WACKER FINE CHEMICALS

WACKER FINE CHEMICALS generated total sales of €97.7 million (2007: €112.4 million) in 2008, down 13.1% year on year due to consolidation measures. WACKER stopped making some of its custom fine chemicals and catalog products. Higher sales of biotech products, such as biologics, cyclodextrins and cysteine, did not quite compensate for the shortfall. Europe continues to account for the largest share of divisional sales.

WACKER FINE CHEMICALS’ 2008 EBITDA was almost at the prior-year level, dropping 3.2% to €9.2 million (2007: €9.5 million). The EBITDA margin was 9.4% (2007: 8.5%). Divisional earnings were positively impacted by the successful consolidation of chemical activities and demand for cyclodextrins and cysteine. WACKER FINE CHEMICALS is the world’s only supplier of cysteine made from plant-based raw materials in a fermentative production process.

EBITDA Margin Improved Despite Lower Sales

In 2008, the division’s capital expenditures amounted to €16.5 million (2007: €7.5 million). Spending focused on the ongoing expansion of its Jena (Germany) and Eddyville (Iowa, USA) sites. The division completed Jena’s new lab facilities on schedule in late 2008 and is continuing to expand its existing biologics production facility there. The cyclodextrin production plant in Eddyville has been extended.

WACKER FINE CHEMICALS and MorphoSys AG are intensifying their collaboration for using WACKER’s secretion technology to produce antibodies. This unique and highly efficient technology was also the basis for acquiring several new customer projects.

WACKER FINE CHEMICALS had 259 employees on December 31, 2008 (December 31, 2007: 245).