Lanxess Fact Book 2004

BREAK
Fact Book
Leverkusen, 2004-11-26
Update February 2005 THROUGH
Disclaimer
This document does not constitute an offer or invitation to purchase or subscribe for any securities, and neither this document nor anything contained
herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. In particular, these materials are not an
offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from
registration under the U.S. Securities Act of 1933, as amended. Neither LANXESS AG nor Bayer AG intends to register any securities of LANXESS
AG in the United States or to conduct a public offering of securities in any jurisdiction, including the United States. The listing of the Company’s shares
on the official market of the Frankfurt Stock Exchange (Prime Standard) will be based on a listing prospectus to be published by the Company in due
course.
Neither this document nor any copy of it may be taken or transmitted into the United States or distributed in the United States. Any failure to comply
with this restriction may constitute a violation of the U.S. securities laws.
This document is being distributed in the United Kingdom only to investment professionals falling within article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2001 (the ”Order”), high net worth companies, and other persons to whom it may lawfully be
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inform themselves about, and observe, any such restrictions.
Please note that this Analyst Presentation (including any information contained herein and any information, whether or not in writing, supplied in
connection therewith) is strictly confidential.
This Analyst Presentation has been prepared by LANXESS AG (the ”Company”) and is furnished to you solely for your information and may not be
reproduced or redistributed, in whole or in part, to any other person.
No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the
information contained herein and, accordingly, none of the Company, Deutsche Bank Aktiengesellschaft (”Deutsche Bank”), Morgan Stanley Bank AG
(”Morgan Stanley”) or any of its parent or subsidiary undertakings or any of such person’s officers, directors or employees accepts any liability
whatsoever arising directly or indirectly from the use of this document.
This Analyst Presentation contains certain forward-looking statements, including assumptions, opinions and views of the Company or cited from third
party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or
performance of the company to differ materially from the estimations expressed or implied herein. None of the Company, Deutsche Bank and Morgan
Stanley guarantees that the assumptions underlying such forward looking statements are free from errors nor do they accept any responsibility for the
future accuracy of the opinions expressed in this Analyst Presentation or the actual occurrence of the forecasted developments.
No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections,
estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained
herein, and, accordingly, none of the Company, Deutsche Bank and Morgan Stanley or any of its parent or subsidiary undertakings or any of such
person’s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
By accepting this Analyst Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market
position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future
performance of the Company’s business.
This Analyst Presentation speaks as of November 26, 2004 (Update February 2005). Neither the delivery of this Analyst Presentation nor any further
discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the
affairs of the Company since such date.
2
List of abbreviations - I
1H First Half (of a year)
ABS Acrylonitrile Butadiene Styrene
AC Anorganische Chemie (Inorganic Chemicals)
act. activities
ADPA Aminodiphenylamine
AG Aktiengesellschaft
AI Anorganische Industrieprodukte
Amort. Amortisation
APAC Asia Pacific
ASA Acrylonitrile Styrene Acrylate
ASA Alkenyl Succenic Anhydride
ASRC American Synthetic Rubber Company
BAC Basic Chemicals
BASF Badische Anilin und Soda Fabrik
BBS Bayer Business Services
BIS Bayer Industry Services
bn billion
BTR Butyl Rubber
BTS Bayer Technology Services
BU Business Unit
3
List of abbreviations - II
ca. circa
CAGR Compound Annual Growth Rate
Capex Capital expenditure
CEH Chemical Economics Handbook
CEO Chief Executive Officer
CFO Chief Financial Officer
CFS Combined Financial Statements
Chg. Change
cGMP Current Good Manufacturing Practice
CHT CHT R. Beitlich GmbH
CIBA (Gesellschaft für) Chemische Industrie Basel
CPF Composite Production Flow
CPL Caprolactam
CR Chloroprene Rubber
CXO Cyclohexanone/Cyclohexanol
Degussa Deutsche Gold- & Silber-Scheide-Anstalt
Depr. Depreciation
DIN Deutsche Industrienorm
DSM De Nederlandse Staatsmijnen
4
List of abbreviations - III
€ Euro
EBIT Earnings before interest and tax
EBITDA Earnings before interests, tax, depreciation and amortisation
e.g. exempli gratia (Latin: for example)
EKA Elektrokemiska Aktiebolaget
EMEA Europe, Middle East and Africa
EPA Environmental Protection Agency
EPDM Ethylene Propylene-diene Rubber
EPS Earnings per share
E-SBR Emulsion Styrene Butadiene Rubber
EU European Union
EVM Ethylene Vinyl Acetate Rubber
FCC Functional Chemicals
FCH Fine Chemicals
FDA Food and Drug Administration
FIB Fibers
FMC Food Machinery Corporation
FRNC Flame Retardant Non-Corrosive (cable)
FWA Fluorescent Whitening Agent
FX Foreign Exchange
5
List of abbreviations - IV
GDP Gross domestic product
GmbH Gesellschaft mit beschränkter Haftung
GVW Garnveredlungswerke (Goch)
HMR Hoechst Marion Roussel
HNBR Hydrogenated Acrylonitrile Butadiene Rubber
ICI Imperial Chemical Industries
i.e. id est (Latin: that is)
ION Ion Exchange Resins
IISRP International Institute of Synthetic Rubber Producers
IP Intellectual Property
IPG Inorganic Pigments
IPO Initial Public Offering
iSL Industrie Spezial Lacke
ISO International Organization for Standardization
IT Information Technology
JSR Japan Synthetic Rubber
JV Joint Venture
KA-Oil Ketone-alcohol oil (mixture of cyclohexanone and cyclophexanol)
kt kilotons (1,000 metric tons)
6
List of abbreviations – V
LATAM Latin America
LEA Leather
LG Lucky Goldstar Corporation
LOA Lubricant Oil Additives
LS Lackrohstoffe (Coatings and Colorants)
LXS LANXESS
m million
M month
MDI Methylene Diphenylene Diisocyanate
MPP Material Protection Products
M&A Mergers and Acquisitions
NAFTA North American Free Trade Area
Nalco National Aluminate Corporation
NBR Nitrile Butadiene Rubber
NJ New Jersey
NKNK Nizhnekamskneftekhim
n.m. not meaningful
No. number
OBA Optical Brightening Agent
OH Ohio
7
List of abbreviations - VI
p.a. per annum
PA Pennsylvania
PA Polyamide
PAP Paper
PBR Polybutadiene Rubber
PBT Polybutylene Terephthalate
PC personal care
PPD Paraphenylene Diamine
PET Polyethylene Terephthalate
PK former Bayer business unit (Pigments and Ceramics)
plc Public Limited Company
PU Polyurethane
PVC Polyvinyl Chloride
Q1 First quarter (of a year)
R&D Research and development
REACH Registration, Evaluation and Authorization of Chemicals
RCH RheinChemie
R/O reverse osmosis
RoW Rest of World
RUC Rubber Chemicals
8
List of abbreviations - VII
S/A Sociedade Anónima
SAN Styrene Acrylonitrile
SC South Carolina
SCP Semi-Crystalline Products
SCUP Specialty Chemicals Update Program
SETA Sociedade Extractiva Tanino da Acácia Ltda
SG&A Sales, General and Administration
SINOPEC China Petrochemical Corporation
SRI Stanford Research Institute
S-SBR Solution Styrene Butadiene Rubber
STY Styrenic Resins
TA-Luft Technische Anleitung zur Reinhaltung der Luft
TFL Together for Leather
TMQ Trimethyl Quinoline
TPC Textile Processing Chemicals
TRP Technical Rubber Products
TX Texas
UK United Kingdom
U.S. United States
USA United States of America
w/o without
WTO World Trade Organisation
WV West Virginia
9
Overview
Performance Rubber
Engineering Plastics
Chemical Intermediates
Performance Chemicals
10
Board of Management
Dr. Axel Claus Heitmann (CEO)

Axel C. Heitmann was born on October 2, 1959 in Hamburg,
Germany. He studied chemistry at Hamburg University and
the University of Southampton (United Kingdom), obtaining a
science doctorate in 1988. He joined Bayer in 1989 where he
entered the post-graduate trainee program. Between 1989
and 1991 he held various positions in the Central Research
Division, and in the Applications Development and
Manufacturing sections of the Rubber Business Group.
Following two years as a plant manager, he transferred to

Bayer plc in the United Kingdom as Manager of the Rubber
Business Group's Bromsgrove site. In 1996 Heitmann was
appointed Head of Manufacturing and Technology at
PolymerLatex, the then newly formed joint venture between
Bayer and Degussa. From March 1999 to January 31, 2002,
Mr Heitmann was Head of the Wolff Walsrode Business
Group. He was then appointed General Manager of the
Rubber Business Group at Bayer AG. In July 2002, he
became a member of the Executive Committee of Bayer
MaterialScience.
On September 16, 2004, Axel C. Heitmann has been named
as the CEO of LANXESS AG.
Mr Heitmann is married and has two children.
11
Board of Management
Dr. Ulrich Koemm

Ulrich Koemm was born on October 20, 1950. He studied
at the Technical University of Munich and completed his
doctorate there. He first worked on the scientific staff at the
University of Kaiserslautern before joining Bayer in 1980
as a laboratory manager in the Research Department of
the Inorganic Chemicals (AC) Business Group. Between
1983 and 1986, he was a research team leader in this
department before moving to AC Manufacturing where he
managed the chrome plant and headed the fluorine
department.
In 1988, Koemm was transferred to Bayer do Brazil where

he was the local general manager of the AC, LS and
Pigments and Ceramics (PK) Business Groups. When he
returned to Leverkusen in 1992, he became head of
manufacturing in the PK Business Group. In 1994, he was
made head of manufacturing in the Inorganics (AI)
Business Group and in 1997 he took over the responsibility
for the Business Unit Inorganic Pigments. In 1998 he
became head of the Business Group Inorganics. In April
1999 he took over the position as General Manager of the
Coatings and Colorants (LS) Business Group at Bayer AG.
On September 16, 2004, Ulrich Koemm has been named

as member of the Board of Management of LANXESS AG.
Mr Koemm is married and has four children.
12
Board of Management
Dr. Martin Wienkenhöver

Martin Wienkenhöver was born on August 1, 1956 and
attended high school in Lengerich, Germany. He studied
chemistry at the Westfälische Wilhelms University in
Münster.
Having obtained his doctorate, he joined Bayer AG in 1985
as head of a development and formulating laboratory in the
former Dyes and Pigments Business Group. A year later he
became a laboratory manager in dyes and pigments
research. In 1988 Mr Wienkenhöver moved to Bayer's U.S.
subsidiary Mobay Corporation (now part of Bayer
Corporation), initially as Group Leader R&D in the Dyes and
Pigments Division and from 1992 as Head of R&D in the
Organic Products Division. He returned to Bayer's
headquarters in Leverkusen in 1993 where he was in charge
first of dyes and pigments development and later of key
account management in dyes and pigments marketing. He
subsequently worked for DyStar Textilfarben GmbH, at that
time a 50:50 joint venture of Bayer and Hoechst, where he
was in charge of the Reactive Dyes Business Unit.
In April 1999 he was appointed General Manager of the

