RHI Refractories establishes new smelting plant in South Africa

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The development of RHI Refractories has traditionally been
based on the availability of self-produced raw materials. The roots lie in the magnesite of the Austrian Alps, where RHI has operated its own mines for over 125 years. In 2005, RHI produced more than 1.1 million tonnes of magnesite and dolomite, of which 600,000 tonnes were mined in Austria and nearly 300,000 tonnes in Turkey and Italy respectively. These deposits have proven reserves for more than 20 years. In March 2006, RHI signed a contract with a Chinese partner regarding the establishment of a joint venture to produce top-quality magnesia, in which RHI will hold an 80% share. By the end of 2007, RHI will be able to cover more than 50% of the Chinese plants’ raw material requirements from its own resources. Only few of RHI’s competitors have the know-how and the experience to use such potential for their own refractories strategy. RHI Refractories currently uses approx. 35,000 tonnes of magnesia chrome raw materials in the production of refractories solutions, of which approx. 24,000 tonnes are produced in the group’s own plants. Roughly another 20,000 tonnes of fused alumina raw materials are currently purchased in the market. In order to meet the increasing demand for these very high-grade raw materials optimally in logistical and economical terms, RHI will establish a smelting plant with two electric arc furnaces with an annual capacity of 30,000 tonnes of magnesia chrome and alumina raw materials in Isithebe/South Africa. In addition to inexpensive electrical power and locally available raw materials, this location is situated very close to the harbours of Richards Bay and Durban. The plants will be established at a site leased for the long term. Capital expenditure in the amount of EUR 9 million will be completed by the summer of 2007. In the future, further melting capacity can be added at the Isithebe plant. Moreover, it is also planned to shift the existing RHI production facility from nearby Tugela.
Following the successfully completed restructuring, the RHI Group will in the future focus exclusively on extending its position as the world market leader in refractories under the RHI Refractories brand. Worldwide, there are good opportunities to sustainably expand the excellent market position and earnings power of RHI Refractories in the coming years. The objective is to increase the revenue of approx. EUR 1.2 billion recorded in 2005 to EUR 2.0 billion by the year 2010 through organic growth and acquisitions and to achieve an EBIT margin of at least 10%.

Further inquiry note:
Investor Relations
Dkfm. Markus Richter
Tel: +43-1-50213-6123
Email: markus.richter@rhi-ag.com

end of announcement euro adhoc

emitter: RHI AG
Wienerbergstrasse 11
A-1100 Wien
phone: +43 1 50213-6123
FAX: +43 1 50213-6130
mail: rhi@rhi-ag.com
WWW: http://www.rhi-ag.com
ISIN: AT0000676903
indexes: ATX Prime
stockmarkets: official dealing: Wiener Börse AG
sector: Refractories
language: English