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Momentive and Zhejiang Plan to Increase Siloxane Production to Meet Growing Demand

Published on 2011-04-27. Author : SpecialChem

ALBANY, NEW YORK and JIANDE CHINA -- Momentive Performance Materials Inc. ("MPM"), a leading global provider of silicones and advanced materials, and Zhejiang Xinan Chemical Industrial Group ("Zhejiang Xinan"), a major provider of agricultural chemicals and organic silicon products, has announced the planned expansion of manufacturing capacity by their joint venture company, Zhejiang Xinan Momentive Performance Materials Co., Ltd.

The joint venture company's plant in Jiande, China, which has annual production capacity of approximately 50,000 metric tons of siloxane, successfully started its first phase of operations in the fourth quarter of 2010. With the expansion, siloxane production capacity is expected to triple to an estimated 150,000 metric tons per year, commencing in 2013. In connection with the planned expansion, Zhejiang Xinan and MPM will make capital contributions of approximately USD33 million and USD32 million, respectively, to the joint venture company for a total new investment of USD65 million. The joint venture company is owned 51 percent by Zhejiang Xinan and 49 percent by MPM.

"We are very pleased with the progress of our joint venture with Zhejiang Xinan Chemical Industrial Group," John Dandolph, Senior Vice President and Managing Director - Asia Pacific, said. "Our commitment to a second phase of this venture reflects both the success of this partnership and our continued focus on investing locally to help serve customers in this important region."

"The start-up of Zhejiang Xinan Momentive demonstrates the early success of the dedicated cooperation and commitment of the two partners," said Wang Wei, Chairman of the Board, Zhejiang Xinan Chemical Industrial Group. "The continued expansion is further proof that we both have high confidence and expectations for a bright future together."

Siloxane is a key starting component in silicone production. Silicones are used in the manufacture of products in a wide range of industries, including automotive, construction, electronics, healthcare, personal care, power & utility and textiles.

About Momentive Performance Materials Inc.

Momentive Performance Materials Inc. is a global leader in silicones and advanced materials, with a 70+ year heritage of being first to market with performance applications for major industries that support and improve everyday life. The company delivers science-based solutions, by linking custom technology platforms to opportunities for customers. Momentive Performance Materials Inc. is an indirect wholly-owned subsidiary of Momentive Performance Materials Holdings LLC.

About the New Momentive

Momentive Performance Materials Holdings LLC is the ultimate parent company of Momentive Performance Materials Inc. and Momentive Specialty Chemicals Inc. (collectively, the "new Momentive"). The new Momentive is a global leader in specialty chemicals and materials, with a broad range of advanced specialty products that help industrial and consumer companies support and improve everyday life. The company uses its technology portfolio to deliver tailored solutions to meet the diverse needs of its customers around the world. The new Momentive was formed in 2010 through the combination of entities that indirectly owned Momentive Performance Materials Inc. and Hexion Specialty Chemicals Inc. The company is controlled by investment funds affiliated with Apollo Global Management, LLC.

About Zhejiang Xinan

Zhejiang Xinan Chemical Industrial Group is located in China's very developed Yangtze River delta area. It was established in 1965 and got listed on Shanghai Stock Exchange in September 2001 and is on China's Manufacturer Top 500 and Global Agrichemical Top 20. The company developed along two core businesses: agricultural chemicals and silicone materials. Its silicone business is vertically integrated, including si-metal. The company is an industry leader and its products have won awards such as China Famous Brands and China Most Competitive Brands.

Forward Looking Statements

Certain statements, including, without limitation, statements regarding expansion of manufacturing capacity and capital contributions in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, our management may from time to time make oral forward-looking statements. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "project," "plan," "estimate," "will" or "intend" and similar words or expressions. These forward-looking statements reflect our current views with respect to future events and are based on currently available data and our current business plans. Actual results could vary materially depending on risks and uncertainties that may affect our operations and other factors. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: our financial performance and substantial indebtedness and the business results, financial condition and sources of financing of our joint venture company. For a more detailed discussion of these and other risk factors, see the Annual Report on Form 10-K for the year ended December 31, 2010 and other filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Source: Momentive Performance Materials


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