Basic and Fine Chemicals Business Group at Bayer AG. On
September 16, 2004, Martin Wienkenhöver has been named
as member of the Board of Management of LANXESS AG.
Mr Wienkenhöver is married and has four children.
13
Board of Management
Matthias Zachert (CFO)

Matthias Zachert was born in Bonn, Germany on November
8, 1967. After graduating from high school, he trained as a
commercial assistant at the then Mercedes Benz AG in
Stuttgart. From 1990 to 1995, he studied business
administration, specialising in finance. During that time, he
also spent periods in the United States and France.
He subsequently joined the International Management

Program of what was then Hoechst AG, and, in 1996,
became head of a special IPO project to establish the
Hoechst Marion Roussel (HMR) pharmaceutical business as
a separate legal entity world-wide. After holding a number of
other management positions at HMR, he assumed
responsibility in 1999 for the integration of the finance
organisations of the two pharmaceutical companies HMR
and Rhône-Poulenc Rorer, which subsequently became
Aventis Pharma as part of the merger between Hoechst and
Rhône-Poulenc. In January 2000, Matthias Zachert was
appointed Chief Financial Officer of the Region International
of this company, headquartered in Paris.
In summer 2002, he moved to Düsseldorf to become Chief

Financial Officer of Kamps AG, where he was involved in the
realignment of the company. On September 16, 2004,
Matthias Zachert has been named as the CFO of LANXESS
AG.
14
Management Structure
Lean organisation, operating globally

BOARD OF MANAGEMENT
A.C. Heitmann U. Koemm M. Wienkenhöver M. Zachert
(CEO) (CFO)
Business Units Group Functions

Performance Rubber Performance Chemicals
Board Office Treasury
Butyl Rubber Material Protection Products
Corp. Development Tax
Polybutadiene Rubber Corporate Controlling
Functional Chemicals - Strategy
Technical Rubber Products - Portfolio Accounting
Leather Internal Auditing
Engineering Plastics Corporate
Communications Investor Relations
Styrenic Resins Textile Processing Corporate HR Mergers &
Chemicals Acquisitions
Semi-Crystalline Products
Law & Intellectual
Paper Property
Fibers
Chemical Intermediates RheinChemie Procurement Human Resources

Basic Chemicals Technical Information
Rubber Chemicals Services Technology
Fine Chemicals
Logistics / Supply Industrial &
Inorganic Pigments Ion Exchange Resins Chain Environmental
Affairs
15
Segment Overview*
Businesses grouped in four segments

Sales1: €6.315 bn
LANXESS EBITDA :2
Employees3:
€180 m
20,423
Material Protection
Butyl Rubber Styrenic Resins Basic Chemicals
Products
Polybutadiene Rubber Semi-Crystalline Products Fine Chemicals Functional Chemicals
Technical Rubber
Fibers Inorganic Pigments Leather
Products
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
Performance Engineering Chemical Performance

Rubber Plastics Intermediates Chemicals
Sales: €1.375 bn Sales: €1.401 bn Sales: €1.411 bn Sales: €1.925 bn

EBITDA: €4 m EBITDA: €-14 m EBITDA: €119 m EBITDA: €96 m
Employees: 2,999 Employees: 3,658 Employees: 4,059 Employees: 4,881
*2003 combined financials; 1 €203 m reconciliation; 2 €-25 m reconciliation; 3 4,826 reconciliation
16
Sales, Employees, Assets per Region
Global presence
World Coverage Sales by Region
Americas
25%
Asia
14%
EMEA w/o
Germany
Germany
34%
27%
LANXESS Bayer Agency Other
(21 countries) (~30 countries)
Assets by Region Employees by Region

Asia Asia
Americas 5% 9%
23% Americas
21%
Germany Germany
50% 51%
EMEA w/o EMEA w/o
Germany Germany
22% 19%
17 All figures are based on Combined Financial Statements

Overview LANXESS Group – Financials
Summary of key financials
Key financials
(€ m) 2002 2003 9M 2003 9M 2004
Sales 6,763 6,315 4,828 5,047
Exceptional items -80 -131 -25 -60
EBITDA excl. exceptionals 587 311 325 385
EBITDA excl. except. /Sales 8.7% 4.9% 6.7% 7.6%
EBITDA 507 180 300 325
EBITDA/Sales 7.5% 2.9% 6.2% 6.4%
Depr. & Amort. -626 -1,477 -377 -249
EBIT -119 -1,297 -77 76
EBIT/Sales -1.8% -20.5% -1.6% 1.5%
Capex 393 312 193 158
Number of Employees 21,460 20,423 — —

Customer, Suppliers, Raw Materials
Diversified customer and supplier base

Top 10 customers*: below 20% of sales
Customers
(thereof Bayer <10%)
Top 10 suppliers*: 70% of raw material spend

Suppliers
(thereof Bayer 14%)
Top 10 raw materials**: 1,3-Butadiene, Styrene, Acrylonitrile,

Raw Materials Cyclohexane, C4 Raffinate 1, Toluene,
Ammonia, Caustic Soda, Chlorine,
Isobutylene
Manageable impact on operating profit due to

contractual clauses
ability to partially pass through higher raw material
prices
hedging (strategy currently being further developed)
*estimates, based on 2003 sales

19 **based on 2003 figures
Environment, Health, Safety
Culture of strict adherence to all

environmental, health and safety standards
Numerous sites have a formalised Environmental Management System according
to DIN ISO 14001
Accruals of best estimate of liability for investigation and clean-up costs in place
Environmental liabilities:
Bayer and LANXESS performed a level 1 environmental audit for 55 sites in 2004
As of Dec 31, 2003, LANXESS had reserved €42 m for environmental matters globally
Environmental cap:
LANXESS liability arising from environmental contamination of real state that was caused or
arose prior to the spin-off economic effective date (July 1, 2004) is capped as between
LANXESS and Bayer
Bayer generally must reimburse LANXESS for all such remedial action in excess of €350 m
ordered, carried out or agreed upon before the end of 2009
20
Contracts with Bayer
Contractual relationship with Bayer*
Bayer LANXESS
goods and services
Businesses €0.5 bn
(incl. BBS,
BTS)
€0.7 bn
site-specific services
BIS**
€0.5 bn
*expected for 2005

**40% share held by LANXESS
21
Services
LANXESS continues service relationships
LANXESS
Services Relationship
stake
– Technical consultancy – IT operations – Contractual relationship

– Accounting – Scientific services like with other third parties none
BBS – Procurement – Pensions (‘at arms’ length)
– Human resources
– Logistics
– Engineering – Contractual relationship

BTS – Construction like with other third parties none
– Process optimisation (‘at arms’ length)
– Technical services – Waste management, – LANXESS expected to pay ca.

– Environmental – Utilities procurement €0.5 bn to BIS in 2005
BIS protection and safety – Infrastructure services – LANXESS is a partner with
40%
equal rights for key strategic
decisions at BIS
Benefits to LANXESS due to outsourcing of non-core activities and through

securing synergies at premises
22
Overview
Performance Rubber
23
Overview Performance Rubber
Performance Rubber
Sales Contribution 9M 2004 EBITDA Contribution 9M 2004
Performance
Rubber Chemical
Intermediates Performance
21%
23% Rubber
29% Chemical
Intermediates
40%
Engineering Engineering
Plastics Plastics
Performance
26% 11%
Chemicals Performance
30% Chemicals
20%
Total Sales LANXESS 9M 2004: €5,047 m Total EBITDA LANXESS 9M 2004: €325 m

Overview Performance Rubber – Structure
A leading* rubber producer with strong market

positions in the automotive tyre industry
Butyl Rubber Polybutadiene Rubber Technical Rubber Products
Manufactures butyl rubber, One of the world’s leading Provides a broad range of
which is a general purpose manufacturers of general specialty elastomers for the
rubber impermeable to air with purpose rubbers rubber processing industry with
wide applications both in tyre polybutadiene- and solution- wide applications e.g.
and other industries, such as styrene- polybutadiene-rubber automotive, engineering,
pharmaceutical closures and used principally in tyre construction, electronics, oil
chewing gum. compounds exploration, aviation
Automotive and tyre industries as the major end-users

Mainly price-, cost- and technology-driven
Based on butadiene, isobutene, ethylene, propylene,
isoprene, acrylonitrile
*based on volume, source: IISRP World-wide Rubber Statistics 2003
25
Overview Performance Rubber – Financials I
Key financials
(€ m) 2002 2003 9M 2003 9M 2004
Sales 1,484 1,375 1,038 1,046
EBITDA 161 4 37 97
EBITDA/Sales 10.8% 0.3% 3.6% 9.3%
Depr. & Amort. -163 -250 -88 -55
EBIT -2 -246 -51 42
EBIT/Sales -0.1% -17.9% -4.9% 4.0%
Capex 78 78 48 43
Number of Employees 3,151 2,999 – –

Overview Performance Rubber – Financials II
Slight increase in sales due to strong overall

price and volume development
Sales Performance Rubber
(€ m)
2000 1.484
-7.3% 1.375
1500 1.038 1.046
0.8%
1000
500
0
2002 2003 9M 03 9M 04
Decline in sales mainly due to lower sales of Unfavourable currency effects on sales were
special rubber products in TRP and synthetic offset by price and volume increases
rubbers for the tire industry in BTR
Rise in TRP volume overcompensated
decreased volume in PBR

Overview Performance Rubber – Financials III
Lower depreciation base and price increases

lead to a turnaround for the first 9 months 2004
EBIT Performance Rubber
(€ m)
150 42
50 -2 n.m.
-50 n.m.
-150 -51
-250
-246
2002 2003 9M 03 9M 04
Key factors for development were impairment EBIT positively influenced by price and volume
changes of €133 m, one-time software write-offs increases as well as reduced depreciation after
of €24 m and restructuring charges of €25 m impairments in 2003
Provisions in connection with settlement of
antitrust investigations in TRP negatively
affected 9M 2004 EBIT and EBITDA

Overview Performance Rubber – Sites
World-class European and North American

manufacturing base
Butyl Rubber Polybutadiene Rubber
Zwijndrecht, Belgium Zwijndrecht, Belgium
Dormagen, Germany Port Jerome, France
Sarnia, Canada Marl, Germany Dormagen, Germany
Orange TX, USA
Leverkusen, Germany
Port Jerome,
Sarnia, Canada France
La Wantzenau,
Orange TX, USA France
Technical Rubber Products

La Wantzenau, France
Dormagen, Leverkusen,
Marl, Germany
Sarnia, Canada
Orange TX, USA
29
Overview Performance Rubber - Strategic Statements
Turning market leadership into value
Butyl rubber, polybutadiene rubber and technical rubber products managed

independently in order to achieve full flexibility and accountability
Behave as market leaders in rubber
Stronger participation in Asian growth
Realize significant cost advantages through concentration on world-scale
plants
Selective expansion for promising sub-segments
Development of non automotive markets and rubber specialty segments
30
Overview Butyl Rubber
Performance Rubber Polybutadiene Rubber
Engineering Plastics Technical Rubber
Products
31
Performance Rubber – Butyl Rubber
Strong market & technology position as basis

to participate in attractive growth areas
End Uses Global Demand Products
- Adhesives Regular Butyl Rubber

