SGL-Mitsubishi Rayon Joint Venture Start Production of Carbon Fibre Raw Materials

MRC SGL Precursor Co. Ltd. (MSP) - the joint venture between Mitsubishi Rayon Co. Ltd. (MRC) and SGL Group - has successfully and on schedule started its production of precursor, the raw material for carbon fibers.

The joint venture plant in Otake was not affected by the earthquake in Japan. Dr. Jürgen Köhler, Chairman of SGL Group's Business Unit Carbon Fibers & Composite Materials: "The objective of our joint venture with Mitsubishi Rayon is to ensure the exclusive 50k precursor supply for SGL Group and consequently also for SGL Automotive Carbon Fibers, our joint venture with the BMW Group. Thanks to the close cooperation with our partner Mitsubishi Rayon, we were able to set up the new precursor production within the challenging time schedule as announced one year ago. We are now ready to provide precursor, which is a key success factor for the carbon fibers and fabrics used in the new BMW i3."

Takahiro Ono, Representative Director of MSP: "We are proud to be a partner of SGL Group and the BMW Group in this milestone project for the automotive industry. We did everything possible to fulfill the high expectations of SGL Automotive Carbon Fibers and meet the tight schedule during these difficult times."

The joint venture has successfully completed the commissioning phase and has assumed commercial production of precursor. MSP is based at the MRC production site in Otake/Japan and will deliver first commercial quantities of polyacrylonitrile (PAN) based precursor to SGL Automotive Carbon Fibers (SGL ACF) in the second quarter of this year.

Global Supply Chain: Japan - North America - Germany The precursor manufactured by MSP in Otake will be converted to carbon fibers at the SGL ACF plant in Moses Lake (WA/USA), where SGL ACF is currently building a new grass root carbon fiber plant with an annual capacity of approximately 3,000 tons. Start of production is scheduled for the 3rd quarter 2011. These fibers will then be processed into lightweight carbon fiber fabrics at the second SGL ACF site in Wackersdorf (Germany). The carbon fiber composite parts (CFRP) will be made from these fabrics at the BMW Group plant in Landshut (Germany). The assembly of the Megacity Vehicle - which will be launched in 2013 as BMW i3 - will take place at the BMW Group plant in Leipzig (Germany).

The precursor is a critical success factor for the production of carbon fibers. Mitsubishi Rayon has already been a supplier of precursor to SGL Group for many years. The targeted 50k precursor has been tailored to meet the needs of the automotive industry, particularly in terms of quality and cost efficiency.

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