Dow and Aksa Sign Joint Venture Agreement for Carbon Fiber and Derivatives

The Dow Chemical Company (NYSE: Dow), through its wholly-owned subsidiary Dow Europe GmbH, and Aksa Akrilik Kimya Sanayii A.S. (ISE: AKSA) today signed a definitive agreement to form a joint venture to manufacture and commercialize carbon fiber and derivatives.

The joint venture will develop and globally market a broad range of products and technical service support in the rapidly expanding carbon-fiber based composites industry. Very strong and lightweight, carbon-fiber based materials are used in a variety of applications in growth industries such as wind energy, construction, transportation, and infrastructure, where weight savings, emissions reduction, durability and energy efficiency are key performance factors. Currently, the carbon fiber composites industry is estimated at $10 billion U.S. dollars globally and is expected to reach $40 billion US dollars by 2022.

Under terms of the agreement, Dow and Aksa will each hold a 50 percent stake in the joint venture. Following initial equity investments from the two companies, the JV will finance its growth through cash flow from operations and financial institutions. Total investment in the project, including third party investments, is expected to reach $1 billion U.S. dollars in five years and create up to 1,000 employment opportunities.

The JV will expand on Aksa’s existing carbon fiber production assets in Yalova, Turkey, and will capture growth by creating a large-scale, integrated production capability for the manufacture and supply of advanced carbon fiber technologies. The venture will have a particular focus on bringing solutions to market that reduce overall costs, thereby enhancing economics and driving adoption in a broader array of markets.

Dow Chairman and CEO Andrew Liveris said, "This partnership with Aksa is another strong example of how Dow is advancing its innovation and growth strategy, and demonstrates our unwavering commitment to invest in high-value, innovation-rich sectors through strategic partnerships. Together our companies will apply science, world-class manufacturing capabilities and technical expertise to deliver innovative solutions that address some of the world’s most pressing challenges, such as increasing the energy capture of wind turbines, improving the fuel economy of automobiles, and extending the life of roads and buildings.”

Akkök Group of Companies Chief Executive Officer and Aksa Board Chairman Mehmet Ali Berkman said, "Making Turkey the second biggest acrylic fiber market in the world with its leading position in technical fiber and production capacity in acrylic fiber, AKSA has achieved an important position in the international market with the carbon fiber. Carbon fiber composites, which will replace metal as the material of the future, have significant importance for fundamental industries in Turkey such as transportation (automobile, high-speed train, vessels, heavy vehicles, etc.), wind energy technologies and construction, particularly for earthquake-resistant buildings. The recognition of carbon fiber and carbon fiber composites within the scope of strategically important industries will enable Aksa and Dow to expand their joint investment targets and create significant economic value and employment for Yalova. In addition, this cooperation will contribute to 2023 targets of the Government of Republic of Turkey by creating significant added value and employment in energy efficiency, renewable energy, infrastructure investments and increasing exports.”

Executive Vice-President and Chief Commercial Officer Heinz Haller said, "This joint venture will leverage Dow’s expertise in composites technology, formulation, and technical service as well as market knowledge and channels. Upon completion, the joint venture will be the carbon fiber composites industry’s only large-scale, full-service, integrated solution provider, serving the emerging needs of the world’s leading industries. With this agreement, we aim to create competitive advantage in the global markets in which carbon fiber composites are used.”

Ilker Ayci, President of Turkey’s Investment Support and Promotion Agency, said, "This joint venture represents advancement for Turkey’s industrial and economic diversification into strategically important critical industries aimed at providing value-added solutions to significant and expanding regional and global markets. We are pleased about the formation of an enterprise that will meet the increasing demand for fiber composite technology and bring an opportunity for significant impact on the expansion of value-added exports.”

The joint venture agreement was signed today in a meeting attended by Minister of Industry and Trade Nihat Ergün, President of Turkey’s Investment Support and Promotion Agency Ilker Ayci, Dow Executive Vice President and Chief Commercial Officer Heinz Haller and Akkök Group of Companies Chief Executive Officer and Aksa Board Chairman Mehmet Ali Berkman.

About Dow

Dow (NYSE: Dow) combines the power of science and technology with the "Human Element" to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world's most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company's more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com

About AKSA

AKSA Akrilik Kimya Sanayii A.S. (Istanbul Stock Exchange: ASKA) is the world’s largest producer of acrylic fiber with 308,000 tons per year capacity and more than 14,2 percent share of the worldwide market. Products include acrylic textile fibers, technical fibers, and carbon fiber. Aksa’s mission is to be the choice for acrylic-based textiles and technical fibers, to work efficiently and in harmony with the environment, to be innovative and customer focused. Aksa has around 1,000 employees working at its production site in Yalova Turkey and offices in Istanbul. Aksa’s turnover in 2010 was more than US$850 million, and is expected to exceed $900 million in 2011. Aksa is a member of the AKKÖK Group of Companies which is comprised of 15 companies operating in Turkey’s chemical, energy, real estate and textile sectors. The Group has more than 3,200 employees. In 2010, the Group’s turnover was more than US$2.7 billion. More information about Aksa can be found at www.aksa.com.

About ISPAT (Turkey’s Investment Support and Promotion Agency)

The Investment Support and Promotion Agency of Turkey (ISPAT) is the government organization that mainly provides all relevant services to overseas businesses that want to locate in Turkey. Its range of expert services is tailored to the needs of individual businesses to maximize their international success. ISPAT provides the international investors with all the updated information needed for setting up or expanding a business in Turkey. By optimizing conditions for the business projects of international investors, ISPAT offers services which add value in a number of key areas. For more information; www.invest.gov.tr

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