Sustainability Report AG 2009/2010

Wacker Chemie AGSustainability Report 2009 2010

2010 2009 2008

Environmental Protection

Operating costs ( euro million ) 65 65 68

Investments ( euro million ) 12 9 13

Emissions

CO2 carbon dioxide ( t ) 985694 967992 975931

NOx nitrogen oxides ( t ) 926 963 997

NMVOC non-methane volatile organic compounds ( t ) 415 383 501

COD chemical oxygen demand ( t ) 1820 2730 4782

Waste ( total ) ( t ) 125550 144290 161620

Water consumption ( m3 ) 252151000 264532000 241286375

Energy

Electricity consumption ( TWh ) 38 27 24

Primary energy ( total ) ( TWh ) 611 561 561

Occupational Safety

Accident rate accidents per 1 million hours worked 43 40 37

Employees

Female employees groupwide ( ) 218 220 220

Women in third-level management groupwide ( ) 192 186 187

Women as executive personnel groupwide ( ) 68 55 64

Non-German employees Germany ( ) 126 130 135

Fluctuation rate groupwide ( ) 25 25 29

Society

Donations ( euro thousand ) 1011 924 1033

Sponsoring ( euro thousand ) 1150 466 1090

Sustainability Indicators

CoverCompanies can only be profitable in the long term if they take their responsibility toward the environment and society seriously In this report we introduce you to WACKER employees who make their own contribution to sustaina-bility at completely different parts of the company

euro million 2010 2009 2008

Results Return

Sales 47484 37193 42981

EBITDA1 11945 6067 10552

EBITDA margin 2 ( ) 252 163 246

EBIT 3 7646 268 6479

EBIT margin 2 ( ) 161 07 151

Financial result ndash 323 ndash 235 ndash 61

Income before taxes 7323 33 6418

Net income for the year 4970 ndash 745 4383

Earnings per share ( euro ) 988 ndash 143 884

ROCE ( ) 248 09 257

Financial Position Cash Flows

Total assets 55012 45419 46251

Equity 24468 19424 20828

Equity ratio ( ) 445 428 450

Financial liabilities 5334 4397 2724

Net financial receivables net financial liabilities 4 ndash 2640 761 ndash 329

Capital expenditures ( including financial assets ) 6951 7401 9163

Of which payments for acquisitions 812 ndash 1712

Depreciation ( including financial assets ) 4299 5799 4073

Net cash flow 5 4216 ndash 329 217

Research and Development

Research and development expenses 1651 1640 1632

Employees

Personnel expenses 11357 10903 10861

Employees ( December 31 number ) 16314 15618 15922

1 EBITDA is EBIT before depreciation and amortization2 Margins are calculated based on sales3 EBIT is the result from continuing operations for the period before interest and other financial results

and income taxes4 Sum of liquidity and noncurrent and current financial liabilities5 Sum of cash flow from operating activities and noncurrent investment activities

WACKER at a Glance

About this Report

Wacker Chemie AGrsquos sustainability report explains how the Group balances economic interests with environmental and social responsibility In 1989 WACKER was among the first companies to report on its environmental performance We were also among the first to enhance our environmental reports with social and health information creating our first sustainability report in 2002

The present report which builds on WACKERrsquos 2007 ndash 2008 sustainability report is available in English German and Chinese The facts and figures given in this report refer to fiscal years 2009 and 2010 Unless otherwise stated our statements apply to all business divi-sions and sites around the world as well as to every subsidiary in which WACKER is the majority shareholder The information on our Group structure and financial position was taken from WACKERrsquos 2009 and 2010 annual reports To be as up to date as possible we have included an Outlook section in each chapter that addresses current issues as of 2011 ( editorial deadline June 1 2011 )

This report offers an honest and comprehensive account of sustainability at WACKER for the benefit of our customers business partners suppliers shareholders analysts non-governmental organizations and the authorities as well as our employees and neighbors at our various sites We established the main contents through ongoing dialog with our stakeholders and a survey carried out in fall 2010 This international stakeholder survey asked 203 respondents what sustainability topics are most relevant and how well WACKER handles them

Our reporting is based on criteria recommended by future ( a ldquoself-helprdquo initiative run by various German companies ) and IOumlW ( the German institute for Ecological Economy Re-search ) as well as the international Global Reporting Initiative ( GRI ) G3 guidelines An index at the back of the report refers to the pages that contain information on the individual GRI indicators The extent to which we have applied the GRI Reporting Framework in this report is indicated by a self-declared level based on our own assessment (Application Level A) This assessment has been reviewed and verified by the GRI

Our website provides further information on the topics discussed in this report The web links are marked at the end of each text with or Information on WACKERrsquos sus-tainability efforts is also available at wwwwackercomsustainability

Our next sustainability report is scheduled for 2013

Wacker Chemie AGSustainability Report 2009thinspthinsp2010

InterviewthinspwiththinspExecutivethinspBoardthinspthinsp thinsp2FeaturethinspTruethinspNeighborsthinspthinsp thinsp6FeaturethinspOnthinspthethinspRightthinspTrackthinspthinsp thinsp10Milestonesthinsp2008thinspndashthinsp2010thinspthinsp thinsp16

AboutthinspWACKERGroupthinspStructurethinspandthinspOperationsthinspthinsp thinsp21LegalthinspStructurethinspthinsp thinsp22ManagementthinspandthinspSupervisionthinspthinsp thinsp22KeythinspProductsthinspServicesthinspandthinspBusinessthinspProcessesthinspthinsp thinsp23CorporatethinspGovernancethinspthinsp thinsp24ShareholderthinspStructurethinspthinsp thinsp24

SustainabilitythinspManagementCorporatethinspPoliciesthinspthinsp thinsp27BusinessthinspPrinciplesthinspthinsp thinsp27VoluntarythinspCommitmentsthinspthinsp thinsp28Organizationthinspthinsp thinsp30

EnvironmentalthinspProtectionEnvironmentalthinspProtectionthinspinthinspProductionthinspthinsp thinsp44NaturethinspConservationthinspandthinspBiodiversitythinspthinsp thinsp54LogisticsthinspandthinspTransportthinspthinsp thinsp55

ProductthinspSafetythinspandthinspProductthinspStewardshipProductthinspSafetythinspthinsp thinsp61ProductthinspStewardshipthinspthinsp thinsp65

PlantthinspWorkplacethinspandthinspTransportthinspSafetyPreventionthinspthinsp thinsp77IncidentthinspManagementthinspthinsp thinsp81AccidentsthinspandthinspIncidentsthinspthinsp thinsp82

EmployeesPersonnelthinspDevelopmentthinspthinsp thinsp86LifethinspandthinspCareerthinspthinsp thinsp91CompensationthinspandthinspSocialthinspBenefitsthinspthinsp thinsp95EmployeethinspRepresentationthinspthinsp thinsp97HealththinspProtectionthinspthinsp thinsp98

SocietyNeighborsthinspthinsp thinsp104Schoolsthinspthinsp thinsp105Universitiesthinspthinsp thinsp107PoliticsthinspandthinspNGOsthinspthinsp thinsp108Childrenthinspthinsp thinsp109DisasterthinspAidthinspthinsp thinsp110

FurtherthinspInformationGRIthinspStatementthinspthinsp thinsp113GRIthinspIndexthinspthinsp thinsp114Glossarythinspthinsp thinsp118

Further Information

120Wacker Chemie AG Sustainability Report 2009 2010

SSilicaCollective term for compounds with the genshyeral formula SiO2 middot nH2O Synthetic silicas are obtained from sand Based on their method of production a distinction is made between precipitated silicas and pyrogenic silicas (such as HDKreg) Pyrogenic silica is generated by flame hydrolysis and has an almost poreshyfree surface Pyrogenic silica is used as reshyinforcing filler for rubber compounds and sealants matting of paints and toothpaste additives

SiliconAfter oxygen silicon is the most common element in the Earthrsquos crust In nature it ocshycurs without exception in the form of comshypounds chiefly silicon dioxide and silicates Silicon is obtained through energyshyintensive reaction of quartz sand with carbon and is the most important raw material in the elecshytronics industry

SiliconthinspwaferA silicon wafer is a disc with a thickness of between approximately 200 and 800 μm and is used by the semiconductor industry for the manufacture of semiconductor devices i e integrated circuits and discrete composhynents

SiliconesGeneral term used to describe compounds of organic molecules and silicon According to their areas of application silicones can be classified as fluids resins or rubber grades Silicones are characterized by a myriad of outstanding properties Typical areas of application include construction the electrical and electronics industries shipping and transportation textiles and paper coatings

