Wacker Chemie AG

WACKER CONTINUES EXPANSION OF POLYSILICON PRODUCTION AT ITS BURGHAUSEN SITE

- DECISION TO EXPAND NOMINAL PRODUCTION CAPACITY BY ANOTHER 4,500 METRIC TONS PER YEAR - SOLAR-SECTOR DEMAND FOR POLYSILICON EXPECTED TO SHOW FURTHER RAPID GROWTH - CAPITAL EXPENDITURES OF ABOUT €300 MILLION ARE ESTIMATED TO CREATE SOME 270 JOBS - CEO PETER-ALEXANDER WACKER: “WE’VE REACHED ANOTHER MILESTONE IN OUR GROUP’S LONG-TERM STRATEGY FOR PROFITABLE GROWTH”

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WACKER plans to expand its annual polysilicon production capacity at Burghausen by an additional 4,500 metric tons to a total of 14,500 metric tons by the end of 2009. The Munich-based chemical company made this decision today. WACKER had already initiated polysilicon expansion measures to increase nominal production capacity from currently 5,500 metric tons/year to an estimated 10,000 metric tons by early 2008. First material for sale from the new, so-called "capacity expansion stage 7" is expected to be available in Q4 2008. The new plant is scheduled to reach full capacity until end of 2009. WACKER has earmarked capital expenditures of around EUR300 million for this project, which is expected to create some 270 jobs.

By expanding its output, WACKER intends to meet soaring global demand for hyperpure polycrystalline silicon. The main growth driver is the solar industry, which requires silicon for the manufacture of solar cells. WACKER forecasts further solar-market growth over the next four years. Consequently, it expects solar-sector polysilicon demand to increase at an annual double-digit rate. As for the electronics sector, WACKER is expecting a high single-digit rise of polysilicon demand.

"Today’s expansion decision is another milestone to deliver on the Group’s long-term strategy for profitable growth," said Dr. Peter-Alexander Wacker, the Group’s president and CEO. "We are already the world’s second-largest polysilicon producer and plan to become market leader. We want to practically triple our polysilicon production capacity by the end of 2009. Also, we consider this project a major contribution to accelerate growth in the solar industry," added the CEO.

"Burghausen was chosen as the site for this expansion stage in the face of considerable intra-Group competition from European and North American locations," said Dr. Ewald Schindlbeck, president of WACKER POLYSILICON. "Extensive studies prior to this investment decision showed that Burghausen was the right choice," he explained, "not only from an economic point of view, but also due to the speed of constructing the new plant there."

Key factors in Burghausen’s favor were agreements concluded between management, employee representatives and the IG-BCE trade union about cost-saving measures and further increases in worktime flexibility. The negotiating parties agreed, for a period of five years, to fix starting salaries for new Burghausen employees at 90 percent of the standard rate. They also decided to expand the flexi-time period for Burghausen employees from the current one year to three years. This will allow more flexibility in the face of order fluctuations.

WACKER has been producing hyperpure polycrystalline silicon for the semiconductor industry at its Burghausen site for over 50 years. With solar-silicon demand rising, WACKER POLYSILICON has been increasing sales to the photovoltaics industry over the past six years while expanding capacity step by step.

This press release contains forward looking statements based on assumptions and estimates of WACKER's Executive Board. Although we assume the expectations in these forward looking statements are realistic, we cannot guarantee they will prove to be correct. The assumptions may harbor risks and uncertainties that may cause the actual figures to differ considerably from the forward looking statements. Factors that may cause such discrepancies include, among other things, changes in the economic and business environment, variations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services, and changes in corporate strategy. WACKER does not plan to update the forward looking statements, nor does it assume the obligation to do so.

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ots Originaltext: Wacker Chemie AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Christof Bachmair
+49 (0)89 6279 1830
christof.bachmair@wacker.com

Branche: Chemicals
ISIN:      DE000WCH8881
WKN:        WCH888
Index:    CDAX
Börsen:  Frankfurter Wertpapierbörse / official dealing/prime standard
              Börse Berlin-Bremen / free trade
              Hamburger Wertpapierbörse / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Bayerische Börse / free trade



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