BMW and SGL form carbon fibre joint venture

”This joint venture with the BMW Group is a milestone for the use of carbon fibres on an industrial scale in the automobile industry," says Robert Koehler, CEO of SGL Group, which will have a 51% share in the joint venture. "For the first time, carbon fibres are taking on an important role in series vehicle manufacture. This confirms our strategy and shows that carbon fibre technology is becoming increasingly important in the materials substitution process to lighter material. This material will help to reduce CO2 emissions and save natural resources.”

The joint venture plans the construction of two new sites: one in North America for the carbon fibre production;  and the other in Germany for fabrics.

The investment in the first stage of development for both production sites will be €90 million. Construction of the production facilities will begin in 2010. Production is expected to start in the first half of the next decade.

In the final stage of development, annual carbon fibre and fabric consumption is expected to be in the range of several thousand tons a year.

The joint venture will create more than 180 jobs.

German car maker BMW and carbon fibre manufacturer SGL Group, of Weisbaden, Germany, have cooperated in the area of carbon fibre composites for many years.

"This joint venture is designed to be a classic win-win situation," notes Norbert Reithofer, BMW AG Management Board Chairman. "We are acquiring pioneering future technologies and raw materials that we need for our Megacity Vehicle on competitive terms. The SGL Group is moving into the automobile business with us as a strong partner. With our concepts within project i, we are breaking new ground when it comes to vehicle architecture, lightweight design and the use of materials.”

The overall investment for the joint venture will amount to approximately € 230 million subject to BMW confirming all stages of development. BMW – as initially the only customer – guarantees certain minimum purchasing volumes at contractual agreed conditions in the context of safeguarding the overall project.

The transaction is subject to the approval of the relevant antitrust authorities.

Precursor joint venture with Mitsubishi Rayon

SGL Group is also establishing a joint venture with Japanese company Mitsubishi Rayon (MRC) for the production of polyacrylonitrile (PAN) based precursor, a raw material required to manufacture carbon fibres.

This joint venture will further strengthen SGL Group’s long-standing strategic alliance with MRC to secure the long term supply of precursor for the production of specific carbon fibres for the automotive industry.

An agreement in principle has been signed to form a joint venture with MRC two-thirds and one-third SGL Group shareholding. The contract closing is targeted for the end of 2009.

The joint venture will be operated by Mitsubishi and located at its Otake site.