Breakthrough in hydrogen peroxide business

Dusseldorf (ots) - Degussa AG, Dusseldorf, has achieved a
far-reaching breakthrough in its hydrogen peroxide business (H2O2).
With an annual capacity exceeding 550,000 tonnes, the specialty
chemicals company is the world's second-largest producer of this
environmentally-compatible bleaching and oxidization agent. Degussa's
hydrogen peroxide activities are a significant growth field of its
Building Blocks Business Unit, generating sales of 1.1 billion euros
in 2005 with around 4,500 employees.

Degussa and Uhde sell license for production of propylene oxide to
Korean firm SKC

Together with the high-tech engineering company Uhde, Dortmund,
Degussa has developed an innovative process for producing propylene
oxide (PO) from H2O2, the so-called HPPO process. The Korean company
SKC, Seoul, has now acquired a license for this. SKC is to bring a
HPPO facility on stream at its site in the Korean town of Ulsan at
the beginning of 2008 with an annual capacity of 100,000 tonnes. The
Korean chemical company intends the facility to service the strongly
growing demand for PO in the Asian market. PO is a raw material for
polyurethane, which is used in car fittings and seat upholstery, for
example.

DegussaHeadwaters Korea acquires hydrogen peroxide facility and
agrees exclusive supply contract

DegussaHeadwaters Korea - a joint venture in which Degussa and the
American company Headwaters, Inc., South Jordan, Utah, each holds 50
percent - will exclusively supply the new PO facility in
Ulsan with hydrogen peroxide. To enable this the joint venture is
acquiring a hydrogen peroxide facility in Ulsan from the Finnish
company Kemira Oyj, Helsinki. The transaction remains subject to
regulatory approvals. DegussaHeadwaters Korea will more than double
the annual capacity of this facility from its current 34,000 tonnes.
The joint venture's aim is to further expand its market position,
especially in the dynamic economic region of Asia.

Degussa Management Board Chairman Prof. Utz-Hellmuth Felcht
states: "Our successful process innovation has opened up a gateway to
an extremely attractive growth market for Degussa: In future,
hydrogen peroxide will not only be used to bleach paper and pulp but
also employed in large quantities for chemical synthesis." The major
propylene oxide producers are already planning for their facilities
to have an annual capacity of at least 250,000 tonnes of PO. These
would each require more than 180,000 tonnes of H2O2 a year.

During the innovative Degussa-Uhde HPPO process, H2O2 and
propylene react to PO when a special catalyst, also supplied by
Degussa, is used. A significantly lower investment volume makes this
technology much more economically viable than the production process
currently employed. In addition, it is extremely environmentally
compatible because apart from water no significant quantities of
by-products are produced.

Catalytic direct synthesis of H2O2 as another milestone

Parallel to this progress now achieved, Degussa is also working on
another milestone with Headwaters, namely the catalytic direct
synthesis of H2O2 (DSHP). This DegussaHeadwaters direct synthesis
process will be commercially available starting 2007. The combination
of the HPPO process with DSHP offers additional cost advantages over
conventional propylene oxide manufacturing processes.

Degussa is the global market leader in specialty chemicals. Our
business is creating essentials-innovative products and system
solutions that make indispensable contributions to our customers'
success. In fiscal 2005 around 44,000 employees worldwide generated
sales of 11.8 billion euros and operating profits (EBIT) of 940
million euros.

Originaltext: Degussa AG
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ISIN: DE0005421903

Contact:

Hannelore Gantzer
Spokeswoman
Corporate Communications
T +49-211-65041-368
F +49-211-65041-527
hannelore.gantzer@degussa.com

Dr. Edda Schulze
Communication Services
T +49-69-218-2712
F +49-69-218-3849
edda.schulze@degussa.com