Others North America Asia
- Automotive Engine
16% 32% 38%
Halobutyl Rubber
Mounts
- Chewing Gum
- Construction
- Pharma
RoW
Automotive/ Europe
6%
Tyre 24%
based on global sales 84% Total (2004): €1.4 bn
Source: LXS estimates partially based on
SRI International CEH - Butyl Elastomers 2002 Source: LXS estimates
Competition Market Development Cost/Technology Position

1. ExxonMobil Based on currently installed Together with ExxonMobil only
capacities, constraints or even major producer of halobutyl
2. LANXESS shortages in capacity likely mid-
3. Russian Producers term rubber
(NKNK, Togliatti) Expected volume growth World-scale plants allow cost
(CAGR 02–08): efficiencies
4. Yan Hua
North America ~1%
Europe ~2%
based on volume terms
Asia ~6%
Source: IISRP World-wide Rubber
Statistics 2003 Source: LXS estimates
32
Performance Rubber – Butyl Rubber – Products and Main Applications
Tyres are the main applications for Butyl

Rubber
Products Main Applications
Halobutyl Rubber Tyre inner-liners
Inner-tubes for tyres
Tyre curing bladders / envelopes
Chewing gum
Tyre sidewalls
Regular Butyl Rubber
33
Performance Rubber – Butyl Rubber
A leading producer of Butyl Rubber

> 90 %
Chlorine
Isobutene Regular Bromine Halobutyl
Butyl Rubber
Isoprene Rubber
< 10 %
Monomers
Finishing &
as Polymerisation Halogenation
Logistics
Raw Materials
made of BTR products
34
Performance Rubber – Butyl Rubber – Positioning in the Market
A leading market and technology position

as well as strong customer relationships
Competitive Advantages Challenges
A leading* market position in overall market for Capacity expansion of Chinese competition
Butyl Rubber Change of Air-Retention-Technology as
Low cost, high efficiency world scale plants for competitor and customer tendency
manufacturing in Belgium and Canada allow
flexible production of butyl and halobutyl
rubber
Leading technology
Strong customer relationships based on
collaborations with tyre manufacturers to meet
specific customer needs
*based on volume, source: IISRP World-wide Rubber Statistics 2003
35
Products
36
Performance Rubber – Polybutadiene Rubber
Leading market positions and world-scale

plants in important markets
Others
Polybutadiene Rubber
North America
Plastics 4% 30% Solution Styrene-Butadiene
25% Rubber
Europe
Asia
26%
Automotive/ RoW 35%
Tyre 9%
based on global sales 71% Total (2003): €2.7 bn
Source: LXS estimates partially based on Source: LXS estimates partially based on
SRI Int. CEH - Polybutadiene Elastomers 2003 IISRP World-wide Rubber Statistics 2003

1. LANXESS Capacity expected to grow Dewatering and reaction
2. Goodyear below market growth, with no considered to be leading edge
major investments expected Only player in merchant market
3. Sinopec
apart from efficiency gains or
4. Firestone with production sites in two
debottlenecking
regions
5. Michelin / ASRC Expected volume growth
(CAGR 03–07): World-scale plants with
Americas ~3% advantageous scale in finishing
Based on volume terms
Source: IISRP World-wide Rubber Europe ~3%
Statistics 2003 Asia ~5%
SRI Int. CEH - Polybutadiene Elastomers 2003
37
Performance Rubber – Polybutadiene Rubber – Products and Main Applications
Automotive and tyre industries are the main

customers of Polybutadiene
Solution Styrene-Butadiene Rubber (S-SBR) Tyre treads, e.g. low-rolling-resistance tyre
Polybutadiene Rubber (PBR) Tyre sidewalls
(*)
(*) not registered in the USA
38
Performance Rubber – Polybutadiene Rubber
One of the world's major suppliers
Polybutadiene
Butadiene
Rubber
Monomers
Finishing &
as Polymerisation
Logistics
Raw Materials
made of PBR products
39
Performance Rubber – Polybutadiene Rubber – Positioning in the Market
Broad and innovative product portfolio

combined with good reputation
Broad and innovative product portfolio offered Purchasing power of concentrated and
to both tyre manufacturers and plastic backward integrated customers
producers Natural rubber price decline
Only player in the merchant market covering 2 Customer expansion into Asia leading to:
regions with modern, cost efficient world scale
production sites located close to customers Tyre capacity inflation
Scale advantages Price pressure in tyre market likely to occur
Strategic raw material (butadiene) is secured

structurally
Closure of plants at Sarnia and Marl improved
cost structure and utilisation
Reputation with customers for reliable
performance and delivery
40
Products
41
Performance Rubber – Technical Rubber Products
Leading market positions, state-of-the-art

technology and world-scale plants
Footware
15% Automotive EMEA
Mechanical 46% 32% EPDM
Engineering
NBR/E-SBR HNBR
15%
Americas
Electro/ APAC EVM
32%
Electronics Plastics 36%
Others CR
4% 3% Total (2003): €2.8 bn
12%
Construction Source: SRI International CEH -
5% Elastomers Overview 2002 and
Source: LXS estimates based on sales 2003 Styrene-Butadiene Elastomers 2004

1. LANXESS For EPDM and NBR price State-of-the-art process
pressure expected to slow technology
2. Dupont Dow Elastomers down as supply and demand
3. Nippon Zeon narrowing Attractive cost position due to
4. Polimeri Europa Expected volume growth world-scale plants
(CAGR 03–06): ~3% High innovation potential in
5. DSM
CR: ~1% HNBR (e.g. Therban AT), EVM
6. JSR EPDM: ~3%
and E-SBR
Based on volume terms NBR: ~3%
Source: IISRP World-wide Rubber HNBR: ~6%
Statistics 2003 EVM: ~9%
Source: LXS estimates
42
Performance Rubber – Technical Rubber Products – Products and Main Applications
Focus on non-tyre applications

Chloroprene rubber (CR) Functional, safety & performance parts for
automotive (belts, hoses, wiper blades,
Nitrile-butadiene rubber (NBR) weather strips, seals)
Mechanical engineering (hoses, tubes, cables,

Emulsion styrene-butadiene rubber (E-SBR) gaskets, membranes, roll covers)
Ethylene-propylene diene rubber (EPDM)
Leisure industry (sponges, shoe soles)
(*)
Hydrogenated nitrile-butadiene rubber (HNBR) Building materials (membranes, seals, FRNC

cables)
Ethylene-vinyl acetate rubber (EVM)
(*) not registered in the USA
43
Performance Rubber – Technical Rubber Products
A leading supplier of specialty elastomers

for the rubber industry
Butadiene Nitrile-butadiene Hydrogenated nitrile-
+ acrylonitrile rubber (NBR) butadiene rubber (HNBR)
Butadiene Chloroprene (Poly-) chloroprene
+ chlorine monomer rubber (CR)
Ethylene
+ propylene Ethylene-propylene diene
+ diene monomer rubber (EPDM)
Butadiene Styrene-butadiene
+ styrene rubber (E-SBR)
Monomers Chlorination Hydrogenation Finishing &

as Polymerisation
(in case of CR) (in case of HNBR) Logistics
Raw Materials
44
Performance Rubber – Technical Rubber Products – Positioning in the Market
Strong innovation capabilities combined with

world-scale plants to enable future growth
Broad and deep product portfolio with strong Raw material cost development vs. market
brand marketing price
World-scale plants with state-of-the-art Customer migration to Asia
production facilities and processes Market consolidation on customer side
Significant improvements in manufacturing Overcapacities/ lower capacity utilisation
performance
Substitution of TRP products by alternative
Strong position in premium EVM and HNBR rubber materials
segments
Strong innovation capability and promising
new product pipeline
Broad customer basis
Customer approvals especially in HNBR
45
Overview
Performance Rubber
46
Overview Engineering Plastics
Performance Chemical
Rubber Intermediates Performance
21% 23% Rubber
29% Chemical
Intermediates
40%
Engineering
Engineering
Plastics Performance Plastics
26% Chemicals 11% Performance
30% Chemicals
20%

Overview Engineering Plastics – Structure
Engineering Plastics is a leading* provider of

thermoplastic resins and fibers
Styrenic Resins Semi-Crystalline Products Fibers
Provides a range of Provides a range of PA and Develops and produces high
thermoplastics resins for PBT resins and compounds quality synthetic elastic fibers
household, automotive, and blends principally to the for nearly all fields of textile
electronics and medical automotive and electrical production and polyamide-
applications industries based monofilaments for
Acknowledged supplier of ABS, technical applications
SAN and ABS-PA resins with
50 years of experience in
serving the engineering plastics
market
Broad range of product and system solutions

The segment‘s products often rank among the leaders in
their core application areas and are known for their durability
and dimensional stability
48 *based on LXS estimates
Overview Engineering Plastics – Financials I
Key financials
(€ m) 2002 2003 9M 2003 9M 2004
Sales 1,504 1,401 1,060 1,281
EBITDA 25 -14 32 38
EBITDA/Sales 1.7% -1.0% 3.0% 3.0%
Depr. & Amort. -171 -474 -89 -22
EBIT -146 -488 -57 16
EBIT/Sales -9.7% -34.8% -5.4% 1.2%
Capex 72 85 53 26

Overview Engineering Plastics – Financials II
Strong volume growth in STY and SCP

triggered significant sales improvement
Sales Performance Engineering Plastics
(€ m)
2000 1.504
-6.9% 1.401 1.281
1500 1.060 20.9%
1000
500
0
2002 2003 9M 03 9M 04
Decrease mainly due to STY and FIB Overall increased volumes and prices drive
sales growth
STY suffered from a sharp fall in prices caused
by global overcapacities Sales increases in STY as well as positive
volume- and price-driven sales performance of
FIB suffered from weaker global demand in SCP more than offset slight sales decline in
textiles and price reductions due to global FIB
overcapacities

Overview Engineering Plastics – Financials III
EBIT improvement, however operationally still

unsatisfactory
EBIT Engineering Plastics
(€ m)
200 n.m. 16
0
-200 >100% -57
-146
-400
-600 -488
2002 2003 9M 03 9M 04
Impairment charges of €356 m, restructuring Despite higher raw material prices,

charges for FIB of €18 m and general EBIT increased on
restructuring expenses as well as depreciation higher volumes
of software in the amount of €34 m led to a
strong decline of the 2003 EBIT compared to €13 m asset write-backs in STY
the previous year lower depreciation
Adjusted for these charges, the 2003 EBIT was
€-80 m compared to €-62 m in 2002

Overview Engineering Plastics – Sites
Engineering Plastics has a strong

manufacturing base in Europe and NAFTA
Semi-Crystalline Products Styrenic Resins
Antwerpen, Belgium Camacari, Brazil

