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Electronics Production | December 15, 2005

German-Asian LCD-material cooperation

Germany based Degussa and Taiwan based Forhouse Invest in Growth Market for Flat Panel Display. Contracts signed for establishment of a joint venture for manufacturing polymethyl methacrylate molding compounds
Degussa AG and Forhouse Corporation, Taichung/Taiwan, have signed agreements concerning the establishment of a joint venture for manufacturing polymethyl methacrylate (PMMA) molding compounds. The joint venture, in which Degussa will hold 51 percent and Forhouse 49 percent, will be launched in January 2006 following its establishment and after the required approvals have been obtained. The joint venture will build a plant for manufacturing optical-grade PMMA molding compounds for applications in display technology.

Dr. Manfred Spindler, Head of Degussa's Division Specialty Polymers, considers the signature of the joint venture agreement as an important milestone on the road to implementing global growth targets: "This strategic partnership strengthens our market position with PMMA in Asia. Our local presence is an excellent basis for harnessing new, lucrative market segments together with Forhouse."

Forhouse CEO Francis Pan opines: "We successfully adopted a backward integration strategy in 2004, making extruded optical-grade sheet material, including a kind of advanced composite (multi-layered) sheet. And now, Forhouse is continuing backward integration toward the raw material. This strategy will make Forhouse very competitive in the backlight module manufacturing business for the TFT-LCD industry."

In the first construction step, the new plant will have a production capacity of around 40,000 metric tons. An industrial compound near Taichung/ Taiwan, is the preferred factory site. When the plant goes into operation at the end of 2006, Degussa and Forhouse will contribute a significant share of the high-quality lighting modules known as backlight units to the rapidly expanding global market for TFT-LCD (Thin-Film-Transistor Liquid-Crystal Display) flat panel displays.

One of the joint venture's special advantages is that it combines the core competencies of both companies. Degussa's comprehensive know-how along the entire process chain of methacrylate chemistry enables its partner to position itself in technology-driven markets for electronics applications through the joint development of innovative products. Moreover, Degussa's global production and logistics network ensures continuous provision of the requisite capacities and grades of methyl methacrylate, an intermediate used for manufacturing PMMA.

Forhouse employs state-of-the-art plant technology at its production sites in Taiwan and China, and is therefore in an ideal position to meet the growing demand of flat panel display manufacturers particularly in Taiwan, Korea, Japan and China. As one of Taiwan's leading companies in the field of optical electronics, Forhouse possesses excellent knowledge of the market and outstanding technical support skills. This joint venture partner already manufactures more than ten percent of the backlight units employed around the globe.

Gregor Hetzke, Head of Degussa's Methacrylates Business Unit, underlines that this production joint venture marks the beginning of closer cooperation. In his opinion, one of the major competitive advantages is the access Forhouse provides to the end-customer market. "In the future, we can integrate our customers' requirements more directly into product development. That means innovations will be brought to mass production stage faster and more
cost-effectively."

Degussa is a leading global supplier of PMMA molding compounds for extrusion and injection molding applications. The PLEXIGLAS(R) molding compounds specially developed for use in TFT-LCD flat panel displays are characterized by their excellent optical properties and high quality. These product benefits ensure optimum illumination of TFT-LCDs for notebooks, PC and TV monitors.

Taiwanese joint venture partner Forhouse was established in 1989 and is one of the leading manufacturers of lighting modules for flat-screen monitors. The owner-managed company is listed on Taipei Stock Exchange and achieved sales of more than 220 million euros in 2004 with approx. 5,000 employees. To safeguard its further growth, Forhouse has performed successful backward integration of sheet extrusion and is now investing together with Degussa in the new production plant for PMMA molding compounds.

Degussa's PMMA Molding Compounds are marketed under the PLEXIGLAS(R) trademark worldwide except for the Americas (marketed in the Americas under the ACRYLITE(R) trademark of Cyro Industries).

Degussa is a global market leader in specialty chemicals. Our innovative products and system solutions make an indispensable contribution to our customers' success, which we sum up by our claim "creating essentials". In fiscal 2004 Degussa's 45,000 employees worldwide generated sales of 11.2 billion euros and operating profits (EBIT) of 965 million euros.

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