Degussa Rearranges its Food and Feed Activities

Degussa AG of Dusseldorf is rearranging its food and feed activities, and in this connection is disbanding its Health & Nutrition Division effective April 1, 2003. In this process, the business units that make up the division, namely Flavors & Fruit Systems, BioActives, Feed Additives, and Texturant Systems, are to be allocated to other Degussa divisions. The reason for the decision lies with the differing market structures applicable to food and feed activities and the resulting lack of synergistic potential. At the same time, the measure will allow Degussa to simplify its organizational structure still further.

The Flavors & Fruit Systems, BioActives, and Texturant Systems activities will continue to be core operations and will thus remain a subject of targeted expansion. Since all three business units are aligned to the end market within the food sector, they will be gathered together into a new business unit and managed as business lines. The new business unit will have sales of approx. € 600 million, which is comparable to other Degussa business units. This concentration of food activities into a single business unit will also improve Degussa's ability to meet market requirements and enable it to serve food industry customers with a broad range of single-source products.

Due to its proximity to the end-consumer markets, a factor that also characterizes Degussa's operations in the area of cosmetics, hygiene and care specialties, this newly-created business unit is to become part of the Performance Chemicals Division, which is to be renamed Performance Materials.

A decision will be taken soon regarding the future head of the new business unit, which like the previous division will be based in Trostberg.

The Feed Additives Business Unit, also a core business of Degussa, will be made part of the Fine & Industrial Chemicals Division since it has pre-products in common with the division's activities.

Degussa is a multinational corporation consistently aligned to highly profitable specialty chemistry. With sales of 11.8 billion Euro and a workforce of some 48.000, it is Germany's third-largest chemical company and the world market leader in specialty chemicals. In fiscal 2002, the corporation generated operating profits (EBIT) of more than 900 million Euro. Degussa's core strength lies in highly-effective system solutions that are tailored to the requirements of its customers in over 100 countries throughout the world. Degussa‘s activities are led by the vision "Everybody benefits from a Degussa product – every day and everywhere

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