Evonik and SIBUR Review Options for Cooperation in the Russian Federation

Evonik Industries AG and SIBUR Holding JSC have started a feasibility study regarding the possible construction of a facility to produce propylene oxide (PO) and hydrogen peroxide (HP) for use in the Russian market. After completing of the study the parties will take a decision on construction, determine location and capacities of the future production site.

The new plant will use the new HPPO process based on oxidizing of propylene with hydrogen peroxide. It will allow to produce PO in a low-cost and environment friendly manner. Evonik and engineering company Uhde jointly developed this HPPO process.

Evonik is the only company that can provide the whole package of technological solutions for HPPO production: the HPPO process, the necessary special catalyst and the raw material, hydrogen peroxide.

Propylene oxide is a precursor material for polyurethane which is used e.g. in instrument panels and cushioning for cars.

If the construction of the PO plant receives approval, Evonik and SIBUR will consider the establishment of a joint venture at the same location for the production of hydrogen peroxide to supply a new plant with raw material. Capacities of the new production will allow not only to supply the PO plant but to meet demands of the Russian and CIS growing markets with hydrogen peroxide for applications primarily in paper and pulp bleaching processes.

«Partnership with Evonik will allow to occupy a sizable share of polyurethane market in Russia as well as to increase technological level of the company with this unique innovative process developed by our German colleagues» Dmitry Konov, SIBUR President said.

Dr. Klaus Engel, Member of Evonik’s Executive Board and responsible for the Chemicals Business Area, explained: «We want to expand our presence with hydrogen peroxide in the region of Eastern Europe. With Sibur, we are co-operating with a reliable and experienced partner who is intimately familiar with this high-growth region.»

For editors:

SIBUR is the largest vertically-integrated petrochemical group in Russia. It incorporates 34 enterprises processing most of Russia’s hydrocarbon feedstock in an integrated production chain, from primary processing to manufacture of consumer products. The sole executive powers are exercised by management company SIBUR LLC. In 2006 earnings of the company comprised 121.9 billion roubles and a net profit was 21.4 billion roubles.

Evonik Industries is the creative industrial group from Germany which operates in three business areas: Chemicals, Energy and Real Estate. Evonik is a global leader in specialty chemicals, an expert in power generation from hard coal and renewable energies, and one of the largest private residential real estate companies in Germany. Evonik is active in over 100 countries around the world. In its fiscal year 2007 about 43,000 employees generated sales of about €14.4 billion and an operating profit (EBIT) of more than €1.3 billion (preliminary figures).

Disclaimer

In so far as forecasts or expectations are expressed in this press release or where our statements concern the future, these forecasts, expectations or statements may involve known or unknown risks and uncertainties. Actual results or developments may vary, depending on changes in the operating environment. Neither Evonik Industries AG nor its group companies assume an obligation to update the forecasts, expectations or statements contained in this release.