Uerdingen, Germany Dormagen, Germany
Antwerpen, Belgium
Hamm-Uentrop, Germany Baroda, India
[JV] Tarragona, Spain
Map Ta Phut, Thailand
Addyston OH, USA
Hamm-Uentrop, Germany
Uerdingen, Germany
Addyston OH, USA Dormagen, Germany
Bushy Park SC, USA

Baroda, India
Tarragona, Spain
Fibers
Dormagen, Germany
Bushy Park SC, USA
Camacari, Brazil Map Ta Phut, Thailand
52
Overview Engineering Plastics – Strategic Statements
Focus on enhancing profitability and

customer value-added
Defend leading* positions in Europe, Americas and India

Participate in Asian growth
Capture growth opportunities in promising sub-segments
Shift to differentiated and customer-specific products
Strengthen profitability through continuation of cost and efficiency programs
*based on LXS estimates
53
Overview Styrenic Resins
Performance Rubber Semi-Crystalline
Products
Fibers
54
Engineering Plastics – Styrenic Resins
Strong market positions in Europe, Americas

and India
Healthcare Sports &
LATAM
2% Leisure India NAFTA 1%
Electro/ 3% Others 2% 17% SAN Other
Electronics 37% EMEA
31% 22%
Automotive/ APAC ABS

Construction Chemical Transportation 58%
8% Industry 16%
Total (2003): €5.3 bn
3%
based on global sales 2003

A leading position in Europe, Americas Expected global market increase by ~6% Sufficient capacities in all relevant regions
and India (annual 04-05) driven by double digit with exception of China
Global No. 3 position in volume terms growth in China and India In EMEA special technology for low
behind ChiMei and LG Global capacity increase averages 5% volatiles ABS
p.a., mainly driven by China with growth Innovative TRIAX® and CENTREX®
forecasted at about 14% p.a. (annual 03- technology allows for future value driven
04) portfolio improvements
Strong trend to transfer injection moulding
business to China
Fast-growing segments are mainly using
specialty grades

55
Engineering Plastics – Styrenic Resins – Products and Main Applications
Key products NOVODUR® and LUSTRAN®

have applications in various industries
ABS types: NOVODUR®, LUSTRAN® and ABS types: appliances, automotive industry,
ABSOLAC™. The range of grades includes construction & housing, electrical/ electronic
general-purpose injection moulding grades, products, furniture, information technology and
grades with an improved heat resistance and medical applications
products for extrusion, chemical electroplating SAN types: appliances, electrical/ electronic
and special glass fiber-reinforced grades products, information technology, medical
SAN types: LUSTRAN® and ABSOLAN™ applications and packaging
PA-ABS blends: TRIAX® PA-ABS blends: automotive industry (interior
ASA and AES polymers: CENTREX® and exterior car parts)
56
Engineering Plastics – Styrenic Resins
Styrenic Resins is forming a colourful

difference
Com-
Raw Appli-
Monomers Polymerisation pound- cations
material ing Customer
Acrylonitrile SAN Polybutadiene

+ Butadiene + ABS
Styrene
+ Styrene Polymers
Acrylonitrile
Business strategy: Focus on differentiated and coloured grades
Partial backward integration Strategic focus
(1) General purpose and natural colour grades

57
Engineering Plastics – Styrenic Resins – Positioning in the Market
Global manufacturer with regionally focussed

product portfolio
Regional organisation and manufacturing High complexity in “small lot“ business

facilities are focussing on individual market General business driven by raw material costs
requirements and scale of manufacturing
Backward integration into polymerisation Processes and technologies differ across sites
enables STY to produce the necessary
building blocks for differentiated grades and Migration of injection moulding business to low
specialties labour-cost countries (i.e. China)
Strong expertise in differentiated and coloured

grades supported by development laboratories
in all regions ensuring close proximity to
customers
58
Products
Fibers
59
Engineering Plastics – Semi-Crystalline Products
SCP is able to leverage its strong market

positions globally
Others Automotive/ Glass Fibers
Europe Plastic
Packaging 13% Transportation Thermoplastic
34% Intermediates
12% 36% Polyesters
Electro/
Electronics Chemistry RoW
18% Life Science Thermo-
15% 66%
plastics based
6%
on polyamide
based on global sales 2003 Total (2003): €5.2 bn
Competition Market Development Cost/ Technology Position

Main competitors in Europe are BASF, Expected global market growth by Plastics:
DSM, DuPont and Rhodia volume ~6% (CAGR 03-06) Cost-based competitive advantage via
world-scale polymerisation (PA 6 and
Main global competitors are BASF, Biggest growth region Asia (China) PBT) and compounding facilities in
DuPont and General Electric Above market growth in Greater Uerdingen
Market players have different product Europe Intermediates:
portfolio structures: size is not High growth potentials above GDP for World-scale caprolactam-train in
necessarily indicator of profitability Antwerpen providing cost-based
thermoplastic polyesters and advantage
The unit holds promising niche World-scale glass fiber plant on high
positions in the Americas and in Asia thermoplastics based on polyamide technological standard (direct chop)
leads to process-based advantage

60
Engineering Plastics – Semi-Crystalline Products – Products and Main Applications
DURETHAN® and POCAN® have numerous

applications across a variety of industries
DURETHAN® A - based on polyamide 6.6 DURETHAN® A: automotive industry,
POCAN® - based on polybutylene construction & housing and electrical/
terephthalate (PBT) and polyethylene electronic sector
terephthalate (PET)
Available types for both: non-reinforced, glass DURETHAN® B: appliances, automotive
fiber reinforced, glass-bead and mineral-filled, industry, construction & housing, electrical/
glass fiber reinforced/ mineral-filled, flame- electronic sector, furniture, industrial/
retardant, and polymer and elastomer- mechanical products, information technology,
modified grades packaging and sport & leisure
DURETHAN® B - based on polyamide 6 POCAN®: appliances, automotive industry,
Available types: non-reinforced, glass fiber electrical/ electronic sector, information
reinforced, glass-bead and mineral-filled, glass technology and medical products
fiber reinforced/ mineral-filled, flame-retardant,
and polymer and elastomer-modified grades. Glass fibers used for reinforcement of plastics
Transparent grades are available as specialty Plastics Intermediates as raw materials for
products plastics
Glass fibers
Plastics Intermediates such as Adipic Adid or
Caprolactame
61
Engineering Plastics – Semi-Crystalline Products
SCP is increasingly focussed on value-added

parts of the manufacturing chain
Cyclohexane KA-Oil (1) CPL (2) Polyamide
(PA) 6
Poly- Com- Appli-
Raw
CXO(1) CPL(2) meri- pound- cation Customer
material sation ing
Sales outside
PA 6 chain
Supply of customised plastics highly dependent

on strong product- and application-development
Strategic focus Backward integration
(1) Cyclohexanone/Cyclohexanol (2) Caprolactam

62
Engineering Plastics – Semi-Crystalline Products – Positioning in the Market
Leverage strong product expertise and market

positions to address Asian opportunities
Expertise and track record in application Increase in raw material prices, especially
engineering and development support long- cyclohexane (benzene) and ammonia
term customer relationships Increase in Asian imports to EU due to
Backward integration into polymerisation and favourable exchange rates (weak dollar)
monomers Plastics:
Favourable long term contracts for Development out of niche positions in
intermediate products reduce exposure to Asia-Pacific and Americas into market player
cyclicality and overcapacity
Lack of local compounding unit in Asia-Pacific
World-scale plants in polyamide and glass
fibers
Focus on differentiated grades allows SCP to
maximise the benefits of its development,
application and compounding know-how
63
Products
Fibers
64
Engineering Plastics – Fibers
Fibers is active in a structurally challenging

market increasingly shifting to Asia
Synthetic elastic Monofil as segment
Others Paper fibers (Spandex) out of Nylon fiber Synthetic elastic fibers
10% 10% Americas market DORLASTAN®
19% Asia RoW Polyamide-based
15% 17% monofilaments
PERLON®, ATLAS® and
Europe
Textile Europe Asia
Americas BAYCO®
22% 59% 33%
80% 35%
Total (2003): Total (2003):
based on global sales 2003 €2.2 bn €0.13 bn

Invista (recently sold from DuPont to Koch) as No. Spandex market has recovered from 2003 (Iraq, DORLASTAN® :
1 with production sites in Americas, Europe and world-wide recession) and demand is increasing
Asia Well established plants in North America and
at historical levels of 6-8%. Current demand Europe. Cost position improved by ongoing
Hyosung has rapidly moved into second position growth is driven by enormous increase in China
world-wide as a result of a significant capacity restructuring activities
expansion program Greater Europe will remain an import market. Lack of production site in Asia compensated by
Capacity increases only happening in Asia, with Turkey is the fastest growing market in this excellent global logistical, technical and
many new companies coming to the market region and is expected to overtake Italy as the commercial service
most significant market in Europe
LXS holds No. 2 position in Greater Europe and Exit of covering business (GVW Goch) in 2004
North America behind Invista Americas demand stable with decrease in North
America compensated by increasing in South Monofil:
Monofil: significant market position across most
segments America Competitive process
Monofil: Good quality, especially for high end
Market volume growth forecasted at ~3-5% applications
(CAGR 03-08 for all segments)
based on global sales
65
Engineering Plastics – Fibers – Products and Main Applications
Brand names well established in serviced

industries
Provider of high quality synthetic elastic fibers DORLASTAN®: hosiery (tights, socks, support
for all sorts of textile applications and stockings), underwear (laces, bras, slips),
polyamide-based monofilaments for technical sports and casual wear (shirts, swimwear,
applications sportswear), outerwear (suits, business shirts,
Products include synthetic elastic fiber slacks, jeans), non-wovens (diapers, medical
DORLASTAN® and polyamide-based applications)
monofilaments products PERLON®, ATLAS® Monofil: paper (paper machine clothing,
and BAYCO® filtration, screening), fishing (fishing lines, long
lines), rope making, agriculture (pre-tensioned
ropes, water deposit coverings, fences and
oyster cultures), sports (tennis and badminton
rackets) as well as textile products (zippers,
hook and loop fasteners)
66
Engineering Plastics – Fibers
Fibers is focussed on early steps of the

manufacturing process
MDI
(Isocyanate)
+ Diole
+ Diamine
(Polyester,
Polyether)
Logistics
Isocyanate Knitting, Dying,
Spinning Warping =>Trade
Chain Weaving, Finishing,
Prepoly- ...
Extension etc. Sewing
merisation =>Fibers =>Yarn
=>Wovens =>Clothes Consumer
67
Engineering Plastics – Fibers – Positioning in the Market
Established business challenged by unfavour-

able exchange rates and Asian overcapacities
DORLASTAN®: DORLASTAN®:
LANXESS recognised as high quality supplier to global Unfavourable cost structures in Europe compared to
textile industry with premium technical service Asian competitors
Strong relationship with global key-accounts Price pressure driven by Asian overcapacities
Broad product portfolio Exchange rate €/$ remaining unfavourable
Global organisation WTO 2005 supports Asian exports into Europe and
Monofil: Americas
Technical marketing know-how and market access in all Monofil:
segments In some applications dependence on limited number of
Established and strong brands customers
Image of quality supplier Market consolidation and changes in competitive
environment
Continuation of unfavourable €/$ exchange rate increasing
price pressure in NAFTA region
68
Overview
Performance Rubber
69
Overview Chemical Intermediates
Rubber Intermed. Performance
21% 23% Rubber
29% Chemical
Intermed.
40%
Plastics Performance Plastics
Chemicals 11%
26% Performance
30% Chemicals
20%