SiloxanesSystematic name given to compounds comshyprising silicon atoms linked together via oxyshygen atoms and with the remaining valences occupied by hydrogen or organic groups Siloxanes are the building blocks for the polyshymers (polysiloxane and polyorganosiloxane) that form silicones

VVulcanizationA chemical process by which with the applishycation of heat and pressure rubber is made resistant to atmospheric and chemical influshyences and mechanical stress Vulcanization (also called crosslinking or curing) makes the rubber permanently elastic in other words it returns to its original state when mechanishycally strained It is also tearshyresistant can be stretched greatly and is more resistant to weathering than the starting product

Interview with Executive Board

Operatingthinspathinspsustainablethinspcompanythinspisthinspnotthinsponlythinspathinspdutythinspndashthinspitthinspalsothinspgeneratesthinspbusinessthinspopportu-nitiesthinspDrthinspRudolfthinspStaudiglthinsp(thinspleftthinsp)thinsptalkingthinsptothinspAugustethinspWillems

2009 and 2010 turned out to be two very different experiences for WACKER The company remained stable in 2009 weathering the economic crisis and then generated record sales and earnings in 2010 Amid all the economic ups and downs WACKER continued its sustainability efforts The following interview was held with Dr Rudolf Staudigl ( President amp CEO ) and Auguste Willems ( Executive Board member responsible for sustainshyability issues )

DistillationDistillation is used to separate the composhynents of liquid mixtures The process is based on differences in the liquidsrsquo boiling points

EEthyleneEthylene is a colorless slightly sweetshysmellshying gas that under normal conditions is lighter than air It is needed as a chemical starting product for a great many synthetic materials including polyethylene and polyshystyrene It is used to make products for the household agricultural and automotive secshytors For environmental and safety reasons ethylene is transported through pipelines

Exteriorthinspinsulationthinspandthinspfinishthinspsystemsthinsp(thinspEIFSthinsp)Systems for thermally insulating buildings and thus for increasing energy efficiency EIFS are made up of a combination of mateshyrials adhesive mortar insulation board base coat glassshyfiber mesh and finish coat VINNAPASreg polymer powders from WACKER POLYMERS ensure that the insulation material bonds firmly to the mortar and finish coat As a result the insulating systems offers greater durability and much more resistance to weathering and wear

FFermentationIn biotechnology fermentation involves the metabolic conversion of biological materials by means of bacteria fungi (including yeast) and cell cultures or their chemical convershysion by the addition of enzymes Starting materials for this process are called ferments

GGreenhousethinspGasthinsp(thinspGHGthinsp)thinspProtocolThe GHG Protocol is an internationally recogshynized instrument for quantifying and conshytrolling greenhouse gas emissions The standards outlined in the GHG Protocol have been jointly developed by the World Busishyness Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI) since 1998 The GHG Protocol specifies how an organization should calculate its greenhouseshygas emissions and how emissionshyreducing programs should be conducted

HHexachlorobutadienethinsp(thinspHCBDthinsp)A chlorinated organic compound which at room temperature is a colorless liquid with a mild odor It occurs as a byshyproduct in certain chemical production and combustion processes such as the synthesis of tetrashychloroethene tri chloro ethene or carbon tetrachloride The EUrsquos water framework dishyrective classifies HCBD as hazardous Based on the results of the European Emission Inshyventory most of the reported emissions originate from organic bulk chemistry

Hydrogenthinspchloridethinsp(HCl)The chemical industry uses HCl to generate valuable intermediates from organic and inshyorganic raw materials The colorless gas dissolves in water to form hydrochloric acid

IIPCCthinspFourththinspAssessmentthinspReportIn 1990 the United Nations Intergovernmenshytal Panel on Climate Change (IPCC) started issuing reports that summarized scientific knowledge on global warming The 2007 Fourth Assessment Report (AR4) is the most recent in the series Published every five to six years these IPCC reports provide inforshymation about the human impact on climate

PPolysiliconHyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries To produce it metallurgicalshygrade silicon is converted into liquid trichlorosilane highly distilled and deposited in hyperpure form at 1000 degC

PrimarythinspenergyPrimary energy is obtained from naturally occurring sources such as coal gas or wind Secondary energy in contrast is derived from primary energy via a transformation process (which often involves energy lossshyes) examples include electricity heat and hydrogen

DrthinspStaudiglthinsp2008thinsptothinsp2010thinspwasthinspathinspturbulentthinspperiodthinspforthinspWACKERthinspHowthinspdidthinspthethinsprecessionthinspimpactthinspsustainabilitythinspmanagementthinspwith-inthinspthethinspcompanyDr Rudolf Staudigl Companiesthinspwiththinspsus-tainablethinsppracticesthinsplikethinspWACKERthinspsur-vivedthinspthethinspcrisisthinspbestthinspMorethinspthanthinspany-thingthinspelsethinspwethinspwerethinspcarefulthinsptothinspkeepthinspourthinspliquiditythinsphighthinspandthinsptothinspavoidthinspamass-ingthinspanythinspadditionalthinspliabilitiesthinspndashthinspbythinspsimplythinspadheringthinsptothinspourthinspsolidthinspbusinessthinsppoli-ciesthinspWethinspcontinuedthinspwiththinspourthinspstrategicthinspinvestmentsthinspthoughthinspperhapsthinspatthinspathinspslightlythinspslowerthinsppacethinspinthinspsomethinspcasesthinspWheneverthinspnecessarythinspwethinspintroducedthinspshort-timethinspworkthinsptherebythinspretainingthinspourthinsphighlythinspqualifiedthinspemployeesthinspThisthinspap-proachthinspmorethinspthanthinsppaidthinspoffthinspwhenthinspwethinspneededthinsptothinsprampthinspupthinspproductionthinspcapac-itythinspquicklythinspFurthermorethinspourthinspemployeesthinspsacrificedthinspathinspportionthinspofthinsptheirthinspsalaries

Auguste Willems Ourthinspbusinessthinspstrategythinspisthinspbasedthinsponthinsplong-termthinspsustainablethinsptrendsthinspThatrsquosthinspwhythinspwethinspreturnedthinsptothinspgrowththinspquicklythinsponcethinspthingsthinspimprovedthinspbecausethinspthesethinsptrendsthinspremainthinspvalid

Dr Rudolf Staudigl ExactlythinspButthinspfluctua-tionsthinspwillthinspalwaysthinsphappenthinspInthinspadditionthinspsustainabilitythinspinthinspbusinessthinspmeansthinspbe-ingthinspablethinsptothinspnavigatethinspsuchthinspfluctuationsthinspThatrsquosthinspwhythinspitrsquosthinspimportantthinsptothinsphavethinspsolidthinspfoundationsthinspandthinspathinspclearthinspcoursethinspWACKERrsquosthinspvisionthinspisthinsptothinspmakethinspanthinspindis-pensablethinspcontributionthinsptothinspprogressthinspandthinspsustainablethinspdevelopmentthinspWethinspbe-lievethinspthatthinspwethinspcanthinsponlythinspbethinspenduringlythinspprofitablethinspifthinspwethinsptakethinspourthinspresponsibilitythinsptowardthinspthethinspenvironmentthinspandthinspsocietythinspseriouslythinspThatrsquosthinspwhythinspsustainabilitythinsphasthinspbeenthinspsothinspdeeplythinsprootedthinspinthinspboththinspourthinspproductionthinspoperationsthinspandthinspbusinessthinspprocessesthinspforthinspyears

MrthinspWillemsthinsphowthinspdidthinspWACKERrsquosthinspsustainabilitythinspmanagementthinspdevelopthinspthinspinthinsp2009thinspandthinsp2010Auguste Willems FirstthinspIrsquodthinsplikethinsptothinspsaythinspthatthinspwethinspadheredthinsptothinspourthinspmissionthinspndashthinspinthinspevery-thingthinspthatthinspwethinspdothinspwethinspstrivethinspforthinspathinspbal-ancethinspofthinspeconomicthinspenvironmentalthinspandthinspsocialthinspfactorsthinspOurthinspcompanythinspisthinspbecomingthinspincreasinglythinspinternationalthinspTothinspharmonizethinspstandardsthinspacrossthinspthethinspGroupthinspwethinspdevelopedthinspourthinspprocessesthinspwiththinspanthinspeyethinsptothinspglobalizationthinspThethinspldquoGlobalthinspEHSthinspExcellencerdquothinspprojectthinspisthinspathinspgoodthinspcasethinspinthinsppointthinspWethinsphavethinspnowthinspes-tablishedthinspuniformthinspglobalthinspstandardsthinspforthinspmanagingthinspEHSthinspandthinspproductthinspsafetythinspInthinspdoingthinspsothinspincidentallythinspwethinspalsothinspad-dressedthinspthethinspgreatestthinspchallengethinspthatthinspstakeholdersthinspidentifiedthinspwhenthinspsur-veyedthinspinthinsp2008thinsptothinspmaintainthinspthethinspsamethinspsocialthinspandthinspenvironmentalthinspstandardsthinspatthinspallthinspourthinspsitesthinspMoreoverthinspinthinsp2011thinspwethinspsetthinspupthinspathinspCorporatethinspSustainabilitythinspde-partmentthinspwhichthinspnowthinspcoordinatesthinspourthinspsustainabilitythinspeffortsthinspthroughoutthinspthethinspGroupthinspandthinspalongthinspthethinspentirethinspvalue-addedthinspchain

CriticsthinspoftenthinspdescribethinspvoluntarythinspthinspbusinessthinspcommitmentsthinspasthinspmerethinsplipthinspservicethinspWhatthinspcommitmentsthinsphasthinspWACKERthinspmadethinspandthinsphowthinspimportantthinsparethinsptheythinsptothinspthethinspcompanyAuguste Willems AbovethinspandthinspbeyondthinspourthinspinvolvementthinspinthinspofficialthinspinitiativesthinspwethinsparethinspdeeplythinspcommittedthinsptothinspsustainablethinspcorporatethinspdevelopmentthinspatthinspWACKERthinspThisthinspvoluntarythinspcommitmentthinspisthinspreflectedthinspinthinspourthinspparticipationthinspinthinspvariousthinspinitia-tivesthinspWACKERthinsphasthinspbeenthinspanthinspactivethinspmemberthinspofthinspthethinspchemicalthinspindustryrsquosthinspglobalthinspResponsiblethinspCareregthinspprogramthinspfromthinspthethinspstartthinspThethinspgoalthinspofthinspRespon-siblethinspCareregthinspndashthinsptothinspgothinspabovethinspandthinspbeyondthinsplegalthinsprequirementsthinspndashthinspisthinspfirmlythinsprootedthinspinthinspourthinspcompanythinspAthinspfewthinspyearsthinspagothinspwethinspalsothinsp

ldquoCompanies with susshytainable practices like WACKER held up best during the crisisrdquo

joinedthinspthethinspUNrsquosthinspGlobalthinspCompactthinspandthinspnowthinspcomplythinspwiththinspitsthinsptenthinspprinciplesthinspwethinspsafeguardthinsphumanthinsprightsthinspmaintainthinspso-cialthinspandthinspenvironmentalthinspstandardsthinspandthinspfightthinspcorruptionthinspWhatrsquosthinspmorethinspthisthinspcommitmentthinspextendsthinsptothinspourthinspsuppliersthinspwhothinspmustthinspalsothinspabidethinspbythinspthethinspGlobalthinspCompactrsquosthinspprinciples

Dr Rudolf Staudigl Speakingthinspofthinspcorruptionthinsprisksthinspwethinspexpandedthinspourthinspglobalthinspnetworkthinspofthinspcompliancethinspofficersthinspandthinspintensivelythinsptrainedthinspourthinspemployeesthinspinthinsplegallythinspandthinspethicallythinspappropriatethinspconductthinsp

OperatingthinspathinspsustainablethinspcompanythinspthinspisthinspnotthinsponlythinspathinspdutythinspndashthinspitthinspalsothinspgeneratesthinspbusinessthinspopportunitiesDr Rudolf Staudigl WACKERthinspseesthinspplentythinspofthinspopportunitiesthinspAsthinspwersquovethinspsaidthinspsus-tainabilitythinsptrendsthinsphavethinspathinspconsiderablethinspimpactthinsponthinspourthinspbusinessthinspstrategythinspAndthinspthethinspmajorthinspissuethinspherethinspisthinspenergythinspWheth-erthinspwersquorethinsptalkingthinspaboutthinspgeneratingthinspsavingthinsporthinspstoringthinspenergythinspndashthinspWACKERthinsphasthinspathinsprolethinsptothinspplaythinspWethinspleadthinspthethinspindus-trythinspasthinspathinspcost-effectivethinsphigh-qualitythinspmanufacturerthinspofthinsppolycrystallinethinspsiliconthinspndashthinspthethinspkeythinsprawthinspmaterialthinspforthinspsolarthinspcellsthinspConsequentlythinspthethinspgrowththinspofthinspthisthinspal-ternativethinspenergythinspsourcethinspbenefitsthinspusthinspasthinspwellthinspOtherthinspexamplesthinspincludethinspprod-uctsthinspmadethinspfromthinsprenewablethinsprawthinspmate-rialsthinspsuchthinspasthinspbiopolymersthinspandthinspnaturalthinspfiberthinspcompositesthinspThethinsplistthinspofthinspexamplesthinspisthinspverythinspextensive

Productsthinsprepresentthinsponethinsphalfthinspofthinspathinspchemicalthinspcompanyrsquosthinspsustainabilitythinspeffortsthinspandthinspmanufacturingthinspprocess-esthinspanotherthinspWhatthinspsuccessesthinspdidthinspWACKERthinspachievethinsponthinspthethinspmanufactur-ingthinspsidethinspduringthinsp2009thinspandthinsp2010Auguste Willems IthinspwouldnrsquotthinspwantthinsptothinsplimitthinspmythinspresponsethinsptothinspjustthinspthethinsppastthinsptwothinspyearsthinspProductivitythinspisthinspathinspcentralthinspissuethinsp

atthinspWACKERthinspwhichthinspisthinspwhythinspwethinspcreatedthinspourthinspldquoWackerthinspOperatingthinspSystemrdquothinsppro-gramthinspathinspfewthinspyearsthinspagothinspItthinspaimsthinsptothinspgen-eratethinspgreaterthinspoutputthinspwiththinsplessthinspinputthinspWethinsparethinspconstantlythinsponthinspthethinsplookoutthinspforthinspwaysthinspofthinspmakingthinspmorethinspefficientthinspusethinspofthinsprawthinspmaterialsthinspandthinspreducingthinspourthinspenergythinspconsumptionthinspThisthinspisthinspwherethinspourthinspinte-gratedthinspproductionthinspsystemthinspgivesthinspusthinspathinsptremendousthinspadvantagethinspasthinspourthinspplantsthinspusethinspmaterialsthinspandthinspenergythinspwithinthinspclosedthinsploopsthinspInthinspotherthinspwordsthinspwethinsptakethinspthethinspby-productsthinspofthinsponethinspproductionthinspstepthinspandthinspusethinspthemthinspasthinspthethinspstartingthinspmaterialthinspforthinspotherthinspchemicalthinspprocessesthinspWethinspalsothinspdothinspthethinspsamethinspwiththinspwastethinspheatthinsptakingthinspitthinspfromthinsponethinspprocessthinspandthinspusingthinspitthinspforthinsplaterthinspproductionthinspstepsthinspThatthinspsavesthinspmoneythinspandthinspreducesthinspourthinspconsumptionthinspofthinspen-ergythinspandthinspresourcesthinspAnthinspintegratedthinspproductionthinspsystemthinspisthinspathinspnever-endingthinspprojectthinspndashthinspwersquorethinspalwaysthinspfindingthinspnewthinspwaysthinspofthinspmakingthinspitthinspeventhinspbetterthinspButthinspwethinspdonrsquotthinspwantthinsptothinspfocusthinspsolelythinsponthinspin-plantthinspproductionthinspndashthinspwethinspalsothinspneedthinsptothinsplookthinspbe-yondthinspthethinspfactorythinspgatesthinspTothinsptakethinspjustthinsponethinspexamplethinspwethinsphavethinspbeenthinspsupplyingthinspdriedthinspsilicathinspsludgethinsptothinspthethinspcementthinspin-

dustrythinspforthinspthethinsppastthinspyearthinspThethinspsludgethinspisthinspathinspwastethinspproductthinspforthinspusthinspbutthinspitthinspcon-tainsthinspathinspconsiderablethinspamountthinspofthinspsiliconthinspdioxidethinspwhichthinspisthinspathinspterrificthinspadditivethinspforthinspcement

