Lanxess to Acquire Chrome Chemicals Business from Dow Chemicals

Chemicals group LANXESS is purchasing the chrome chemicals activities of The Dow Chemical Company in South Africa. LANXESS is to acquire the 50% interest in Chrome International South Africa (CISA), Newcastle, South Africa, which The Dow Chemical Company currently owns through its subsidiary Sentrachem. The remaining 50% of CISA is already owned by LANXESS. It has been agreed not to disclose the purchase price. Closing of the transaction, which is subject to the approval of the antitrust authorities and the Board of The Dow Chemical Company, is expected for the first quarter of 2007.

Said LANXESS Management Board Chairman Axel C. Heitmann: “This first acquisition in our history gives LANXESS a complete value chain from chromium ore to leather tanning materials, along with sole ownership of the world’s most modern processing facility for the precursor of tanning materials. This further strengthens the profitability of the Leather business unit’s chrome chemicals business.”

CISA was established in the mid-1990s and employs some 120 people. Its 2005 sales were equivalent to about EUR 40 million. The plant, which came on stream in 1999, produces 70,000 tons of sodium dichromate per year. This chemical compound is used mainly in the production of tanning materials for leather. CISA’s raw materials come from a chromium mine at Rustenburg, South Africa. CISA’s main customers are LANXESS’s production facility for chrome tanning materials in Merebank, South Africa, and LANXESS’s Inorganic Pigments business unit.

The Leather business unit, one of the leading suppliers to the global leather industry, currently has a workforce of over 1,000, including 330 employees in South Africa. After the CISA employees are integrated into the LANXESS Group, significantly more than a third of the Leather business unit’s employees will be based in South Africa.

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