SGL CARBON GROUP Announces Restructuring

21-Dec-2001

The SGL carbon GROUP today announced the launch of a cost reduction and restructuring plan for its global Graphite businesses. Its key purpose is to align the Company's structures and costs to increase efficiency and to respond to the ongoing globalization of the customer base. The development of such an initiative had been indicated at the press conference on November 13, 2001. restructuring in Europe results primarily from the integration process following the early 2001 acquired Polish company ZEW. The basic concept is to further realign the plants of the Carbon and Graphite Business Area (CG) into focused factories to improve productivity. Its implementation will lead to a reduction of approximately 200 positions throughout the European plants. Restructuring in North America will concentrate feederstock production for the Specialty Graphite Business Area (SG). To that end, the high cost Niagara Falls (New York) plant will be closed. Production will be absorbed by available capacities at the Morganton (North Carolina) plant in the SGL CARBON GROUP. Machining and finishing operations will be concentrated at St. Marys (Pennsylvania), permitting the closure of three other sites, Dallas and Irving (Texas) and Hillsboro (Oregon). The overall restructuring of the North America Graphite businesses will result in a headcount reduction of approximately 230 people. In conjunction with reducing the number of locations, the Company will also take a pretax write-down of carbon.de/shared/euro.gif> 15 million for inventory items in North America. The total non-recurring charges of the restructuring plan amount to 41 million pretax - approximately 15 million of which are cash related - and will be recorded in the fourth quarter of 2001. Completion of the plan is expected within the next twelve months. The sustainable savings resulting from the restructuring are estimated to reach 22 million already in 2002 and 32 million in 2003, yielding a payback of less than one year based on the cash cost. SGL CARBON is confident that this program will make a significant contribution towards improving its overall competitiveness. The restructuring efforts are an integral part of the company-wide initiative "SGL Excellence" to implement a culture of continuous improvement. In conjunction with this initiative, the Company's key priorities for 2002 are substantial improvement of its cash flow and reduction of debt.

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