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The control room of the new Baytubes® production facility showing the top of the fluidized bed reactor.

Abstract:
nvestment boosts widespread industrial use of Baytubes® / Further capacity increases planned in the medium term

Carbon nanotube capacity expanded

Laufenburg, Germany | Posted on September 5th, 2007

Bayer MaterialScience AG is opening a second production facility for Baytubes®, its carbon nanotubes, at H.C. Starck GmbH in the town of Laufenburg on the German-Swiss border. The new facility has an annual capacity of 30 metric tons. Together with the pilot production plant for Baytubes® already located at the site, this now gives Bayer MaterialScience a total annual capacity of 60 metric tons in Laufenburg. Dr. Tony Van Osselaer, the member of the Board of Management of Bayer MaterialScience responsible for Production & Technology, told customers from all over the world who attended the opening ceremony: "This makes us one of the world's leading manufacturers of carbon nanotubes and underlines our excellent credentials as a research-oriented company. Carbon nanotubes' potential for innovation will ensure their long-term market success."

Estimates put the market potential for carbon nanotubes (CNT) in the coming years at several thousand metric tons per year. The main disadvantages of CNT production processes to date have been the high costs of synthesis and the relatively large quantities of unwanted impurities in the product. These two problems have prevented the widespread industrial use of carbon nanotubes. Thanks to a special new synthesis process, Bayer MaterialScience is one of the few manufacturers able to offer commercially relevant quantities of CNT with consistent material purities well above the 95 percent mark. "The investment in Laufenburg represents an important step towards gaining access to large, lucrative industrial CNT applications and securing long-term market share," said Martin Schmid, head of global Baytubes® operations at Bayer MaterialScience.

The Laufenburg location has a number of advantages for Baytubes® production. Firstly, as a world leader in the production of refractory metals, engineering ceramics and electronic chemicals, H.C. Starck has the necessary technical and logistics setup - for example, in terms of production facilities, energy and gas supplies and waste gas purification. Secondly, Bayer MaterialScience benefits from H.C. Starck's many years of expertise in processing technology and systems design for high-temperature gas phase processes. "In H.C. Starck - a specialist in customized particle design - Bayer MaterialScience has the ideal partner for the successful manufacture and further development of Baytubes®. Our success in up-scaling this sophisticated production process offers impressive proof of this," said Dr. Heinz Heumüller, Managing Director of H.C. Starck.

The new, highly automated closed-loop facility is used for production and for development work to optimize processes and procedures. "Our aim is to use the knowledge obtained for the next up-scaling of the production process," explained Dr. Ralph Weber, Production Manager for Carbon Nanotubes, who shares responsibility for the operation and further development of the facility in Laufenburg with Dr. Theo König from H.C. Starck. In the medium term, Bayer MaterialScience is planning to build a large-scale Baytubes® production facility in Germany with an annual capacity of 3,000 metric tons.

CNT have unusual properties. Depending on their molecular structure, they can either conduct electricity better than copper or act like a semiconductor. Their thermal conductivity rivals that of diamond, the best naturally occurring conductor of heat, and their high modulus of elasticity and tensile strength gives them five times the mechanical strength of steel.

Bayer MaterialScience helps numerous companies develop applications for Baytubes®. The aim is to build up a broad CNT application spectrum. For example, Baytubes® have tried-and-tested antistatic properties in machine components made from polyether etherketone (PEEK). The manufacture of antistatic packaging films for computer chips and plastic containers for the protected transport of integrated circuits also provides great potential. In automotive engineering, Baytubes® could be added to plastics used for bodywork components. These components - for example fenders made from a polyphenylene oxide/polyamide blend - would then not have to be given a conductive primer, thus resulting in significant cost savings. A number of sports goods manufacturers already use Baytubes® to improve the strength and stiffness of plastics. Applications in this field include surfboards, baseball bats, and sticks for cross-country skiing and Nordic walking.

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About Bayer MaterialScience AG
With 2006 sales of EUR 10.2 billion (continuing operations), Bayer MaterialScience is among the world’s largest polymer companies. Business activities are focused on the manufacture of high-tech polymer materials and the development of innovative solutions for products used in many areas of daily life. The main segments served are the automotive, electrical and electronics, construction and sports and leisure industries. Bayer MaterialScience has 30 production sites around the globe and employed approximately 14,900 people at the end of 2006. Bayer MaterialScience is a Bayer Group company.

About H.C. Starck:
The international H.C. Starck Group has over 3,400 employees at 13 sites worldwide. In 2006, the Group generated sales of EUR 985 million.
H.C. Starck produces a globally unique range of powders from the refractory metals tungsten, molybdenum, tantalum, niobium and rhenium and their compounds (borides, carbides, nitrides, oxides, silicides and sulphides). Other products include ceramic powders, sintered metal powders, thermal spray powders, non-ferrous metals such as nickel and cobalt and their salts, plus boron and boron compounds. Besides metallic powders, the company also produces semi-finished and finished products made from molybdenum, tungsten, tantalum, niobium, titanium, zircon and nickel and their alloys. In addition, H.C. Starck makes specially formulated electrically conductive polymers and silica sols for the electronics industry. In the field of engineering ceramics, H.C. Starck boasts a wide range of ceramic precursors. The subsidiary H.C. Starck Ceramics GmbH & Co. KG manufactures customized machine and engine components and foundry products made from silicium carbide, silicium nitride, aluminum titanate, and zirconium and aluminum oxide. The H.C. Starck portfolio also includes powders and components for use in high-temperature solid oxide fuel cells (SOFCs).

More information can be found at http://www.bayermaterialscience.de . Information about the company’s participation in K 2007 can be found at
http://www.k2007.bayermaterialscience.com .

Forward-Looking Statements
This news release contains forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our public reports filed with the Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Form 20-F). The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

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Contacts:
Thomas Reinert
Head of Communications
Address: Bayer MaterialScience AG
Building: W 1
Germany-51368 Leverkusen
Telephone: + 49 (0) 214-30-81941
Telefax: + 49 (0) 214-30-67779

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