10/01/2009 - Süd-Chemie and Geosol form joint venture in Brazilian growth market for foundry, construction and paper additives

Süd-Chemie AG, Munich (Germany), a leading global specialty chemicals company for catalysts, adsorbents and additives, is substantially expanding its position in the Brazilian growth market for bentonite-based additives used in the foundry, construction, and paper industries in a joint venture with the internationally leading and largest Brazilian group in the provision of services for drilling and chemical analysis for the mineral industry, Geosol, headquartered in Belo Horizonte, Brazil.

According to the agreement with Geosol, Süd-Chemie, through its subsidiary Süd-Chemie do Brasil, Jacarei, will initially acquire 26% of the Geosol subsidiary Companhia Brasileira de Bentonita, Vitória da Conquista. Furthermore, it is planned that Süd-Chemie will successively increase its share of the company to 90% in the coming years. The parties have agreed to maintain confidentiality with regard to the purchase price.

The joint venture, currently consisting of more than 70 employees, will produce bentonite-based additives for use in the Brazilian iron ore, foundry, construction, and paper industries. These chemical additives, produced through the refining of the natural clay mineral bentonite, serve as binding agents which assist in enabling or optimizing the production processes in numerous target industries. These products give the moulding sands needed for foundry processes as well as iron ore pellets important in the extraction of iron the necessary stability. They are also used in building projects and tunnel construction for supporting walls, or to increase efficiency in paper production processes.

With the joint venture, Süd-Chemie, as the world's leading manufacturer of bentonite-based speciality chemicals, is expanding its already existing good market position in Brazil and all of Latin America, in particular in the field of foundry, construction and paper additives. In addition to Brazil, Süd-Chemie is active in the bentonite area in Latin America with subsidiaries in Mexico and Peru.

Dr. Hans Jürgen Wernicke, Deputy Chairman of the Managing Board of Süd-Chemie AG, comments: "With Geosol and its subsidiary Companhia Brasileira de Bentonita, we are pleased to have found very well established partners in the Brazilian market. It is our goal to also attain the leading positions in the bentonite market in Brazil, the largest and fastest growing national market in Latin America, just as we have in Europe and Asia. Together with Companhia Brasileira de Bentonita, we will achieve this strategic goal considerably sooner."

João Luiz Carvalho, President of Geosol, comments: "This joint venture with Süd-Chemie is part of the internationalization process at Geosol initiated in 1997. We for example already have a laboratory for geochemical, environmental and metallurgical analysis in partnership with SGS Group from Switzerland. We hope this new partnership with Süd-Chemie will become our next success story and we are highly committed to contributing to our common goal. Süd-Chemie is a strong group, with more than 150 years in the market. I am certain that we will be good partners."

Munich/Germany and Belo Horizonte/Brazil, 1 October 2009

About bentonite-based adsorbents and additives

Bentonite-based adsorbents and additives are used to chemically optimise and upgrade products and processes in a large number of industries, including the food-processing, foundry, detergent, paper and construction and drilling industries. The basic element of these specialty chemicals is bentonite, a natural clay mineral which, due to its individual structure, offers unique properties that are further enhanced following so-called activation during chemical manufacturing processes. Bentonite's most significant property is its ability to bind other chemicals, which is why bentonite-based chemicals are called 'adsorbents' (from the Latin word 'adsorbere' = to bind). In the foundry industry, a key component supplier to the automobile industry, alkaline-activated bentonite is for instance used as a binding agent to add the necessary stability and strength to the moulding-sand mixture that encases metal parts during casting, enabling it to withstand the molten metal. Today, more than 70% of all iron castings, approximately 30% of copper castings and 15% of aluminium castings are manufactured in moulds treated with special-purpose bentonite. In the case of complex building projects, for instance tunnel construction, these specialty chemicals are used to stabilise horizontal boreholes. Due to their specific chemical properties, bentonite additives form a thick suspension with a viscous consistency which both supports boreholes and allows material that has been drilled out to be removed without difficulty. In iron extraction, additives containing bentonite are used as binding agents in order to form fine-grained iron ore into stable iron ore pellets that then can be used for the production of iron and steel, for example. In the paper industry, bentonite-based additives accelerate and optimise the manufacturing process of paper: in what are known as retention systems, they efficiently bind to the water used, thus accelerating the formation of paper fibres; in paper recycling, they bind to impurities in the paper roll, allowing a smooth and secure production process.

About Süd-Chemie

Süd-Chemie (www.sud-chemie.com) is a publicly quoted (Security Identification Number ISIN: DE0007292005; WKN: 729200) specialty chemicals company headquartered in Munich, Germany and operating on a worldwide scale. Key markets served by its Adsorbents Division include the consumer goods, packaging and foundry industries, as well water treatment. Products manufactured by the Catalysts Division offer solutions for the chemical, petrochemical and refinery industries, for energy storage and hydrogen production, as well as off-gas purification. The common denominator of all Süd-Chemie products and services is the efficient and sparing use of natural resources to enhance the quality of life for humans and the environment. The Süd-Chemie Group generated sales of €1.191 billion in 2008, approx. 80% of these outside Germany. At the end of June 2009, the group employed some 6,300 people in its 80 sales and production companies worldwide.