Overview Chemical Intermediates – Structure
Commodities and fine chemicals for

numerous end-user industries
Basic Chemicals Fine Chemicals Inorganic Pigments
Supplier of aromatic Important player in fine A leading* global supplier

compounds such as e.g. chemicals focussed on: of inorganic pigments with
chlorobenzenes, Agrochemicals custom a broad, innovative
chlorotoluenes and manufacturing product range
nitrotoluenes as well as
Pharmaceutical custom
amines, polyols,
manufacturing
monoisocyanates, thio
products, inorganic acids Specialty Fine
Chemicals
* Source: SRI International CEH - Pigments

Nov. 2004
71
Overview Chemical Intermediates – Financials I
Key financials
(€ m) 2002 2003 9M 2003 9M 2004
Sales 1,447 1,411 1,080 1,102
EBITDA 154 119 139 132
EBITDA/Sales 10.6% 8.4% 12.9% 12.0%
Depr. & Amort. -149 -463 -106 -86
EBIT 5 -344 33 46
EBIT/Sales 0.4% -24.4% 3.1% 4.2%
Capex 141 79 49 53
Number of Employees 4,265 4,059 – –

Overview Chemical Intermediates – Financials II
Stable sales due to rising market demand in

Basic Chemicals
Sales Performance Chemical Intermediates
(€ m)
2000 1.447 -2.5% 1.411
1500 1.080 0.2% 1.102
1000
500
0
2002 2003 9M 03 9M 04
Decrease mainly due to IPG and FCH Strong sales in BAC offset decrease in sales in
other business units – especially FCH which
The decline at IPG can be mainly attributed to
had to cope with ongoing difficult market
currency translation effects
conditions
Weaker sales performance for FCH resulted
from strong competition in the Asian market
(especially for agrochemicals)

Overview Chemical Intermediates – Financials III
EBIT improvement driven by higher market

demand
EBIT Development
(€ m)
200 33 46
5 39%
0
-200 n.m.
-400 -344
2002 2003 9M 03 9M 04
Significant impairment charges in 2003 led to a Impairment charges of €13 m relating to FCH
negative operating result of €-344 m after a
Lower depreciation base in the segment
positive result in 2002
following the impairment charges incurred at the
Adjusted for these impairment charges, the end of 2003
EBIT for 2003 was €-12 m

Overview Chemical Intermediates – Sites
Chemical Intermediates relies on a broad

manufacturing base in Europe and NAFTA
Fine Chemicals Basic Chemicals
Dormagen, Germany Dormagen, Germany
Leverkusen, Germany Leverkusen, Germany
Alcantarilla, Spain [JV] Uerdingen, Germany
Brunsbüttel, Germany
Baytown TX, USA
Dormagen, Germany
Brunsbüttel, Germany
Uerdingen, Germany
Branston, UK Bitterfeld, Germany
New Martinsville WV, USA Leverkusen, Germany
Imperial PA, USA Vilassar de Mar, Spain
Baytown TX, USA

Alcantarilla, Spain
Shanghai, China
Lerma, Mexico
Inorganic Pigments
Uerdingen, Germany
Porto Feliz, Brazil
New Martinsville, USA Porto Feliz, Brazil
Shanghai, China
Branston, UK
Vilassar de Mar, Spain Sydney, Australia
Imperial PA, USA
Sydney, Australia
75
Overview Chemical Intermediates – Strategic Statements
Leverage strong asset base and market

position to sustain margins
Maintain current market position and sustain / improve margins

Develop non-European markets
Leverage organic growth opportunities from market consolidation
Continue product portfolio optimisation
Shift product-mix towards more valuable applications and products
Strengthen profitability through continuation of cost and efficiency programs
76
Overview Basic Chemicals
Performance Rubber Fine Chemicals
Engineering Plastics Inorganic Pigments
77
Chemical Intermediates – Basic Chemicals
Leading positions in industry with Asian

competition and consolidation trends
Automotive/
Coatings Transportation LATAM Nitrotoluenes
7% Asia 2% Benzyl Products
6% Europe Chlorotoluenes
Life Science 38% Polyols/Oxidation
23% 45% Products
Construction Chlorobenzenes
Amines
5% Chemistry North America Inorganic Acids
59% 15%

The business unit maintains strong Expected demand growth according to GDP For most segments world-scale capacities
positions in all its product lines (CAGR 02-07). and competitive processes result in cost-
Main competitors are BASF, Dow Strong growth in Asia, stagnation in Europe based advantage
Chemical, Jiangsu Yangnong, Kureha, due to demand shifting to Asia However, competition from Asia is
Merisol, and Tessenderlo Consolidation expected for Benzyl Products becoming stronger due to lower personnel
and environmental cost
Strong competition from Eastern European
players regarding Chlorotoluenes/ Cresols
products in 2003
Strong pressure for industry consolidation in
the segments Chlorotoluenes,
based on global sales Chlorobenzenes and Nitrotoluenes

- SRI International CEH - Neopentyl Polyhydric Alcohols, Dec. 2002,
78 - SRI International CEH - Maleic Anhydride Aug. 2002, - SRI International CEH - Benzylchloride Sep. 2004
- Srour Report Aromatic Intermediates 1997-2004
Chemical Intermediates – Basic Chemicals – Products and Main Applications
BAC offers broad product range for use in

numerous end-user industries
Chlorobenzenes and derivatives The unit sells commodity chemicals used in the
Aliphatic and aromatic monoisocyanates following industries and sectors:
Chlorotoluenes and cresols, butylhydroxytoluene Automotive and transportation industry
Nitrotoluenes and derivatives Chemicals
Polyols (trimethylolpropane, hexanediol) Housing & construction
Oxidation products (maleic anhydride, phthalic Life science
anhydride)
Cyclohexylamine, dicyclohexylamine
Benzyl alcohol, benzyl chloride, benzo trichloride,
benzoyl chloride
Benzylamine, Monoisopropanolamine,
Diisopropanolamine
Hydrofluoric acid, anhydrite
Sulphur products (sulphuric acid/ oleum, sodium
bisulfite, thionyl chloride, sulfuryl chloride, sulphuric
chloride)
79
Chemical Intermediates – Basic Chemicals
Unique, integrated manufacturing process

provides clear competitive advantage
Chlorination Hydrolysis Substitution Hydrogenation
Chlorobenzene
Benzene Cresoles Thymol D/L Menthol
Dichlorobenzene
Toluene Chlorotoluene
Nitration Reduction Substitution
Nitrochloro- Methylethyl-
Chloroaniline
benzene aniline
Nitrodichloro- Dichloroaniline
benzene
Nitrotoluene Arom.
Isocyanates
3,4 Dichloro-
phenyl- Chlorobenzene
isocyanate
Chlorotoluene
product
Toluidine output Nitrotoluene
Output of individual products can be modified according to market needs in order to

optimise overall revenue
80
Chemical Intermediates – Basic Chemicals – Positioning in the Market
BAC intends to leverage unique

“Aromatenverbund” to succeed in Asia
Competitive technologies, world-scale Focus shifts to Asia as an important driver of

production facilities and high utilisation rates growth
provide cost advantage Migration of downstream industries to Asia
The unique “Aromatenverbund” system (textiles, dyestuffs, fluoro chemicals, pigments,
enables BAC to optimise its capacity etc.)
utilisation, cost of production and product mix REACH, TA-Luft as well as ongoing eco-
ensuring a solid market position toxicological discussions may generate
BAC has been able to successfully leverage expenditures for European producers
its competitive strength to grow its business, Substitution of older agro active ingredients
increase its market position and improve and loss of business for some product
profitability segments
81
82
Chemical Intermediates – Fine Chemicals
The industry is currently characterised by

overcapacity and ongoing consolidation
Specialties
Asia
Fine
Specialties 12%
EMEA Chemicals
25% 38%
Pharma Pharma
Agro
60%
15% America Agro
50%
Global market excluding Generics


FCH unit holds good market positions in Pharmaceutical market suffering from cGMP Established track record as a technology
agrochemicals overcapacity leader for complex synthesis via non-
No. 1 in agrochemicals custom Asian manufacturers establishing themselves biological methods
manufacturing as reliable suppliers of raw materials and FCH intends to improve its cost structure
Main competitors are Degussa, DSM, intermediates to increase competitiveness, especially in
Lonza and Rhodia Price erosion observed for established the most price-sensitive market segments
products in all segments
Continuing consolidation in fine chemicals
market
Fine chemicals “shakeout” process expected
based on global sales to continue over the next 2-5 years

- SRI International SCUP - Antioxidants Sep. 2003
83 - SRI International SCUP - Active Pharmaceuticals Ingredients July 2001
- J.Ramarkers Fine Chemical Bench Marking 2004
Chemical Intermediates – Fine Chemicals – Products and Main Applications
Intermediates and active ingredients for

pharma, agrochemical and other industries
Unit primarily offers custom manufacturing Agrochemicals: intermediates and active

services components
Provider of intermediates and active Pharmaceuticals: intermediates and active
ingredients for agrochemical, pharmaceutical ingredients
and other high-grade fine chemical products Fine chemicals: chemical components for the
End-markets include cosmetics, electronic, cosmetics, photo-chemicals and electronic
photo products and polymer additives chemicals devices
84
Chemical Intermediates – Fine Chemicals
Focussed on the custom manufacturing

of fine chemicals
Customer Value Chain
Process Marketing &

Research &
Development & Production
Development Sales
Piloting
Custom Manufacturing
Chemical Multi-Step
Products
Intermediates Reaction
85
Chemical Intermediates – Fine Chemicals – Positioning in the Market
FCH must leverage technology and customer

position to weather challenging environment
Strong customer relationships based on Asian competition

established track record High overcapacities in fine chemical markets
Technology leadership in high-end chemistry Weak market position in pharma fine
Expertise in the field of complex chemistry and chemicals
fast “ramp-up” capabilities, particularly in the Cost bases to be improved
agrochemicals segment
86
87
Chemical Intermediates – Inorganic Pigments
IPG has excellent market and technology

positions in a mature industry
Other Plastics Asia Iron Oxide

RoW
6% 9% 14% 14% Chromium Oxide
Coatings
29%
Construction
Paper 53% North America Europe
3% 37% 35%

