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Süd-Chemie and Ashland agree on expanded joint venture serving foundry chemical sector

Süd-Chemie and Ashland to merge worldwide foundry chemical activities under the name ASK Chemicals

Süd-Chemie AG, Munich (Germany), and Ashland Inc. (NYSE:ASH), with headquarters in Covington, Kentucky (USA), have reached contractual agreement on the formation of a global joint venture to merge their business activities in the foundry chemicals sector. The joint venture will be known as ASK Chemicals GmbH and will be headquartered in Hilden, Germany. Süd-Chemie and Ashland will each hold a fifty-percent share in ASK Chemicals, while the operational management leadership will lie with Süd-Chemie.

This joint venture will employ approximately 1,300 people. Were it to have been in operation through the first six months of calendar year 2010, it would have generated total sales of about €240 million, or around $300 million – numbers reflecting that while the global foundry market saw moderate activity in Q1, it gained considerable momentum in Q2.

Süd-Chemie and Ashland are currently partners in Ashland-Südchemie-Kernfest GmbH, a foundry chemicals company operating successfully in Europe since its formation in 1970. The global joint venture will be comprised of three parts: Ashland-Südchemie-Kernfest, substantially all assets and employees of Süd-Chemie´s business unit for Foundry Products and Specialty Resins and Ashland´s Casting Solutions business unit. The transaction is expected to close towards the end of calendar year 2010, subject to customary closing conditions including regulatory reviews.

The expanded joint venture will combine Süd-Chemie´s and Ashland´s sales and marketing, product development units and production assets with those of the Ashland-Südchemie-Kernfest joint venture. The new joint venture will have considerable growth potential as a result of uniting the foundry know-how of the partners and expanding the use of existing distribution channels and market synergies in Europe, the Americas and Asia. The joint venture will systematically pursue elements of the partner´s existing strategies aimed at expanding and strengthening market positions based on high-quality, full-service solutions to meet the rising global demands of modern-day foundries.

When established, the joint venture will be able to offer its customers holistic solutions and customized innovative consultancy services. It will demonstrate a high degree of customer orientation and specific knowledge of customers’ production processes, coupled with proven expertise in research and development and application engineering for foundry chemistry. The product range will include resins, binding agents, finishing tools, additives, feeder heads, filters, separating agents, metallurgical additives and cores. In addition, the joint venture will continue the partners’ demonstrated success as an innovator of environmentally-friendly, i.e. emission-free and emission-reducing, moulding processes.

Dr. Günter von Au, managing board chairman of Süd-Chemie AG, said: "Amalgamating Süd-Chemie´s foundry chemical operations with those of our long-standing partner, Ashland, will enhance our mutual service capabilities not only in established markets in Europe and North America, but also in newly industrializing countries recording dynamic growth, such as China, India and Brazil. Together, we shall be in a better position to meet the high technological demands of our worldwide customers based on innovative solutions and targeted efficiency enhancement. As a result, we will benefit more quickly from the growth potential offered in the foundry sector."

Said James J. O'Brien, Ashland chairman and chief executive officer, “Today’s step to globally expand the longstanding joint venture partnership of Ashland and Süd-Chemie creates significant opportunities for both partners. The product offerings and geographic footprints of these companies are very complementary to one another, giving this new joint venture the benefit of well-established channels to market and a much more comprehensive portfolio of metal casting additives and consumables with which to serve customers worldwide."

Operations merging into the ASK Chemicals GmbH joint venture are the Casting Solutions business unit of Ashland Inc., including assets in the United States, Canada, Mexico, Brazil, China, Japan, the UK, Spain, Portugal, Italy, India and Korea; Süd Chemie's Foundry Products and Specialty Resins business unit including the Süd-Chemie subsidiaries SKW Giesserei GmbH, WD-Giesserei-Technik GmbH, Tecpro Corporation Inc., Süd-Chemie Hi-Tech Ceramics Inc., Ajay Metachem Süd-Chemie Pvt. Ltd., parts of Jiangsu Süd-Chemie Chemical Materials Co., Ltd. and the companies belonging to the existing joint venture, Ashland-Südchemie-Kernfest GmbH, and its subsidiaries (AS Group).



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