. Today we are a member of the DAX index, which makes us one of Germany’s top 30 companies.

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As one of the world’s leading specialty chemicals groups, we develop, manufacture and market high-performance rubbers, high-tech plastics, intermediate products and specialty chemicals. We employ more than 17,100 people in 31 countries and had sales of 8.8 billion euros in 2011.

This slide shows our growth, since the beginning, in terms of real earnings. As you can see we had a record EBITDA in 2011 of one billion, one hundred and forty-six million euros. Our 2012 earnings will be announced in the next few weeks, and I feel confident that they will show another record year. And although times are becoming tougher and the global economic outlook remains murky, …

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We still feel confident that we will meet our recently-set mid-term financial targets of 1.4 billion euros EBITDA pre exceptionals in 2014 … and 1.8 billion euros in 2018.

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From the beginning, one of the keys to our success has been our focus on the world’s fastest-growing markets. Our sales have more than doubled in the countries technically referred to as “emerging markets”. Today the BRICS countries – Brazil, Russia, India, China and South Africa – account for roughly 25 percent of LANXESS sales. Brazil, for instance, accounted for less than 1 percent of LANXESS’ global sales in 2005. This nation now accounts for roughly 10 percent of our global sales. So you can see that our decision to invest here has been rewarded with success. Brazil may have been considered an emerging economy when we began … but it is now one of the world’s leading economies.

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Another key reason for our success has been our ability to capitalize on four global megatrends. Our rubber technology and our high-tech plastics are playing important roles in the rapidly growing mobility megatrend. LANXESS technology in this area is, of course the focus of today’s press conference. Our many products for the construction sector are at work in the urbanization megatrend. Here in Brazil they will be needed for the ongoing construction of modern cities … and they will be very much in demand as Brazil prepares for the World Cup and the Olympics. Our agricultural chemicals are helping to meet the global need for more food. And our water purification products are meeting the global need for clean water.

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Today we are especially proud of the innovative products and technologies that are leading the way to the “Green Mobility” that governments, industry, consumers and our fragile planet now demand. It is LANXESS’ high-performance rubber and LANXESS’ rubber technology that are making “Green Tires” a reality. We also specialize in the high-tech plastics and lightweight materials that allow automobile manufacturers to produce lighter, fuel-saving cars and trucks. Our “Green Mobility” technology is at work in sustainable leather management … … in our many technical rubber products … … in the bio-based raw materials that we use in our production processes here in Brazil and throughout the world …

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… and in the adaptation of biofuels and renewable energy initiatives. Today our “Green Mobility” initiatives account for 17 percent of Group sales. I know that our “Green Mobility” technology is good for the industries we serve … and I am confident that it will be good for the environment that we all share.

We have very solid reasons to focus on “Green Tire” technology. For there is ample statistical data that points to a steady increase in the high-performance segment of the tire industry. This data shows that global production of high-performance tires will increase by 77 percent between 2010 and 2015. And it indicates that fuel-saving tires with lower rolling resistance will, sooner or later, replace regular tires and become the global standard.

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We now see that this is happening sooner rather than later. For clearly there is a global trend towards energy-efficient tires that is rapidly gathering momentum. Among the factors driving the trend are government requirements for fuel efficiency and emissions … including mandatory tire labeling. Tire labeling informs consumers about the safety and fuel-saving benefits of the tires they purchase. In the European Union and in South Korea, mandatory tire labeling of all new tires for fuel efficiency and wet grip has been in effect since 2012. Voluntary tire-labeling standards have been in place in Japan since 2010. In China, fuel-saving tire standards are currently on the agenda.

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In the United States, a law mandating tire labeling was passed several years ago and is awaiting implementation. And here in Brazil, mandatory tire labeling will be implemented in 2016. All tires produced and imported in the country are required to have a label that specifies its quality based on three criteria: fuel efficiency, safety and noise emissions. Tire labeling will inevitably spur the sales of energy-saving tires and in turn demand for Nd-PBR and S-SBR. A study by the Technical University of Munich found that tire labeling in Europe should increase the market share of A- and B-rated tires to 20 or 30 percent by 2017 … and then to 80 percent by 2022.

Ladies and gentlemen … it is really quite appropriate that LANXESS should be taking the lead in the development of the rubber technology that makes possible “Green Tires”.

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For it is our heritage … and it is deeply embedded in our DNA. Over 100 years ago, synthetic rubber was invented by Fritz Hofmann, who was working in the laboratories of our predecessor company. Today the tire industry accounts for 25 percent of LANXESS sales, as we proudly carry on the tradition of Fritz Hofmann. LANXESS is the enabler of “Green Mobility” through excellence in technology and innovation. Our technology is leading the way to the future of the tire industry. Now my colleague, Dr. Grub, will describe the next step we are taking to make “Green Tires” a reality.

Forward-Looking Statements. This news release may contain forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.