Market leader in iron oxide Iron Oxides: Technically sophisticated production units
(BAYFERROX®) and strong No. 2 in Expected average sales growth rate 1% in Western Europe, USA, Brazil
chromium oxide minimum (CAGR 03-06) (synthesis)
Main competitors are Elementis, Shift from powder to dust-free flow delivery Laux process unique to LANXESS with
Rockwood and Chinese companies (e.g. forms and from blends to component colours additional profit from aniline
Hunan Three-Rings, Deqing Huayuan) in construction industry
LANXESS with world-scale plant and
Change from powder to pastes/ concentrates
in paint industry resulting cost-based advantage
Chromium Oxides:
Low average sales growth rates (about 1%)
IPG regained market position in late 2003 and
based on global sales maintained it during 1H 2004

88 - SRI International CEH - Pigments Nov. 2004
Chemical Intermediates – Inorganic Pigments – Products and Main Applications
IPG products are mainly used in the

construction and coatings industries
Provider of colour pigments to various Colouring of construction materials (concrete

industries, in particular construction for floors, roofs and walls; asphalt)
Leading producer of synthetic iron oxide Paints and coatings (architectural paints as
pigments offering a broad product range well as industrial coatings)
Important products include iron oxide Other applications include products used for
pigments BAYFERROX®, BAYOXIDE®, colouring of plastics and paper and
BAYSCAPE®, COLORTHERM® and manufacture of refractory ceramics, brake
chromium oxide products linings, mulch, glazes and airbags
IPG also supplies oxides with tailored
magnetic, chemical and morphological
properties for the production of toners used in
photocopiers and laser printers
89
Chemical Intermediates – Inorganic Pigments
Global manufacturer of inorganic pigments

Producing iron oxides at its sites in Western Europe, USA and Brazil, LANXESS can
offer a broad and innovative product range using different production methods
Yellow
Red
Production
Raw Materials
methods
Black
Brown
Iron+Nitrobenzene Laux process

Broad product range
Iron salts+NaOH+Oxygene Precipitation process of iron oxide pigments;
available in powder,
Iron+Oxygene Penniman process slurry, granule and
compact pigment
Yellow or black iron oxide Calcination forms
90
Chemical Intermediates – Inorganic Pigments – Positioning in the Market
Leveraging superior manufacturing process,

cost and market positions
Cost-based competitive advantage due to Complexity in product portfolio

economies of scale with iron oxide (FeO) plant Competitors try to attack IPG's leadership in
significantly larger than peers quality
State-of-the-art production capacities and Increased exports and price pressure from
superior product quality low-cost Chinese competitors
Strong established brands such as Increases in raw material prices driven by
BAYFERROX® supply situation
91
Overview
Performance Rubber
92
Overview Performance Chemicals
Rubber Intermediates Performance
21% 23% Rubber
29% Chemical
Intermediates
40%
Plastics Plastics
26% Performance 11%
Chemicals Performance
30% Chemicals
20%

Overview Performance Chemicals – Structure
BUs produce service- and application-driven

products for a wide range of industries
Material Protection Functional
RheinChemie Leather
Products Chemicals
Comprehensive Manufactures Providing technical Broad range of
range of biocidal products such as: services and additives specialty products
active ingredients for the rubber, for the leather
Plastic additives
and specialties for: polyurethane, plastics industry including:
Flame retardants
and lubricant oil
Beverage Water chemicals Tanning agents
sterilisation industries; as well as
Specialty dyes colour pastes for the Preservatives
Disinfectants/
Colorants polyurethane industry Finishing auxiliaries
personal care
products Dye products
Wood preservatives/
antifouling products
Industrial
preservation
Mainly service- and application-driven

Serving a wide range of industries
Covering either the whole value chain of a specific industry or
providing a specific functionality
94
Overview Performance Chemicals – Structure
BUs produce service- and application-driven

products for a wide range of industries (continued)
Textile Processing
Ion Exchange Resins Paper Rubber Chemicals
Chemicals
Ion exchange resin Product solutions for Papermaking Full portfolio of
manufacturer for the the processes of chemicals e.g.: rubber chemicals for
processing of: Pretreatment Paper colorants the tire and technical
Water Dyeing Auxiliaries Fluorescent rubber industry
Foodstuff Finishing whitening agents including:
Chemicals Textile printing Sizing and strength Antioxidants
chemicals Accelerators
Other papermaking Specialties
chemicals
Mainly service- and application-driven

Serving a wide range of industries
Covering either the whole value chain of a specific industry or
providing a specific functionality
95
Overview Performance Chemicals – Financials I
Key financials
(€ m) 2002 2003 9M 2003 9M 2004
Sales 2,055 1,925 1,501 1,459
EBITDA 196 96 131 68
EBITDA/Sales 9.5% 5.0% 8.7% 4.7%
Depr. & Amort. -129 -272 -80 -76
EBIT 67 -176 51 -8
EBIT/Sales 3.3% -9.1% 3.4% -0.5%
Capex 102 63 39 33

Overview Performance Chemicals – Financials II
Sales declined by €42 m to €1,459 m
Sales Performance Chemicals

(€ m)
3000
2.055 -6.3% 1.925
2000 1.501 -2.8% 1.459
1000
0
2002 2003 9M 03 9M 04
Net sales in Functional Chemicals and Material Sales decrease mainly on unfavourable currency
Protection Products increased effects in all business units
Increases could not offset declining sales in all
other business units, in particular Textile
Processing Chemicals

Overview Performance Chemicals – Financials III
EBIT burdened by one time effects
EBIT Performance Chemicals

(€ m)
150 67 51
50 n.m.
-50 -8
n.m.
-150
-250 -176
2002 2003 9M 03 9M 04
Decline primarily due to impairment charges of EBIT hit by exceptionals of €68 m:

€168 m
goodwill impairment of €20 m
Charges relate mainly to the Textile Processing incurred in RCH
Chemicals and Paper business units
an increase of provisions of €8 m
relating to the settlement of antitrust
investigations at RUC
a €40 m increase in provisions for
environmental matters
Overview Performance Chemicals – Sites
Performance Chemicals has a world-wide

manufacturing base
RheinChemie Paper Leather Textile Processing Chemicals
Qingdao, China [JV] Leverkusen, Germany Zarate, Argentina Zarate, Argentina
Kürten, Germany Bushy Park SC, USA Wuxi, China Porto Feliz, Brazil
Mannheim, Germany Leverkusen, Uerdingen, Wuxi, China
Toyohashi, Japan Germany Leverkusen, Germany
Chardon OH, USA Filago, Italy Madurai, India
Merebank, Rustenburg, Lerma, Mexico
Trenton NJ, USA Newcastle [JV], South Africa Ede, Netherlands
Wellford SC, USA
Uerdingen, Bitterfeld, Brunsbüttel,
Ede, Netherlands
Kürten, Mannheim, Germany
Antwerpen, Belgium
Trenton NJ, USA Qingdao, China
Filago, Italy
Chardon OH, USA
Birmingham NJ, USA Thane, India
Toyohashi, Japan
Baytown TX, USA Wellford SC, USA Madurai, India
Bushy Park SC, USA Wuxi, China
Lerma, Mexico
Porto Feliz, Brazil Johannesburg, South Africa

Rubber Chemicals
Material Protection Products Isithebe, Merebank, Rustenburg,
Zarate, Argentina Newcastle, South Africa Antwerpen, Belgium
Zarate, Argentina Bitterfeld, Brunsbüttel,
Porto Feliz, Brazil Functional Chemicals Leverkusen, Uerdingen,
Germany
Ion Exchange Resins Leverkusen, Uerdingen, Thane, India
Uerdingen, Germany Germany
Wellford SC, USA Bitterfeld, Leverkusen, Germany Isithebe, South Africa
Lerma, Mexico
Wuxi, China Birmingham NJ, USA Bushy Park SC, USA
Baytown TX, USA
99
Overview Performance Chemicals – Strategic Statements
Build on strengths to grow in profitable

niches and expand business regionally
Strengthen regional activities by expansion of local technical service and

increase geographic diversification
Develop profitable niches through innovation and intensify innovation
partnerships with customers
Broaden product portfolio to increase coverage of customers’ value chain
Widen industrial application focus
Set up tolling agreements with producers in low-cost countries
100
Overview Material Protection
Products
Performance Rubber
Functional Chemicals
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
101
Performance Chemicals – Material Protection Products
Broad product portfolio and leading market

positions in an attractive market
Hygiene Asia
Beverage Europe Wood
Chemistry 24% Industrial
15% 30% protection
Industry 21% Preservation
20%
Mechanical
Americas Disinfection/
Engineering Construction
46% PC/ Beverages
11% 33%

Main competitors are: Arch Expected sales growth (CAGR 03– Competitive cost positions
Chemicals, Dow Chemical, 07): ~4% Leading technology positions
Lonza, Rohm & Haas and Thor Disinfection / PC: ~2% High innovation potential
Industrial Preservation: ~2%
Beverage Industry: ~3%
Wood Protection/ Antifouling:
~7%

102
Performance Chemicals – Material Protection Products – Products and Main Applications
Product solutions for a wide area of

applications
Preservatives / Biocides Wood protection / Antifouling
Disinfection & home care products
Health & personal care
Food & beverages
Industrial applications
Cold sterilisation agent for the Beverage

Industry
103
Performance Chemicals – Material Protection Products
A leading* producer of biocides and

formulations
Selective Finishing &
Raw Material Purification
Chlorinating Logistics
+ Sulfuryl-
+ Chlorine
chloride P-Chloro-M-Cresole
M-Cresole ( PREVENTOL CMK )
®
Condensation Finishing &

Raw Material Purification
Dehydrogenation Logistics
Cyclo- + Catalyst O-Phenylphenol

®
hexanone ( PREVENTOL O EXTRA )
Finishing &
Raw Material Formulation
Logistics
Key Aqueous Solutions
Biocidal
Actives Dispersions
104
Performance Chemicals – Material Protection Products – Positioning in the Market
Global sales and service network with leading

positions in Europe
Strong R&D position (incl. cooperation with Regulatory changes
Bayer CropScience) Chinese / Indian competition with rather
Global sales and service network cheap production costs
Broad portfolio with unique chemical agents in Need for full product portfolio offering
various areas
Leading competence in regulatory work like
Biocides Products Directive or EPA (USA) etc.
105
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
106
Performance Chemicals – Functional Chemicals
Broad product portfolio and with one of the

largest “Verbund” in phosphorus chemicals
Plastics Africa, Near East

Specialty dyes
Chemical Middle and Far East 4% Water chemicals
34%
Intermediates 29% Europe Colorants
Others 15% 35%
51% Flame
Latin America retardants
North America Plastic additives
7%
25%
Total (2004): €5.1 bn


Main competitors: Akzo, Expected sales growth (CAGR Operating biggest Verbund
Albemarle, BASF, Ciba, 04–06): ~3% system for phosphorus
Clariant, Ferro, FMC, Lonza, Colorants: ~2% Cost advantages due to
Sun Chemicals economies of scale and
Water chemicals: ~2%
backward-integration
Plastic additives: ~2-3%
Specialty dyes: ~5%
Flame retardants: ~5%