DrthinspStaudiglthinspyouthinspwerethinspdissatisfiedthinspwiththinspthethinspnumberthinspofthinspworkplacethinspthinspaccidentsthinspWhatthinspisthinspWACKERthinspdoingthinsptothinsppermanentlythinspreducethinspthethinspthinspaccidentthinsprateDr Rudolf Staudigl OurthinspoverallthinspaccidentthinspfiguresthinspwerenrsquotthinspgoodthinspenoughthinspOverthinspthethinsppastthinspyearthinspwethinspcountedthinsp43thinspwork-placethinspaccidentsthinspperthinsponethinspmillionthinsphoursthinspworkedthinspAlthoughthinspthatthinspresultthinspisthinsplowerthinspthanthinspthethinspaveragethinspforthinspchemicalthinspcom-paniesthinspinthinspGermanythinspitthinspisthinsphigherthinspthanthinspthethinspfiguresthinspofthinspthethinspinternationalthinspmanu-facturersthinspwethinspbenchmarkthinspourselvesthinspagainstthinspMostthinspaccidentsthinsparethinspnotthinspchemicalthinspinthinspnaturethinspInsteadthinsptheythinsparethinspcausedthinspbythinspmomentsthinspofthinspinattentionthinspthatthinspresultthinspinthinsppeoplethinsptrippingthinspupthinspslip-pingthinsporthinspfallingthinspdownthinspLastthinspyearthinspwethinspworkedthinsptothinsppreventthinspaccidentsthinspbythinsplaunchingthinspourthinspWACKERthinspSafetythinspPlusthinspprogramthinspwhichthinspincorporatesthinspsafetythinspelementsthinspfromthinspsitesthinspwiththinspverythinsplowthinspthinspaccidentthinspratesthinspWethinspcanthinsplearnthinspquitethinspathinsplotthinspthisthinspwaythinspespeciallythinspfromthinspourthinspnon-Germanthinspsitesthinspwherethinspverythinspfewthinspacci-dentsthinspoccur

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WACKERthinspisthinspalsothinspinvolvedthinspinthinspchari-tablethinspactivitiesthinspWhatthinspprojectsthinspdidthinspyouthinspsupportthinspinthinsp2009thinspandthinsp2010Dr Rudolf Staudigl Beforethinsplookingthinspatthinspin-dividualthinspprojectsthinspIthinspwouldthinsplikethinsptothinsppointthinspoutthinspthatthinspathinspcompanythinspwiththinspathinspstrongthinspsensethinspofthinspsocialthinspresponsibilitythinspisthinspathinspsuccessfulthinsponethinspThatrsquosthinspbecausethinspitthinspcanthinsppaythinspgoodthinspsalariesthinspandthinspofferthinspstablethinspjobsthinspWethinspalsothinspknowthinsphoweverthinspthatthinspathinspcompanyrsquosthinspsocialthinspresponsibilitythinspdoesthinsp

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Feature

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CreatingthinspJobsthinspinthinspthethinspRegionRonnythinspWeichertthinspwiththinsphisthinspnewthinspfuturethinspprospectsthinspisthinsponlythinsponethinspexamplethinspofthinspWACKERrsquosthinspcollaborativethinspapproachthinsptothinsphowthinspitthinspinteractsthinspwiththinspthethinsplocalthinspcom-

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Feature True Neighbors

sothinspclearthinspandthinsppurethinspthatthinspathinspwholethinsphostthinspofthinspfishthinsparethinspattractedthinsptothinspit

DifficultthinspsituationsthinsparethinspresolvedthinspinthinspathinspwaythinspthatthinspeveryonethinspcanthinsplivethinspwiththinspForthinspexamplethinsptherethinspwerethinspfourthinspprivately-ownedthinsphousesthinsprightthinspnextthinsptothinspthethinspPoly 9thinspconstructionthinspsitethinspWethinsphadthinsplongthinsptalksthinspwiththinspthethinspownersthinspallthinspofthinspwhomthinspwantedthinsptothinspsellthinsptheirthinsppropertiesthinspWACKERthinspulti-matelythinspboughtthinspthethinsphousesthinspatthinspathinspfairthinsppricethinspthatthinspallowedthinspeveryonethinsptothinspmovethinspintothinspnewthinsphomesthinspinthinspthethinspvicinitythinspErikathinspHuumltterthinsp(80)thinspsaysthinspldquoThethinspfolksthinspatthinspWACKERthinspwerethinspreallythinspnicethinspeventhinspMrthinspKunkelthinsphim-selfthinsptalkedthinsptothinspusthinspatthinspgreatthinsplengthrdquothinspTodaythinspherthinspoldthinspgardenthinsphasthinsprunthinspwildthinspfrequentedthinspbythinspharesthinspandthinspErikathinspHuumltterthinspnothinsplongerthinsphasthinsptothinspclimbthinspstairsthinspbutthinsplivesthinspinthinspathinspnicethinspground-floorthinspapartmentthinspldquowiththinspathinsplargethinsplivingthinsproomthinspbedroomthinspandthinspnurseryrdquothinspA nurserythinspldquoIndeedrdquothinspshethinspsaysthinspldquoIthinspneedthinspitthinspforthinspthethinspfurniturethinspfromthinspmythinspoldthinsphouserdquothinspShethinspisthinspkeepingthinspthethinspfurniturethinspasthinspathinspre-minderthinspofthinspherthinsplatethinsphusbandthinspwhothinspdiedthinsptenthinspyearsthinspago

FuturethinspProspectsRonnythinspWeichertthinspisthinsplookingthinspforwardthinsptothinspthethinspfuturethinspldquoIrsquomthinspgladthinspthatthinspIthinspcanthinspnowthinspmakethinspsomethinspplansthinspagainthinspthatthinspIthinspamthinspnothinsplongerthinspdependentthinsponthinspgovernmentthinsphelprdquothinsphethinspsaysthinspHethinspisthinspcurrentlythinspworkingthinspatthinspthethinspwastethinspincineratorthinspandthinspifthinspitthinspwerethinspupthinsptothinsphimthinsphethinspwouldthinspalsothinspcontinuethinsptherethinsponcethinsphethinsphasthinspcompletedthinsphisthinsptrainingthinspthisthinspfall

Hethinsptakesthinsprealthinsppleasurethinspinthinsphisthinspworkthinspthinspaccompaniedthinspbythinspanthinspexperiencedthinspco-workerthinsphethinspmakesthinspthethinsproundsthinspofthinspallthinspfivethinspincineratorthinsplevelsthinspatthinspleastthinsptwicethinspdur-ingthinspeverythinspshiftthinspHisthinsptrainingthinspincludesthinsplearningthinsphowthinsptothinspcheckthinsppumpsthinspandthinsppipesthinspandthinsphowthinsptothinspreplacethinspsealsthinspMorethinspseriousthinsprepairsthinspsuchthinspasthinspreplacingthinspathinsp

measuringthinspinstrumentthinsparethinspthethinsprespon-sibilitythinspofthinspthethinspspecialistthinspengineersthinspOnthinsphisthinsproundsthinspWeichertthinspalwaysthinspwearsthinspthethinsprequisitethinspfireproofthinspandthinspacid-resis-tantthinspoverallsthinspsafetythinspgogglesthinspandthinspathinspprotectivethinsphelmetthinspHethinspcanrsquotthinspwaitthinspforthinspthethinspdaythinspwhenthinsphersquollthinspbethinspallowedthinsptothinspex-changethinsphisthinspwhitethinsptraineersquosthinsphardthinsphatthinspforthinspathinspyellowthinsponethinspndashthinspbecausethinspyellowthinspisthinspthethinspcolorthinspofthinspathinsppermanentthinspemployeersquosthinsphelmetthinspatthinspNuumlnchritz

NeighborthinspErikathinspHuumltterthinspinthinspconversationthinspwiththinspsitethinspmanagerthinspGerdthinspKunkel

Clearlythinspfocusedthinsponthinspfastthinspandthinspenvironmentallythinspsoundthinspfreightthinsptransportthinsp(fromthinspleft)thinspStefanthinspDartschthinspStefanthinspHrubeschthinspJosefthinspOberlech-nerthinspandthinspLudwigthinspHinterecker

On the Right Track

Feature

ModernthinsplocomotivesthinspshortthinsproutesthinspforthinspsuppliersthinspandthinspenvironmentallythinspfriendlythinsppackagingthinspndashthinspsustainabilitythinspisthinspasthinspvitalthinsptothinspWACKERrsquosthinsplogisticsthinspasthinspthethinsptrackthinspisthinsptothinspthethinsptrainthinspAthinspvisitthinsptothinspthethinspheartthinspofthinspBurg-hausenrsquosthinsplogisticsthinspcenter

EightthinspcomputerthinspscreensthinspflickerthinspinthinspthethinspcontainerthinspcontrolthinspcenterthinspStefanthinspthinspHrubeschthinspalwaysthinsphasthinspanthinspeyethinsponthinsponethinspofthinspthemthinsphethinspworksthinspherethinspasthinspheadthinspofthinspLoadingthinspControlthinspldquoThethinspredthinsppartsthinspthererdquothinsphethinspsaysthinsppointingthinsptothinsponethinspofthinspthethinspcom-puterthinspscreensthinspldquoarethinspthethinspcontainerthinsp

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Initiallythinspthethinsptrainsthinsparethinsploadedthinsponthinspcomputerthinspmonitorsthinspandthinspthenthinspinthinsprealthinsplife

560metersthinspisthinspthethinspmaximumthinsplengththinsppermittedthinspforthinsptrainsthinspheadedthinsptothinspthethinspNorththinspSeathinspports

Lookingthinspdeceptivelythinsplikethinspsomethinspsortthinspofthinspgamethinspthethinspsystemthinspcallsthinspforthinspintu-itionthinspandthinspabovethinspallthinspthethinspabilitythinsptothinspthinkthinsplogicallythinspAtthinsptheirthinspcomputerthinspscreensthinspHrubeschthinspandthinsphisthinspfourthinspco-workersthinspdirectthinspin-plantthinspcontainerthinsptransportthinspandthinspthethinsptrain-loadingthinsppro-cessthinspImportantlythinspeachthinsptrainthinspmustthinspbethinspnothinsplongerthinspthanthinsp560thinspmetersthinspandthinspthinspnothinspheavierthinspthanthinsp1399thinspmetricthinsptonsthinspotherwisethinspitthinspwouldthinspnotthinspmanagethinspthethinspsteepthinspsingle-trackthinspsectionthinspatthinspthinspPirachthinspDespitethinspthisthinsprestrictionthinspallthinspthethinspcontainersthinsphavethinsptothinspbethinsponthinspthethinsp

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PrecisionthinspWorkthinspUpthinspHighAthinspgantrythinspcranethinspimmediatelythinsploadsthinspnewthinspfullthinspcontainersthinspontothinspthethinspcarsthinspThethinspcranethinspoperatorthinspsittingthinspinthinspathinspcabthinspsomethinsp10thinspme-tersthinspabovethinspthethinspgroundthinspneedsthinspathinspreallythinspgoodthinspeyethinspforthinspsuchthinspprecisionthinspworkthinspThethinspcontainersthinspswingingthinspthroughthinspthethinspairthinspwillthinspgothinsponthinsptheirthinspjourneythinspnorththinspthethinspnextthinspdaythinspTwenty-fourthinspkilometersthinspfromthinspHamburgthinspatthinspthethinsptownthinspofthinspMaschenthinspthethinsptrainthinspdi-videsthinspThethinspcontainersthinspinthinsponethinspsectionthinsparethinspheadedthinspforthinspshipsthinspinthinspBremerhaventhinspwiththinspthethinsprestthinspdestinedthinspforthinspshipsthinspinthinspHamburg

2010thinspsawthinsp715000thinspmetricthinsptonsthinspofthinspprod-uctsthinspleavingthinspthethinspBurghausenthinspplantthinspndashthinspequivalentthinsptothinspthethinspweightthinspofthinsp71thinspEiffelthinspTowersthinspTrainsthinsptransportedthinsp230000thinsptonsthinspofthinspthethinsptotalthinspwiththinsp154000thinspcarriedthinspbythinspthethinspshuttlethinsptrainthinsp(whichthinspisthinspexclusivelythinspforthinspWACKERthinspproducts)thinspandthinsp76000thinspbythinspregu-larthinspfreightthinsptrains

ThethinspTrainthinspGetsthinspTopthinspPriorityldquoSustainabilitythinspplaysthinspanthinspimportantthinsprolethinspinthinspourthinsplogisticsthinspstrategyrdquothinspstressesthinspLudwigthinspHintereckerthinsp(headthinspofthinspLogisticthinsp

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Precisionthinspworkthinspdownthinsptothinspthethinsplastthinspcentimeterthinspthethinspcranethinspoperatorthinspliftsthinspathinspcontainer

715000metricthinsptonsthinspofthinspproductsthinspwerethinspshippedthinsparoundthinspthethinspworldthinspbythinspWACKERrsquosthinspBurghausenthinspplantthinspinthinsp2010

hausenthinspwasthinspequippedthinspwiththinspanthinspelec-tronicthinspsignalingthinspsystemthinsp(replacingthinspob-soletethinsprelaythinsptechnology)

AvoidingthinspEmptythinspShipmentsTurningthinspfromthinsptrainsthinsptothinsptrucksthinspLudwigthinspHintereckerthinspexplainsthinspthethinspconceptthinspofthinspregionalthinspfreightthinspcarriersthinspldquoEachthinspship-perthinspservesthinspathinspspecificthinspregionthinspwhichthinspisthinsporganizedthinspbythinspzipthinspcodethinspinthinspGermanythinspandthinspbythinspcountrythinspinthinspEuroperdquothinspThisthinspsys-temthinspavoidsthinspemptythinsptrucksthinspandthinspthere-forethinsplowersthinsptheirthinspmileagethinspandthinspfuelthinspconsumptionthinspHoweverthinspitthinsprequiresthinspmultiplethinspproductsthinsptothinspbethinsploadedthinspatthinspathinspsinglethinsplocationthinspOnethinspsuchthinsplocationthinspisthinspBurghausenrsquosthinspLogisticsthinspandthinspDistribu-tionthinspCenterthinspHerethinsp60thinspemployeesthinspstorethinsplabelthinspandthinsploadthinsparoundthinsp30000thinsppalletsthinspperthinspmonththinspndashthinspseventhinspdaysthinspathinspweekthinspBe-tweenthinsp6thinspathinspmthinspandthinsp10thinsppthinspmthinspthethinspforkliftsthinsploadthinsponethinsppalletthinspafterthinspthethinspotherthinspintothinsp

roadthinspcontainersthinspAtthinspnightthinspitrsquosthinspthenthinspthethinspturnthinspofthinspthethinsprailthinspcontainersthinspTothinspminimizethinspthethinspfirethinspriskthinspthethinspambientthinspoxygenthinspinthinspthethinspfully-automatedthinsphigh-baythinspwarehousethinspisthinsploweredthinsptothinsp13thinsppercentthinsp(aboutthinsp7thinspper-centthinsplessthinspthanthinspnormal)thinspndashthinspequivalentthinsptothinspthethinspoxygenthinspavailablethinsptothinsphikersthinspatthinspanthinspaltitudethinspofthinsp3500thinsptothinsp4000thinspmetersthinspThisthinspareathinspofthinspthethinspLogisticsthinspandthinspDistributionthinspCenterthinspisthinspsubjectthinsptothinspstrictthinspsafetythinspregu-lationsthinspandthinspcanthinsponlythinspbethinspenteredthinspforthinspcheckingthinsppurposes

WhatthinspisthinspparticularlythinspstrikingthinspaboutthinspthethinspwholethinspLogisticsthinspsetupthinspisthinspitsthinspefficiencythinspEveryonethinspdownthinsptothinspthethinspswitchmanthinsponthinspthethinsptracksthinspknowsthinspexactlythinspwhatthinsptheythinsphavethinsptothinspdothinspandthinspwhenthinspThethinspforkliftthinspdriv-ersthinspglancethinspbrieflythinspatthinspathinspnavigationthinspde-vicethinspandthinspimmediatelythinspheadthinspoffthinspwiththinsptheirthinsppalletsthinsptothinspthethinspcorrectthinsplanethinspAfterthinsponethinsptothinsptwothinsphoursthinspthethinspcontainerthinspisthinspfullthinsp

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LetrsquosthinspreturnthinsptothinspthethinsptrainthinspstationthinspItthinspisthinspnowthinspaboutthinsp11 amthinspThethinspwhitethinsplocomo-tivethinspchangesthinsptracksthinspandthinspconnectsthinsptothinsp

