07 Year Third Quarter Lang Sheng Group Leather Chemicals Business Growth

Leverkusen, November 14, 2007 - the third quarter of 2007, the world's leading special chemicals group LANXESS company's growth in China's industry grew by two digits.

Among them, the rubber chemicals business department achieved a three digit growth compared with the same period last year.

The business of butadiene rubber and materials protection business is also growing strongly.

From a global perspective, the third quarter earnings report released by lanxon company shows that the company has made gratifying achievements in the 11 consecutive quarter of growth in 2007.

In the third quarter of 2007, profits and profits before and after the company's regular business increased by 6.7% compared with the same period in 2006, reaching 175 million euros (164 million euros in the third quarter of 2006).

In the conventional business scope calculated in euros, the marginal rate of profit before tax and depreciation reached 10.3%, (9.7% in the third quarter of 2006).

Usually, the marginal rate is weak in the second half of this year, but the profit margin of LANXESS in the regular business scope of this quarter is two digits.

The company's operating indicators (pre tax revenue within the conventional business range) increased by 22.4% to 104 million euros.

From July 2007 to September, the company's net income increased by more than two times over the same period, from 36 million euros to 75 million euros.

"This is the most robust growth in the third quarter of lanxon and has laid a solid foundation for the company's sustained growth in the fourth quarter," said Mr. ha de Man, chairman of the board of directors of LANXESS.

Compared with the same period last year, sales increased from 1 billion 691 million euros in the same period in 2006 to 1 billion 705 million euros.

Excluding business adjustment and exchange rate factors, the company's sales increased by 6%.

In the third quarter, the company successfully increased the price of its products by 1.6%, while the sales volume increased by 4.4% over the same period.

In the third quarter of 2007, the capital expenditure of the company was 59 million euros, a slight decrease compared with 66 million euros in the same period last year.

Lansheng expects that the capital expenditure in 2007 will reach 300 million euros.

The company's net financial liabilities will be reduced from 511 million euros in December 31, 2006 to 491 million euros.

As of September 30, 2007, the number of employees in LANXESS dropped from 16481 to 14659.

This is mainly due to Lanxun's incorporation of its precursor business into the joint venture INEOSABS Limited (Jersey) with INEOS, a British chemical company, and the Borchers group.

Regional business trends in Germany, lanxon company's sales in the third quarter of 2007 increased by 5.3% to 421 million euros (400 million euros in the third quarter of 2006).

Sales in Germany, Europe, the Middle East and Africa increased by 0.8% to 532 million euros (third euros in the third quarter of 2006).

Benefiting from the strong growth trend in the Eastern European market, lanxon set up a sales company in Bratislava in Slovakia in October 2007.

In the Americas, sales were 427 million euros, down 4% compared with 445 million euros in the same period last year.

After deducting product line adjustment and exchange rate factors, sales increased by 8.1% compared with the same period last year.

All business segments in North America and Latin America contributed to this good performance.

In the Asia Pacific region, sales in the third quarter of 2007 increased by 2.2% to 325 million euros (318 million euros in the third quarter of 2006).

Compared with the same period last year, sales growth was up to 6% after deducting exchange rate factors and factors of last year's business divestiture.

According to this calculation, the proportion of sales in the company's overall market share increased from 18.8% to 19.1%, reaching the highest level in history.

China has once again become the driving force for growth, and its sales have once again achieved two digit growth.

The business sector information is the same as that of the previous quarter, and the high performance polymer business sector is booming, with sales up 3.6% over the previous year, reaching 667 million euros (third euros in the third quarter of 2006).

This good performance stems from the price rise and sales promotion of all the business departments under its jurisdiction.

Ding Ji rubber business performance is particularly prominent, its third quarter sales growth rate above average.

The business department, which benefited from the operation of the business sector, is enjoying a favorable trend. The pre tax revenue of the sector's normal business range increased by 21.8% compared to the same period last year, reaching 95 million euros (third euros in the third quarter of 2006).

The marginal revenue rate of profit and tax before depreciation is increased by 2.1% to 14.2% (calculated in euros).

Sales of high quality intermediate business segments also increased by 8.8% over the same period last year, from 274 million euros in the same period of 2006 to 298 million euros.

Benefiting from the good performance of agricultural intermediate products, the basic chemicals business department has been growing gratifying, and sales growth has further consolidated its position in the highly competitive North American market.

Sales volume of agro chemicals and specialty chemicals under Saltigo business has increased, but sales of pharmaceutical intermediates have declined.

The pre tax income of the sector in the conventional business range was 41 million euros, compared with last year, and the marginal profit rate before and after the normal business scope decreased from 15% to 13.8%.

The high performance chemicals business sector was stable in the third quarter of 2007.

Sales fell by 6.6%, to 493 million euros, due to the adverse effects of the spin off of textile chemicals business and exchange rate changes.

However, after deducting the above factors, the year-on-year increase of 3.4%.

This growth has benefited mainly from the growth of leather chemicals, Rhine chemicals, rubber chemicals and ion exchange resin business.

As a result of the divestiture factor of the textile chemicals business, compared with the same period last year, the business sector's profit and earnings before the conventional business fell by 5.6%, to 67 million euros (third euros in the third quarter of 2006).

However, the marginal rate of profit and tax and depreciation before its regular business increased slightly, reaching 13.6% (13.4% in the third quarter of 2006).

With the divestiture of the polymer business division, the operating income of the engineering plastics business sector will no longer be included in the company's financial data since the fourth quarter of 2007.

Sales in the third quarter amounted to 224 million euros, up 3.2% from the same period last year, but the profit and earnings before the normal business range were lower than expected, only 2 million euros.

The 2007 full year outlook for lanxon expects that the global economy will continue to grow in the fourth quarter of 2007, but there will be differences between regions.

Although the growth in the US market is expected to slow down, the global chemical industry will benefit from strong demand in the Asia Pacific region and Latin America, and the business environment in Europe will remain relatively stable.

Taking into account the above situation, even if the income of the polymer business department is reduced due to divestiture, lanxon expects that the pre tax income will be between 700 million euros and 720 million euros (675 million euros in the same period in 2006) in the regular business scope of the year 2007.