107
Performance Chemicals – Functional Chemicals – Products and Main Applications
Numerous applications provided to a variety

of industries
Organic colorants: SOLFORT™, LEVANYL™ Thermoplastics PVC, polyurethane and rubber
Engineering plastics
Paints and coatings
Water treatment
Water chemicals: BAYPURE® Laundry & Cleaning
Flame retardants: DISFLAMOLL®, Printing inks
BAYFOMOX®, LEVAGARD™ Laminate printing
Synthesis chemicals: Bayer Hydrazine, Detergents
LEVOXIN™, Phosphites
Paper treatment
Corrosion inhibitors: BAYHIBIT®
Cosmetics
Plasticisers: MESAMOLL®, ADIMOLL®,
ULTRAMOLL®, UNIMOLL®, Triacetin
108
Performance Chemicals – Functional Chemicals
One of the largest production networks

(“Verbund”) for phosphorus chemicals
Flame Retardant
Chlorination Packaging &
Raw Materials Plasticisers Logistics
Oxidation
Water Treatment
Agents
Phosphorus Triaryl Phosphate

Phosphorus Phosphorus
Chlorine
Trichloride Oxychloride Trialkyl Phosphate
Oxygen
Dialkyl Alkyl
Phosphonates
109
Performance Chemicals – Functional Chemicals – Positioning in the Market
Strong market and technology position in

niches with strong customer relationships
Economies of scale including one of the Sustainability of niche positions
largest “Verbund” systems globally for Change in the competitive environment due to
phosphorus chemicals further consolidation
Long-term patent protection for product Increasing price pressure in commodity
technologies segments
High expertise and know-how in flame
retardants
Strong existing customer relationships in niche
markets
Leading market positions* in niche markets
with MACROLEX®, PY150, bonding agents,
specialty plasticisers, phosphor flame
retardants
Low exposure to raw material volatilities and
cycle effects
110
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
111
Performance Chemicals – Leather
Leather has a broad product portfolio and

leading market positions
Clothing Latin America

Furniture North America
2% Others 12%
13% Others Finishing
23% 10% auxiliaries
Inorganic
tanning
Automotive Dyes/ pigments
Shoes Europe Syntanes
20% Asia
45% 24%
51%
Total (2003): €2.4 bn


Main competitors are: BASF, Expected sales growth (CAGR 03– Backward-integration into ore
Clariant, Stahl and TFL 07): ~1% mines, resulting in strong position
Finishing: ~1% in chrome
Dyes/ pigments: ~1% Syntan plants with favourable
economies of scale leading to
Syntanes: ~1% cost-based advantages
Decentralised custom
manufacturing plants in main
markets

112
Performance Chemicals – Leather – Products and Main Applications
Provider of full product portfolio for leather

industry
BAYMOL®, BAYKANOL®, CISMOLLAN™, Wet-end auxiliaries
PREVENTOL®, XERODERM®
BAYCHROM®, CHROMOSAL®, Mineral tanning and retanning materials
BLANCOROL™
SETA™* Vegetable tanning and retanning materials
BAYKANOL®, LEUKOTAN®**, LEVOTAN®, Synthetic organic tanning materials and
LUBRITAN™**, RETINGAN®, TANIGAN® dyeing auxiliaries
ACIDERM®, BAYCOLOR™, BAYGENAL®, Colorants
BAYDERM®, EUDERM®, EUKANOL™,
LEVADERM®
AQUADERM™, BAYDERM®, EUDERM®, Finishing resins, polymer dispersions
HYDRHOLAC™, PRIMAL®**
ACRYSOL™**, AQUADERM™, BAYSIN™, Finishing auxiliaries
EUDERM®, EUKANOL™, EUSIN®,
ISODERM®, PERSIDERM™, PRIMAL®**,
XERODERM® Solvent-containing top coats
BAYDERM®, EUSIN®, ISODERM® Special processes (for patent leather and
BAYGEN™, LEVACAST™ upgrading splits)
*trademark of SETA S/A
**trademark of Rohm & Haas
113
Performance Chemicals – Leather
A backward integrated leading producer of

leather chemicals in all three process steps
Wet-end / Water Shop Finishing
Slaughter over to
from and
Cattle Tanning Finished
Raw Hide Crust
(e.g. Wet Blue) Leather
1. Soaking 9. Saming 16. Staking

Process
step with
2. Incinerating 10. Splitting
demand
for chemicals 3. Unhairing
Partial LXS- 4. Fleshing 11. Neutralisation
LEA Activities 5. Splitting 17. Finishing
6. Deliming 12. Retanning
LXS-LEA
7. Pickling 13. Dying
Activities
Chrome Tanning 14. Fatliquoring
8. Tanning 18. Plating
Vegetable Tanning 15. Drying
LANXESS operates a chrome mine and processes the ore to chromic acid,
sodium dichromate and chrome tanning salts for tanning purposes
114
Performance Chemicals – Leather – Positioning in the Market
Good customer relationships due to strong

application know-how and technical service
Strong network of technical service personnel Increasing competitive pressure
supporting customer needs Strategic re-orientation of competitors
Local production and compounding facilities Country risk due to production in politically
providing cost and service advantages volatile countries
Application know-how providing flexibility to Dependence on globally operating customers
respond to changing market demands
Continuous need for innovation and product
Partnership in the field of Acrylics with Rohm development in automotive segment
& Haas
Partnership in the field of vegetable tanning
materials with Seta S/A
Backward-integration into chrome mining
Strong and established customer relationships
Broad product portfolio offering complete
solutions to the customer
115
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
116
Performance Chemicals –Textile Processing Chemicals
Textile Processing Chemicals offers a broad

product portfolio for the textile industry
Carpets Others
15% Asia OBA &
30% EMEA/ RoW
33% Textile Printing Pretreatment
36%
Automotive
5% Latin America Dyeing
North America Finishing
Apparel 6% Auxiliaries
25%
50%
Main competitors are: BASF, Expected sales growth (CAGR 03– High relevance of raw material
CHT, CIBA, Clariant, Cognis 09): ~1% costs
Pretreatment: ~ -1% Leading in production
technology
Dyebath additives: ~ -1%
High sophisticated synthesis
Textile printing: ~1% plant provides tailor-made
Finishing: ~2% products for customer - adapted
formulations in the regions -
Composite Production Flow
(CPF)
Source: LXS estimates partially based on SRI International - SCUP - Textile Chemicals, December 2001
117
Performance Chemicals –Textile Processing Chemicals – Products and Main Applications
BAYGARD® and BAYPROTECT® offer a

variety of applications in the textile industry
Pretreatment: Apparel
BAYLASE®, BAYSOLEX®, DIADAVIN®, Carpet / Home textiles
ERKANTOL®, LEVAPON®, PLEXENE™, Automotive
TANATERGE®, TANNEX® Technical textiles
Dyeing Auxiliaries: Fibers
ASTRAGAL®, AVOLAN®, LEVEGAL®,
LEVOGEN®, LUBIT®, TANASPERSE™,
TANAPAL®, TANADEL™, TANEDE™
Finishing:
BAYGARD®, BAYPRET®, CELLOLUBE™,
PERSOFTAL®, SYNTHAPPRET®, EULAN™
Textile Printing:
ACRACONZ™/ACRACONC™, ACRAFIX®,
ACRAMIN®, NOFOME™, TANAPRINT®
118
Performance Chemicals – Textile Processing Chemicals
Global producer of textile auxiliaries
Fiber Industry Textile Industry e.g. Garment Industry

Whitener Dyes
Spinning (natural) Pretreat- Garment

Weaving Bleaching Dyeing Finishing Printing Branding Retailing
Extrusion (synthetic) ment production
Local Technical Service
Formulation
Steps
Synthesis Trade
Steps
Goods
Raw
Materials
Raw
Materials
Partial LXS- LXS-TPC
TPC Activities Activities
119
Performance Chemicals –Textile Processing Chemicals – Positioning in the Market
Strong technology and manufacturing

expertise for high product quality
High product quality and reliability of delivery Customers further moving into low-cost
A market leader* in chromojet applications countries
High degree of expertise in manufacturing/ Acceleration of fashion lifecycles requiring
technology leadership need for innovation/ active portfolio
management
Strong product stewardship
Increasing price pressure
New environmentally required products for
pretreatment and dyebath additives
120
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
121
Performance Chemicals – Paper
Broad product portfolio with leading

technology position
Others Newsprint Asia ROW

19% 7% 15% Others Dyestuffs /
9%
Tissue & Latin America Strength Pigments
Towel 2%
Sizing
10%
agents
Printing &
Packaging North America Europe Retention Fluorescent
Writing
12% 36% 38% Agents Whitening
52%
Total (2002): €9 bn Agents
Source: LXS estimates partially based on SRI Int.
based on global sales 2003 SCUP - Specialty Paper Chemicals Dec. 2003

Main competitors are: BASF, Expected sales growth Leading technology position
Ciba, Clariant, EKA, Hercules, (CAGR 01–07): ~3%
Kemira, Nalco Dyes/ Pigments: ~2%
Strength: ~4%
Sizing: ~4%

122
Performance Chemicals – Paper – Products and Main Applications
Provider of full product portfolio for the paper

industry
Fluorescent Whitening Agents: Newsprint
BLANKOPHOR® Packaging & Board
Dyestuffs:LEVACELL® , PONTAMINE® Printing & Writing
ASTRA™, VERONA™ Basic
Specialties
Pigments: PONOLITH®, HALOPONT™
Tissue & Towel
Internal Sizing: BAYSIZE® I
Surface Sizing: BAYSIZE® S
Strength Additives: BAYSTRENGTH™,
NADAVIN™, PAREZ ®
Retention: RETAMINOL®
123
Performance Chemicals – Paper
Global producer of paper chemicals

largely in two process steps
Material Paper Final Mechanical
Finishing Treatment
Preparation Production
6. Drainage
1. Pulping
7. Pressing
2. De-Inking 8. Drying
3. Refining 12. Rewinding
4. Cleaning 9. Surface 11. Coating 13. Finishing
Treatment 14. Packing
5. Addition of
Paper Chemicals 10. Calandering
Retention Aids Starch Latex

Promoters Surface Strength Dyes Process
Deinking, Defoamer Additives FWA step with
Sizing Agents demand
Biocides, Sizing Agents Defoamer for chemicals
Dry Strength Defoamer Pigments Partial LXS-
Wet Strength, Dyes Dyes Micro Capsules PAP Activities
FWA, Bleaching FWA Coating Additives
LXS-PAP
Chemicals Activities
White Pigments, Starch
Fixatives, Softeners
124
Performance Chemicals – Paper – Positioning in the Market
Paper has leading technology and process

expertise in major paper chemicals
World-scale FWA facility providing cost Continuing price pressure
advantages Intensifying competition in technical service
Process expertise results in competitive cost Overcapacities
positions
Third-party suppliers bypassing role as
Technology leadership leading to product distributor
innovation
Market consolidation
Broad product portfolio
Dependence on limited number of suppliers
Strong position in Dyes and FWAs and in
ASA-sizing in North America
Regional service centres in proximity to
customers
Established global organisation
125
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
126
Performance Chemicals – RheinChemie
RheinChemie has strong service and

application expertise
Others Polyurethane/
Footwear
10% Asia Plastics
Construction 10% 34% Europe Lubricant oil Colour pastes
10% 33%
Automotive/
Americas Rubber
Transportation
33%
70%
based on global sales 2003 Total (2003): €2 bn

