• Initial step planned for 30,000 tons graphite electrodes production
  
  

Wiesbaden (Germany) / Kuala Lumpur (Malaysia), August 28, 2006. SGL Carbon will initiate construction of a carbon and graphite hub in Malaysia at the end of 2006. The Company anticipates a total investment of €150 million to €200 million over several years. The first step will be a 30,000 tons graphite electrodes plant for which the initial phase will involve €50 million investment which is included in the already communicated capital expenditure program of SGL Carbon from 2006 to 2008. The start up of the first production stages will begin late 2008. Construction is about to commence following final contractual clarification of some issues with local authorities and suppliers. This is the first new construction of a graphite electrode production plant in 25 years by one of the industry’s leading manufacturers.

SGL Carbon decided on the Malaysia location due to the growing demand by the steel industry in Asia for graphite electrodes, as well as its position as market leader in the ASEAN region. The new factory in Banting Selangor will be the most cost efficient production plant in the world with the highest state-of-the-art technology in the industry based on SGL Carbon's best practices worldwide. The Company is thereby optimizing its global production infrastructure for carbon and graphite products and thus continuing to expand its position as a global cost leader. SGL Carbon is committed to its main objective of margin improvement whilst continuing to maintain its high market share in the region.

“We have large, growing, and loyal customers in the region. We want to move closer to them and grow with them. This will result in benefits in logistics and current assets on both sides,” said Robert Koehler, CEO of SGL Carbon.

The graphite electrode capacity in Malaysia can be expanded up to 60,000 tons as required by the market. As part of the overall investment of €150 million to €200 million, SGL Carbon is in the planning stage to develop the Malaysian hub to manufacture its carbon and graphite product portfolio.

This information was published today during the visit of the German Economic Delegation in Kuala Lumpur (Malaysia) on the occasion of a meeting with the Malaysian Minister for International Trade and Industry, Rafidah Aziz. The German Delegation was headed by the German Minister for Economics and Technology, Michael Glos.

Forward-looking statements:
This document contains opinions on future developments that are based on currently available information and that involve risks and uncertainties that could lead to actual results deviating from these forward-looking statements. The opinions on future developments are not to be taken as guarantees. Rather, the future developments and occurrences are dependent on a multitude of factors, they include different risks and imponderables and are based on assumptions which may prove to be inaccurate. These include, for example, unforeseeable changes in political, economic and business conditions, particularly in the area of electrosteel production, the competitive situation, interest rate and currency developments, technological developments and other risks and imponderables. We see further risks in, amongst other things, price developments, unforeseeable events in terms of acquired companies and Group companies, as well as with the current cost optimization programs. SGL Carbon does not intend to update these opinions on future developments.