May 13, 2005

Degussa Cathay Biotechnology's new L-Lysine facility to commence trial production by end-2005

Construction of the L-Lysine production pant of Degussa Cathay Biotechnology Co. Ltd, a joint venture company between Degussa (China) Co. Ltd. and Shandong Cathay Lineng Biotechnology Co. Ltd., has commenced on April 29. The plant is located at the Cathay site in Jining, Shandong province.

The US$29 million-lysine facility is expected to commence trial production at the end of 2005. The initial annual capacity of the new plant will be 40,000 tonnes of Biolys^®, Degussa's globally established L-Lysine product.

Degussa is the majority shareholder of the joint venture with a 51 percent stake, and Cathay owns a 49 percent stake.

L-Lysine optimises feed formulations, reduces the cost of animal production and minimises the excretion of nitrogen. This essential amino acid has consistently improved the quality and productivity of livestock. As a result, L-Lysine is now a key feed additive for the growing hog and poultry industries in China.