10.10.2006 – 09:38

RHI Magnesita

RHI Refractories establishes new smelting plant in South Africa

  ots-CorporateNews transmitted by euro adhoc.
  The issuer is responsible for the content of this announcement.

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, from the group’s own deposits with sufficient reserves.
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. From 2008, 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 also uses special melting
raw materials in the production of refractories solutions. Roughly
half of the amount required is covered by RHI’s own production. 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 initially two electric arc furnaces
and an annual capacity of 30,000 tonnes 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. RHI’s existing
production in South Africa will also be integrated in the Isithebe
plant.  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%.

end of announcement                               euro adhoc 10.10.2006 09:36:45

Further inquiry note:

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

Branche: Refractories
ISIN: AT0000676903
WKN: 874182
Index: ATX Prime
Börsen: Wiener Börse AG / official dealing