H.C. Starck continues to focus on growth and restructures its service support functions

- Management presents restructuring plans to supervisory board
- H.C. Starck continues to invest in projects to enhance high performance
- Company takes steps to adapt to changed market conditions
Goslar, 25 September 2008 - H.C. Starck, the leading manufacturer of specialty chemicals, advanced refractory metal, and ceramic products, is pursuing its growth and further development as a high performance enterprise. Yesterday, H.C. Starck management presented the strategy and business plans to achieve these objectives to the supervisory board. The company’s priority remains the systematic implementation of its mid-term growth strategy. However, the company is also taking immediate actions to adapt its business strategy in response to increasingly difficult market conditions. The company has already initiated external measures, including price increases. Internally, the company will implement a restructuring plan with the objective of reducing costs, streamlining the organization and enhancing operational flexibility. In addition, the company will transfer part of the tantalum production currently located in Goslar and Japan to Thailand.

Profitable lines of business the foundation for future growth
Over the next three years, H.C. Starck plans capital expenditure of up to €50 million annually in order to reinforce and further expand its existing strong market position in the fields of wolfram, ceramic and metallic powders, surface treatment technology, ceramic components, metallic components and CLEVIOS™. These growth markets are expanding rapidly.

The company is taking action to achieve substantial cost efficiencies in the production of tantalum. In addition, the company is entering into strategic cooperation agreements with raw materials suppliers of tantalum and wolfram to compensate for its current structural disadvantages with respect to its raw materials supply chain.

Restructuring planned
Because of the significant slowdown in the broader chemical sector and the substantially higher prices for raw materials and energy, the H.C. Starck group will not achieve its profitability targets for 2008. In light of the continuing deterioration in business conditions, the company has decided to implement further cost savings measures immediately.Following an extensive process optimization program in the areas of production and technical services over the past eighteen months, the company will now implement a restructuring program for its administrative and other service functions. “Market conditions oblige us to become more efficient and flexible. Our current structure arose during the period when our company was part of a much larger corporation. As a result, we are less streamlined than our competitors and therefore less able to deal effectively with the rapid developments in our industry. We therefore will focus on maximizing the cost savings in our administrative and service functions where there is most potential for such efficiencies,” noted Dr. Heinz Heumüller, CEO of H.C. Starck.

The reduction in staff numbers will affect most of H.C. Starck’s sites around the world, in particular the corporate headquarters in Goslar, where the administrative and service functions are concentrated. Worldwide, a total of approximately 200 positions are expected to be eliminated by the end of this year. Further reductions in headcount are expected in connection with the outsourcing of a number of activities. The company is cooperating with the works council to develop a social plan for the employees affected by these measures.

The supervisory board and management are convinced that the company will resume its successful development upon implementing these strategic and operational measures.

Further information
Manfred Bütefisch
General Manager
Corporate Communications
38642 Goslar/Germany
Phone +49/5321 751 3153
Fax +49/5321 751 4153
Mobile +49/160 886 09 53