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BrakingthinspQuietlyNormallythinspfreightthinsptrainsthinspmakethinspathinsploudthinspscreechthinspwhenthinsptheythinspbrakethinspButthinspnotthinspthisthinspcontainerthinsptrainthinspStefanthinspDartschthinspisthinspvis-iblythinspproudthinspldquoThisthinsponethinsphasthinspspecialthinspbrakethinspblocksrdquothinspMorethinspandthinspmorethinspWACKERthinsp

carsthinsp(includingthinsp30thinspnewthinsprailthinsptankersthinsprentedthinspfromthinspthethinspnationalthinsprailroadthinspop-erator)thinsphavethinspcompositethinspbrakethinspblocksthinsp(ldquoK-blocksrdquo)thinspwhichthinspfunctionthinspmuchthinspmorethinspquietlythinspwhateverthinspthethinspspeedthinspWACKERthinspstronglythinsppromotedthinspthethinspadop-tionthinspofthinspldquoK-blocksrdquothinspinthinspitsthinspdiscussionsthinspwiththinspthethinsprailthinspoperatorthinspsincethinsptheirthinspadoptionthinsprepresentsthinspanotherthinspsmallthinsppiecethinspinthinspthethinsplargethinsppicturethinspofthinspsustain-abilitythinspinthinsplogistics

AthinspWACKERthinspfreightthinsptrainthinspheadsthinspoffthinsptothinspthethinspNorththinspSeathinspportsthinspeverythinspdaythinspatthinsp1221thinsppm

Milestones 2008 ndash 2010

Milestones

Junethinsp19thinsp2008

300thinspmmthinspWaferthinspProductionSiltronicthinspandthinspSamsungthinspjointlythinspstartthinsptothinspproducethinsp300thinspmmthinspwafersthinspinthinspSingaporethinspThethinspnewthinspcomplexthinspisthinspamongthinspthethinspworldrsquosthinsplargestthinspandthinspmostthinspmodernthinsp300thinspmmthinspwaferthinspfacili-tiesthinspBythinsp2012thinspthethinspjointthinspventurethinspaimsthinsptothinspreachthinspathinspmonthlythinspcapacitythinspofthinsp300000thinspwafersthinspThethinspoverallthinspinvestmentthinspinthinspthisthinspprojectthinspisthinspaboutthinspUS$1thinspbillion

Februarythinsp1thinsp2008

GlobalthinspMarketthinspLeaderthinspWACKERthinspfinalizesthinspthethinspacquisitionthinspofthinspitsthinsppolymerthinspjointthinspventuresthinspAsthinspthethinspworldrsquosthinspleadingthinspsupplierthinspofthinspdispersiblethinsppolymerthinsppowdersthinspforthinspconstructionthinspapplicationsthinspWACKERthinspexpectsthinspthethinsptrans-actionthinsptothinspbenefitthinspitsthinspglobalthinspthinsppolymersthinspbusinessthinsponthinspseveralthinspthinspstrategicthinspfronts

Julythinsp3thinsp2008

WACKERthinspChairthinspWACKERthinspandthinspthethinspTUMthinspopenthinspthethinspInstitutethinspofthinspSiliconthinspChemistrythinsppartthinspofthinspthethinspWACKERthinspChairthinspofthinspMacromolecularthinspChemistrythinspatthinspthethinspresearchthinspcenterthinspinthinspGarchingthinsp(thinspnearthinspMunichthinsp)thinspThethinsplabthinspoffersthinspidealthinspworkingthinspconditionsthinspforthinspin-terdisciplinarythinspresearchthinspintothinspmacromolecularthinsporganosiliconthinspcompoundsthinsp

Novemberthinsp14thinsp2008

Raw-MaterialsthinspthinspProductionWACKERthinspandthinspDowthinspCorningthinspstartthinsprawthinspmaterialthinspproductionthinspatthinspthethinsplargestthinspintegratedthinspsiliconethinspsitethinspinthinspChinathinspBoththinspcompaniesthinsparethinspjointlythinspinvestingthinspsomethinspUS$12thinspbillionthinspinthinspexpandingthinsppyrogenic-silicathinspandthinspsiloxanethinspproductionthinspNotthinsponlythinspisthinspitthinspChinarsquosthinspbiggestthinspfacilitythinspofthinspthisthinspkindthinspbutthinspitthinspisthinspalsothinsponethinspofthinspthethinspworldrsquosthinsplargestthinspandthinspmostthinspthinspadvancedthinspintegratedthinspsili-conethinspproductionthinspsites

Octoberthinsp11thinsp2008

TrainingthinspampthinspCompetencethinspCenterWACKERthinspopensthinspathinsptrainingthinspandthinspcompetencethinspcenterthinspforthinspconstruc-tionthinspchemicalsthinspinthinspMoscowthinspThisthinspinternationalthinspfacilitythinspoffersthinspthethinspidealthinspplatformthinspforthinspsector-specificthinspnetworkingthinspbetweenthinspcustomersthinspsalesthinsppartnersthinspandthinspWACKERthinspex-pertsthinspThethinspGroupthinspisthinspalsothinspexpand-ingthinspitsthinspMoscowthinsptechnicalthinspcenterthinspwhichthinsppromotesthinspthethinsptransferthinspofthinspexpertisethinsptothinsplocalthinspcustomersthinspandthinspbusinessthinsppartners

Maythinsp26thinsp2009

CyclodextrinthinspProductionWACKERthinspstartsthinspupthinspitsthinspexpandedthinspcyclodextrinthinspplantthinspinthinspEddyvillethinsp(thinspIowathinspUSAthinsp)thinspstrengtheningthinspitsthinspmarketthinsppositionthinspforthinspalphathinspbetathinspandthinspgammathinspcyclodextrinsthinsp(thinspbio-engineeredthinspsugarthinspmoleculesthinsp)

Augustthinsp4thinsp2009

DevelopmentthinspandthinspthinspTestingthinspLabThethinspDubaithinsptechnicalthinspcenterthinspforthinspMiddlethinspEastthinspcustomersthinspisthinspex-pandedthinspServingthinspasthinspathinspdevelop-mentthinspandthinsptestingthinsplaboratorythinspforthinspapplicationsthinspinvolvingthinspconthinspstruc-tionthinspchemicalsthinspthethinspcenterthinsphelpsthinspWACKERthinsptapthinspintothinspthethinspregionrsquosthinspfast-growingthinspconstructionthinspindustry

DispersiblethinspPolymerthinspPowderthinspProductionthinspPlantWACKERthinspstartsthinspupthinspitsthinspnewthinsppro-ductionthinspplantthinspforthinspdispersiblethinsppolythinspmerthinsppowdersthinspandthinspdisper-sionsthinspinthinspNanjingthinsp(thinspChinathinsp)thinspThethinspplantthinspsecuresthinspconsistentlythinsphighthinsplong-termthinspdeliverythinspreliabilitythinspandthinspproductthinspqualitythinspforthinspcustom-ersthinspinthinspthethinspAsia-PacificthinspregionthinspWiththinspathinsppolymer-powderthinspcapacitythinspofthinsp30000thinspmetricthinsptonsthinspperthinspyearthinspitthinspisthinspthethinsplargestthinspplantthinspofthinspitsthinspkindthinspinthinspChina

WACKERthinspSiliconethinspAwardThethinspWACKERthinspSiliconethinspAwardthinspgoesthinsptothinspProfthinspUlrichthinspSchubertthinspofthinspthethinspViennathinspUniversitythinspofthinspTech-nologythinspndashthinspinthinsprecognitionthinspofthinsphisthinspground-breakingthinspworkthinsponthinspmetal-siliconthinspcomplexesthinspandthinsphisthinspmate-rial-sciencesthinspstudiesthinsponthinspforthinspthinspexamplethinspthethinspsol-gelthinspprocess

NewthinspTechnicalthinspCenterthinspWACKERthinspopensthinspathinspnewthinsptechnicalthinspcenterthinspforthinsppolymerthinspapplicationsthinspinthinspAllentownthinsp(thinspPennsylvaniathinspUSAthinsp)thinspThethinspfocusthinspisthinsponthinspproductsthinspforthinspcustomersthinspinthinspconstructionthinspadhesivesthinsptechnicalthinsptextilesthinspandthinsparchitecturalthinspcoatings

Milestones

Aprilthinsp21thinsp2010

PolysiliconthinspFacilitiesthinspthinspGothinsponthinspStreamBurghausenthinspseesthinspadditionalthinsppolycrystalline-siliconthinspfacilitiesthinspcomethinsponthinspstreamthinspOverallthinspWACKERthinsphasthinspinvestedthinspaboutthinspeuro500thinspmillionthinspinthinspthisthinspexpansionthinspstagethinspwhichthinspcreatesthinspsomethinsp200thinspnewthinspjobsthinspThethinspnewthinspfacilitiesthinspmanufacturethinspmate-rialthinspforthinspboththinspthethinspsolarthinspsectorthinspandthinspthethinspsemiconductorthinspmarket

