Strategy and Goals

ALTANA can look back on a successful first business year in the new Group structure as a pure specialty chemicals company. In 2007, we achieved dynamic sales growth and significantly disproportianal increases in earnings. As a result, we are ideally positioned to continue to reach our demanding targets and create sustained value.

The main corporate goal os to continually increase teh company's value. To achieve this aim, ALTANA's managment relies on profitable growth and a concentration on growing business fields in which we are already the market leader or can become so in the medium term. The central elements of Group control are growth, operating efficiency, and optimum use of capital.

A key factor is our clear strategy. We are concentrating exclusively on specialty chemicals. For us, specialty chemicals means offering technically superior, differentiated products, solutions, and effects which are not simply interchangeable, but which have a unique value for our customers. This value is normally the result of a complete package of product performance and service. We help to improve our customers processes and products and make them more successful in their markets. Our specialty chemicals usually comprise only a small part of the manufacturing costs of our industrial customers, yet they are of overriding importance for the performance of the end products. Therefore, our market environment is characterized by high market entry barriers. Innovation, service, and brand image play a central role.

On the basis of this understanding of specialty chemicals, we are concentrating consistently on global, rapidly growing niche markets. We already hold a globally leading position in the predominant part of our business fi elds. We are concentrating completely on our customers and their current or future needs as well as their requirements regarding technology and expertise. Our global presence with our consciously chosen decentralized structure guarantees that fast, clear corporate decisions can be made close to the markets and the requirements of our customers.

Research and development are highly important for ALTANA. As the market leader, we invest almost twice as much in R&D – about fi ve percent of our sales – than the industry average. 16 percent of our employees worldwide work in R&D. This contributes significantly to the further expansion of our knowledge and our expertise, ensuring us a decisive edge so that we can open up new opportunities and possibilities for our customers in the future.

Despite our strong concentration on specialties in narrowly defi ned markets and applications, we are quite diversifi ed and thus not very susceptible to external risks: We are hardly dependent on individual industries, technologies, customers, suppliers, and applications. Our company is also quite robust vis-à-vis regional economic developments, the availability or price of raw materials, as well as currency risks. Overall, this positioning makes us independent and strong enough to be able to achieve our ambitious growth goals in the long term even in a less favorable economic environment.

In the future, we will continue to strive, on average over several years, for double-digit growth rates per year without diluting our margins. On average, our organic, internal growth should be 6 percent, and an additional 4 percent should be achieved through acquisitions. We constantly check and optimize our portfolio and analyze the market environment for suitable acquisition candidates. But it is also clear that acquisitions have to fi t with the company and its strategy, and create value already in the short term. As a result, we are working systematically and ambitiously, but with great discipline, on possible projects. These can be smaller bolt-on acquisitions for the individual divisions or it is conceivable to acquire a larger company to form a further, fi fth division within ALTANA.

We do have ambitious goals again for 2008. Our primary objective is to further bolster and extend our worldwide market position, particularly in North America, Asia, and the newly forming growth regions. For example, we plan to start operating three new production sites in China in 2008. We intend to keep growing and to even further increase our attractive margins and returns on capital employed.

Second, we will step up our investments in Research & Development. As the market leader, we naturally aspire to be the innovation leader as well. It has become increasingly apparent that in a knowledge-driven business like ours, new opportunities and new possibilities can be created best via innovations. In addition to our customers, our shareholders profi t from this. ALTANA will continue down this path.

Third, we want to continue to grow together as a company, to strengthen our new identity, and to derive even more strength from the Group. Precisely because our business units act largely independently in their respective target markets worldwide, a close coordination is needed in the background. If our new brand architecture with the ALTANA umbrella brand and the independent competence brands BYK Additives & Instruments, ECKART Effect Pigments, ELANTAS Electrical Insulation, and ACTEGA Coatings & Sealants has a common, unmistakable image, this not only motivates employees but also positions ALTANA clearly and unambiguously in the eyes of the public and of journalists and analysts.