One of the leading global Expected sales growth (CAGR Regional production in rubber
suppliers of technical services 02–05): ~2% has competitive advantage
and additives, especially of LOA: ~1% Innovation leader regarding
polymer dispersion chemicals products and services in served
for rubber industries and anti- Rubber: ~2%
market segments
hydrolysis agents for plastics PU: ~4%
and polyurethane iSL: ~5%

127
Performance Chemicals – RheinChemie – Products and Main Applications
Strong supplier of diverse product portfolio

to the automotive industry
Polymer-bound chemicals: RHENOGRAN®, Technical rubber goods (e.g. profile, hoses)
Polydispersion Tyres
Processing promoters: AKTIPLAST®, Metalworking fluids
AFLUX®
Hydraulic oils
Specialty polymers and additives:
STABAXOL®, UREPAN™, RHENOBLEND® Industrial gear oils
Corrosion inhibitors: ADDITIN™ Anti-corrosion inhibitors
Antiozonants: ANTILUX® Greases
Vulcanisation activators: RHENOFIT® Technical plastic additives
Colour pastes & lacquers: Polyurethane industry

ISOPUR™/BAYFLEX™, MOLTOPREN™, Polyurethane colour pastes
ISOTHAN™
Sulphur carrier and anti-wear agents:
ADDITIN™
128
Performance Chemicals – RheinChemie
Polymer-bound chemicals for tailor-made

products
Binder
Systems
Rubber
Chemicals
Preparation
Kneader Extruder Strainer
Weighing
Talcum
Packaging Cooling Granulator
129
Performance Chemicals – RheinChemie – Positioning in the Market
Strong technical and R&D know-how with

global service network
Close proximity to customers Product substitution (replacement of rubber by
Broad product portfolio in product group thermoplastic elastomers)
Rubber
Strong global sales and service network
Positive company image with strong brand
Strong technical know-how and customer
specific product solutions
Leading capabilities in new product
development
130
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
131
Performance Chemicals – Rubber Chemicals
Rubber chemicals has leading market and

technology positions in a challenging market
Construction
Footware Phenyline
Mechanical 2%
1% EMEA Diamine (PPD)
Engineering APAC Specialties
44% 28%
12%
Thiazoles
Chemistry Automotive/ Americas Sulphenamides
21% transportation Quinoline (TMQ)
28%
64%
Total (2003): €1.3 bn

1. Flexsys Overcapacities have led to strong World-scale plant for
price pressure and caused a accelerators
2. LANXESS significant loss of sales in the
3. Crompton industry Leading technology position
Total or partial exit of competitors
already started
Expected volume growth
based on global sales (CAGR 03–06):
~1% in Europe and North America,
Source: Freedonia Group, World Rubber ~4% in Asia
Processing Chemicals, September 2002
132
Performance Chemicals – Rubber Chemicals – Products and Main Applications
Broad product portfolio to enhance rubber

properties
Accelerators: VULKACIT®, Zinc Oxide Enhance the mixing and/ or processability of
Transparent, ZINKOXYD AKTIV™ elastomers, blends or their rubber compounds
Antidegradants: VULKANOX®
Achieve certain properties in the elastomer or
Antioxidants: VULKANOX®
the finished rubber article/ latex product, e.g.
Bonding agents: COHEDUR® by means of cross-linking (vulcanisation)
Cross Linkers: VULCUREN®,
ZINKOXYD AKTIV™ Protect an end product against effects on its
Curing Agent: Colloidal Sulphur 95 properties or from degradation (e.g. oxidation)
Emulsifiers: EMULVIN®W under in-service conditions
Fillers: VULKASIL®, ZINKOXYD AKTIV™,
Zinc Oxide Transparent
Latex Chemicals: Coagulant WS,
EMULVIN®W
NaMBT
Non-Staining Antiozonants: VULKAZON®
Peptising Agents: RENACIT®
Retarders: VULKALENT®
Stabilisers: EMULVIN®W
Synthetic Plasticisers: VULKANOL™
133
Performance Chemicals – Rubber Chemicals
A leading* producer of rubber chemicals for

tyre industry and technical rubber products
Finishing &
Raw Material Condensation Condensation
Logistics
Sodium Mercapto-
Aniline Vulcanisation Accelerators
benzothiazole ®
+ CS2 ( VULKACIT )
+ Amine
Finishing &
Raw Material Condensation Hydrogenation
Logistics
Aniline 4-Aminodiphenyl-
Antidegradant
+ P-Nitro- amine (4 ADPA) ®
( VULKANOX 4020 )
benzene + Hydrogen
Finishing &
Raw Material Condensation
Logistics
Aniline Antidegradant
®
+ Acetone ( VULKANOX HS )
134 *based on global sales, source: Freedonia Group, World Rubber Processing Chemicals, September 2002
Performance Chemicals – Rubber Chemicals – Positioning in the Market
Established market positions for broad

product portfolio in all relevant global markets
World-scale plant for accelerators and Increasing competition from low-cost countries
competitive process lead to cost-based Market further moving to Asia
advantage
Broad product portfolio
Coverage of all relevant global markets
Well established market position
Reputation as provider of high quality products
Modern production for antidegradants in
Europe
135
Products
Performance Rubber
Leather
Textile Processing
Chemicals
Paper
RheinChemie
Rubber Chemicals
Ion Exchange Resins
136
Performance Chemicals – Ion Exchange Resins
Ion Exchange Resins has strong market

positions
End Uses Global
Global Demand
Demand Products
Products
ROW
Chemistry / Others
Nutrition Asia 5%
25% Europe Non-Water
25% 30% 30%
Water
Industrial water Americas

treatment 35%
50%

Main competitors are: Dow Expected sales growth Competitive cost positions
Chemical, Purolite, Mitsubishi (CAGR 03–06): ~2-3% Good technological positions in
Chemical and Rohm & Haas Water: ~1-2% all product groups
Non-Water: ~4% Good international market
coverage and customer
presence

137
Performance Chemicals – Ion Exchange Resins – Products and Main Applications
Product portfolio serving water, foodstuff and

catalysis and chemical processing industry
LEWATIT® as ion exchange resin Water:
IONAC® as ion exchange resin industrial water treatment, potable water,
ultrapure water
Foodstuffs:
treatment of solutions for the food
production
Catalysis and chemicals processing:
treatment of waste water and process
streams in the chemical industry
138
Performance Chemicals – Ion Exchange Resins
Setting milestones in industrial water

treatment processes
The highly efficient fluidized bed system (as one example) originates from a LANXESS development
and is nowadays considered as the standard in modern industrial water demineralisation. The
introduction of monodisperse resins of the LEWATIT® MonoPlus kind has allowed to increase the
efficiency of such processes even further.
139
Performance Chemicals – Ion Exchange Resins – Positioning in the Market
Strong technical and process expertise under-

pins reputation as a premium quality supplier
Established market presence and perceived Continuing price pressure for standard
as premium quality supplier products
Process know-how i.e. technology leadership Substitution by reverse osmosis (R/O) in water
in monodisperse ion exchange resins results treatment applications
in process-based competitive advantage Shift in competitive landscape due to further
Global market presence consolidation
High technical marketing know-how and Environmental legislation
service expertise
140

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Lanxess Fact Book 2004

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BREAK

Dr. Axel Claus Heitmann (CEO)

Following two years as a plant manager, he transferred to

Mr Heitmann is married and has two children.

Dr. Ulrich Koemm

In 1988, Koemm was transferred to Bayer do Brazil where

On September 16, 2004, Ulrich Koemm has been named

Mr Koemm is married and has four children.

Dr. Martin Wienkenhöver

In April 1999 he was appointed General Manager of the

Mr Wienkenhöver is married and has four children.

Matthias Zachert (CFO)

He subsequently joined the International Management

In summer 2002, he moved to Düsseldorf to become Chief

Lean organisation, operating globally

Business Units Group Functions

Chemical Intermediates RheinChemie Procurement Human Resources

Businesses grouped in four segments

Polybutadiene Rubber Semi-Crystalline Products Fine Chemicals Functional Chemicals

Ion Exchange Resins

Performance Engineering Chemical Performance

Sales: €1.375 bn Sales: €1.401 bn Sales: €1.411 bn Sales: €1.925 bn

Assets by Region Employees by Region

17 All figures are based on Combined Financial Statements

Summary of key financials

18 All figures are based on Combined Financial Statements

Diversified customer and supplier base

Top 10 suppliers*: 70% of raw material spend

Top 10 raw materials**: 1,3-Butadiene, Styrene, Acrylonitrile,

Manageable impact on operating profit due to

 ability to partially pass through higher raw material

*estimates, based on 2003 sales

Culture of strict adherence to all

Contractual relationship with Bayer*

goods and services

*expected for 2005

LANXESS continues service relationships

– Technical consultancy – IT operations – Contractual relationship

– Engineering – Contractual relationship

– Technical services – Waste management, – LANXESS expected to pay ca.

Benefits to LANXESS due to outsourcing of non-core activities and through

Sales Contribution 9M 2004 EBITDA Contribution 9M 2004

24 All figures are based on Combined Financial Statements

A leading* rubber producer with strong market

 Automotive and tyre industries as the major end-users

Summary of key financials

26 All figures are based on Combined Financial Statements

Slight increase in sales due to strong overall

27 All figures are based on Combined Financial Statements

Lower depreciation base and price increases

28 All figures are based on Combined Financial Statements

World-class European and North American

Technical Rubber Products

Turning market leadership into value

 Butyl rubber, polybutadiene rubber and technical rubber products managed

Strong market & technology position as basis

- Adhesives  Regular Butyl Rubber

Competition Market Development Cost/Technology Position

Tyres are the main applications for Butyl

ability to partially pass through higher raw material

Automotive and tyre industries as the major end-users

Butyl rubber, polybutadiene rubber and technical rubber products managed

- Adhesives Regular Butyl Rubber

Scale advantages Price pressure in tyre market likely to occur

Strategic raw material (butadiene) is secured

Mechanical engineering (hoses, tubes, cables,

Hydrogenated nitrile-butadiene rubber (HNBR) Building materials (membranes, seals, FRNC

Ethylene-vinyl acetate rubber (EVM)

Broad range of product and system solutions

Impairment charges of €356 m, restructuring Despite higher raw material prices,

Antwerpen, Belgium Camacari, Brazil

Defend leading* positions in Europe, Americas and India

Regional organisation and manufacturing High complexity in “small lot“ business

Strong expertise in differentiated and coloured