NewthinspTrainingthinspCentersThethinspWACKERthinspACADEMYthinspgrowsthinspwiththinspnewthinsptrainingthinspcentersthinspopen-ingthinspinthinspSatildeothinspPaulothinsp(thinspBrazilthinsp)thinspandthinspSingaporethinspSuchthinspcentersthinspofferthinspanthinspidealthinspplatformthinspforthinspexchangingthinspexpertisethinspwiththinsplocalthinspcustomersthinspandthinsppartnersthinsp

AcquisitionthinspofthinspSilicon-MetalthinspPlantWACKERthinspacquiresthinspathinspsilicon-metalthinspplantthinspinthinspHollathinspfromthinspNorwayrsquosthinspFESILthinspGroupthinspThisthinspstrategicthinspac-quisitionthinspmeansthinspWACKERthinspcanthinspcoverthinspitsthinsplong-termthinspsilicon-metalthinspneedsthinspThethinspHollathinspplantthinspmakesthinspWACKERthinspmorethinspindependentthinspofthinspraw-materialthinsppricethinspfluctuationsthinspandthinspincreasesthinspsupplythinspsecurity

Decemberthinsp9thinsp2010

NewthinspPolysiliconthinspthinspProductionthinspSitethinspinthinspUSAWACKERthinspisthinspgoingthinsptothinspconstructthinspathinspnewthinspfullythinspintegratedthinsppolythinspsiliconthinspsitethinspwiththinspanthinspannualthinspthinspcapacitythinspofthinsp15000thinspmetricthinsptonsthinspinthinspthethinspUSthinspStatethinspofthinspTennesseethinspCostingthinspaboutthinspeuro11thinspbillionthinspthethinspprojectthinspisthinspex-pectedthinsptothinspcreatethinsp650thinspnewthinspjobsthinspItthinspisthinspscheduledthinspforthinspcompletionthinspthinspinthinsplatethinsp2013

ChinarsquosthinspLargestthinspSiliconethinspSitethinspOpenedAtthinspZhangjiagangthinspWACKERthinspandthinspDowthinspCorningthinspopenthinspChinarsquosthinsplarg-estthinspintegratedthinspsiliconethinspsitethinspFromthinspthisthinsplocationthinspboththinspcompa-niesthinspcanthinspnowthinspmeetthinspthethinspsoaringthinspdemandthinspforthinspsiliconesthinspinthinspChinathinspandthinspAsiathinspasthinspathinspwholethinspThethinspjointthinspinvestmentsthinspforthinspthisthinspprojectthinsptotalthinspUS$18thinspbillion

About WACKER

HuaweithinspShaoTranslatorthinspLanguagethinspServicesthinspthinspMunichthinspHeadquarters

ldquoI want to promote communication with our Chinese customers and WACKERrsquos Chinese colleaguesrdquo

Germany

WACKER Sales and Production Sites 1

1 Only majorityshyowned subsidiaries

1thinspUSAAdrian MichiganAllentown PennsylvaniaCalvert City KentuckyChino CaliforniaEddyville IowaNorth Canton OhioPortland Oregon

2thinspMexicoMexico City

3thinspBrazilJandira Satildeo Paulo

4thinspUnitedthinspArabEmiratesDubai

5thinspIndiaBangaloreKolkata West BengalMumbaiNew DelhiChennai

6thinspBangladeshDhaka

7thinspChinaBeijingChengdu

GuangzhouHong KongNanjingShanghaiShundeWuxiZhangjiagang

8thinspThailandBangkok

9thinspVietnamHo Chi Minh City

10thinspSingaporeSingapore

11thinspIndonesiaJakarta

12thinspTaiwanHsinchuTaipei

13thinspSouththinspKoreaJincheonSeoulUlsan

14thinspJapanAkenoHikariOsakaTokyo

15thinspAustraliaMelbourne Victoria

16thinspGreatthinspBritainChertsey

17thinspSpainBarcelona

18thinspFranceLyon

19thinspNetherlandsKrommenie

20thinspItalyMilan

21thinspCzechthinspRepublicPlzeňPrague

22thinspNorwayKyrksaeligteroslashra Holla

23thinspSwedenSolna

24thinspPolandWarsaw

25thinspHungaryBudapest

26thinspUkraineKiev

27thinspGreeceAthens

28thinspTurkeyIstanbul

29thinspRussiaMoscow

30thinspGermanyAthinsp BurghausenB CologneC Freiberg SaxonyD JenaE KemptenF MunichG NuumlnchritzH StettenI Stuttgart

Europe

Wacker Chemie AG Sustainability Report 2009 2010 21

About WACKER

Group Structure and Operations

WACKER is a globally active company with stateshyofshytheshyart specialty chemical products Our portfolio includes over 3500 products supplied to more than 3500 customers in over 100 countries WACKER products are used in countless everyday items ranging from cosshymetic powders to solar cells

SiliconthinspIsthinspOurthinspMainthinspStartingthinspMaterialMost of our products are based on inorganic starting materials Siliconshybased products account for 80 percent of WACKER sales and products that are primarily ethyleneshyrelated for 20 percent We supply products to virtually every major sector ranging from consumer goods food pharmaceuticals and textiles through to the solar electrical electronic and basicshychemshyical industries and to medical technology biotech and mechanical engineering As a manushyfacturer of silicones and polymers WACKER is particularly well represented in the automotive and construction sectors We are also a key supplier of silicon wafers to the semiconductor industry Over the last four years we have greatly expanded our polycrystallineshysilicon busishyness for the solar industry where WACKER is one of the worldrsquos largest manufacturers

InternationalthinspPresencethinspEnhancedIn 2010 we strengthened our presence primarily in growth regions Now WACKER has 50 sales offices in 29 countries worldwide Over recent years the Group has set up a network of techshynical competence centers to enable customers to learn about its product portfolio and to run product tests there In total 20 such centers ensure optimum customer support With our WACKER ACADEMY facilities we also offer customers topicshyspecific seminars and training sessions on our products and their fields of application In 2010 we opened three WACKER ACADEMY branches (our fifth sixth and seventh) in Dubai Satildeo Paulo and Singapore respecshytively We also opened a new sales office in Chengdu China

BurghausenthinspIsthinspOurthinspKeythinspProductionthinspSiteWACKERrsquos global production network consists of 26 production sites ndash 9 are in Europe 7 in the Americas and 10 in Asia The Grouprsquos key production site is Burghausen (Germany) with about 9700 employees In 2010 Burghausenrsquos manufacturing output reached around 500000 metric tons That is about 50 percent of groupwide production volumes We are strongly expanding our Nuumlnchritz site (Saxony) where our first polysilicon plant outside Burghausen will come on stream in 2011 with a nominal production capacity of 10000 metric tons per year

About WACKER

Legal Structure

In November 2005 WACKER became a stock corporation (AG) under German law Headquarshytered in Munich Wacker Chemie AG holds a direct or indirect stake in 56 companies belongshying to the WACKER Group Our financial statements include 50 companies that have been fully consolidated and 5 accounted for using the equity method One small company that is not part of our core operations has not been consolidated

FivethinspOperatingthinspDivisionsWACKER is based on a matrix organization with clearly defined functions The Group has five business divisions which have global responsibility for their own products manufacturing facilities markets customers and results Regional organizations are responsible for all busishyness activities in their areas WACKERrsquos corporate departments primarily provide services for the whole Group although some also have productionshyrelated functions

thinspWACKERthinspGroup

Corporate Departments

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

Management and Supervision

In compliance with the German Stock Corporation Act (AktG) Wacker Chemie AG has a dual management system comprising the Executive Board and Supervisory Board The Executive Board has four members Wacker Chemie AG is the parent company and as such determines the Grouprsquos strategy overall management resource allocation funding and communications with key target groups (especially with the capital market and shareholders)

In 2010 the Executive Boardrsquos composition remained unchanged There were however changes to membersrsquo responsibilities Effective October 1 2010 Dr Rudolf Staudigl (presishydent and CEO) who had previously headed WACKER SILICONES instead assumed responshysibility for Siltronic and ceded RampD and Intellectual Property to Dr Wilhelm Sittenthaler Dr Sittenthaler who had been in charge of Siltronic assumed responsibility for WACKER SILICONES The other Executive Board membersrsquo responsibilities remained the same

There were no changes to Wacker Chemie AGrsquos Supervisory Board in 2010

DeclarationthinsponthinspCorporatethinspManagementSubmitted as per Section 289a of the German Commercial Code (HGB) the declaration on corporate management forms part of the corporate governance report This declaration is part of the combined management report and is also available online

WACKERrsquosthinspStructure

wwwwackercom

Key Products Services and Business Processes

Our divisionsrsquo overall range of products and services remained unchanged In several fields of application we expanded our product portfolio during 2010

Our WACKER SILICONES division provides customers with our broadest offering of over 3000 products ndash ranging from siliconeshybased fluids emulsions resins elastomers and sealants to silanes and pyrogenic silica The division manufactures both specialty products tailored to customersrsquo specific needs and standard products primarily used as starting materials in the production of silicones

WACKER POLYMERS manufactures stateshyofshytheshyart binders and polymeric additives (such as dispersible polymer powders and dispersions) These are used in diverse industrial applicashytions or as base chemicals Application areas include the automotive paper and adhesive sectors The main customer for polymeric binders is the construction industry which uses them as additives in tile adhesives exterior insulation and finish systems (EIFS) dryshymix mortars and selfshyleveling flooring compounds

WACKER BIOSOLUTIONS our smallest division supplies customized biotech and catalog products for fine chemicals Products include pharmaceutical proteins cyclodextrins cysteine polyvinyl acetate solid resins (for chewing gum base) organic intermediates and acetylacetone The division focuses on customershyspecific solutions for growth areas such as pharmaceutical actives cosmetics and food additives

WACKER POLYSILICON produces hyperpure polysilicon for the semiconductor electronic and ndash above all ndash solar sectors Most of this polysilicon is sent to external customers Internally we supply both Siltronic and its Siltronic Samsung Wafer joint venture

Siltronic supplies leading semiconductor manufacturers with silicon wafers These wafers form the fundamental basis for virtually all semiconductor products ndash whether for discrete semiconductor components (e g transistors and rectifiers) or microchips (e g microproshycessors and memory chips)

17thinsp WACKER POLyMERS

25thinsp WACKER POLySILICON

3thinsp WACKER BIOSOLUTIONS

22 SILTRONIC

33thinsp WACKER SILICONES

DivisionalthinspSharesthinspinthinspExternalthinspSales

OurthinspWACKERthinspSILICONESthinspDivisionthinspProvidesthinspCus-tomersthinspwiththinspOurthinspBroad-estthinspOfferingthinspofthinspOverthinspthinsp3000thinspProducts

About WACKER

Germany thinsp

Other European countries thinsp

The Americas thinsp

Asia thinsp

Other regions thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

ExternalthinspSalesthinspbythinspCustomerthinspLocation

Corporate Governance

Corporate governance is an important part of a companyrsquos success responsible corporate management and supervision Wacker Chemie AG attaches great importance to the rules of proper corporate governance In this report the Executive Board provides details ndash also for the Supervisory Board ndash on corporate management in accordance with Item 310 of the Gershyman Corporate Governance Code (Code) and Section 289a (1) of the German Commercial Code (HGB)

DeclarationthinspofthinspConformitythinspandthinspCorporatethinspGovernancethinspReportingThe Executive and Supervisory Boards dealt intensively with the companyrsquos corporate govshyernance and the alterations to the Code in the 2010 fiscal year The Executive Board and the Supervisory Board have resolved to issue the following annual Declaration of Conformity as per Section 161 of the German Stock Corporation Act (AktG) The Declaration of Conformity was made permanently available to the general public on the companyrsquos website

Thethinsp2010thinspDeclarationthinspofthinspConformitythinspIssuedthinspbythinspWackerthinspChemiethinspAGrsquosthinspExecutivethinspandthinspSupervisorythinspBoardsGeneralthinspDeclarationthinspPursuantthinsptothinspSectionthinsp161thinspofthinspthethinspGermanthinspStockthinspCorporationthinspActIn December 2009 the Executive Board and the Supervisory Board of Wacker Chemie AG issued their last declaration of conformity pursuant to Section 161 of the German Stock Corposhyration Act Since that time Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code in the version dated June 18 2009 with the followshying exceptions and will with a few exceptions comply with the recommendations of the Code in the version dated May 26 2010

Shareholder Structure

Wacker Chemie AGrsquos largest shareholder is still Dr Alexander Wacker Familiengesellschaft mbH It holds over 50 percent of the voting shares in Wacker Chemie AG (2009 over 50 percent)

In 2010 Blue Elephant Holding GmbH (Poumlcking Germany) once again did not have any votingshyshare changes to report which means it still holds over 10 percent (2009 over 10 percent) of Wacker Chemie AG

Exceptionswwwwackercom corporate-governance

Sustainability Management

DrthinspFrankthinspBoumlckelmannGroupthinspCompliancethinspOfficerthinspthinspMunichthinspHeadquarters

ldquoFor me itrsquos important for the principles underlying our Code of Conduct to reach every single WACKER employeerdquo

Goals and Outlook

NewthinspSustainabilitythinspDepartmentAt the start of 2011 we redoubled our efforts relating to sustainability putting them on an international footing WACKERrsquos new Corporate Sustainability departshyment manages the voluntary commitments arising from our membership of Responsible Carereg and Global Compact and drives sustainability activities throughout the Group

SustainabilitythinspReportingWe are working on standardizing our various IT systems for groupwide sustainability reporting

ManagementthinspSystemsWe aim to have obtained Group certification for our sites in Holla Norway and Jincheon South Korea along with our sales locations by 2012 The Jena site will be integrated into the Group certificate in 2011 To certify all sites to the OHSAS standard for occupational health and safety we will determine the differshyent requirements at the various sites in 2011 We are seeking to achieve groupshywide OHSAS certification by 2015

Goalsthinsp2007thinspthinsp2008

CertifythinspthethinspGroupthinsptothinspISOthinsp9001thinsp(thinspqualitythinsp)thinspandthinspISOthinsp14001thinsp(thinspenvironmentthinsp)thinspGroupthinspcertificationthinsp1

Corporate entity GroupwideDeadline 2011Implementation status Goal was realized to a large extent By late 2010 the Burghausen Munich Nuumlnchritz Kempten and Cologne sites in Germany along with all WACKER US sites and all WACKER Greater China sites were included in the Group certificate Also included were Plzeň (thinspCzech Republicthinsp) Ulsan (thinspSouth Koreathinsp) and the technical competence centers in Dubai Moscow and Shanghai

CertifythinspallthinspWACKERthinspsitesthinsptothinspthethinspinternationallythinsprecognizedthinspOHSASthinspoccupationalthinsphealththinspandthinspsafetythinspmanagementthinspsystemCorporate entity GroupwideDeadline 2011Implementation status Preparations for OHSAS certification commenced in the period under reshyview We compiled a checklist to help the sites assess their degree of compliance with OHSAS and where there are gaps to be filled The goal is being reshyset

EmployeethinspSuggestionthinspProgramthinsp(thinspBVWthinsp)thinspReachthinspathinsptotalthinspbenefitthinspfromthinspsuggestionsthinspofthinspatthinspleastthinspeuro10thinspmillionthinspperthinspyearCorporate entity GermanyDeadline From 2009 to 2011Implementation status Goal was reached in the period under review In 2009 suggestions for imshyprovement yielded a total benefit of euro124 million compared with euro119 million in 2010

EmployeethinspSuggestionthinspProgramthinsp(thinspBVWthinsp)thinspIncreasethinspthethinspparticipationthinspratethinsp(thinspnumberthinspofthinspsubmittersthinspperthinsp100thinspemployeesthinsp)thinspfromthinsp28thinsptothinsp50thinsppercentthinsp(thinspreferencedthinsptothinsp2008thinsp)Corporate entity GermanyDeadline By 2011Implementation status The participation rate in 2009 stagnated at 28 percent In 2010 it rose to 33 percent

CertifythinspthethinspGroupthinsptothinspISOthinsp9001thinsp( quality )thinspandthinspISOthinsp14001thinsp( environment )thinspGroupthinspcertificationthinsp1

Corporate entity GroupwideDeadline 2011

CertifythinspallthinspWACKERthinspsitesthinsptothinspthethinspinternationallythinsprecognizedthinspOHSASthinspoccupationalthinsphealththinspandthinspsafetythinspmanagementthinspsystemCorporate entity GroupwideDeadline 2015

EmployeethinspSuggestionthinspProgramthinsp( BVW )thinspreachthinspathinsptotalthinspbenefitthinspfromthinspsuggestionsthinspofthinspatthinspleastthinspeuro10thinspmillionthinspperthinspyearCorporate entity GermanyDeadline From 2009 to 2011

EmployeethinspSuggestionthinspProgramthinsp( BVW )thinspincreasethinspthethinspparticipationthinspratethinsp( numberthinspofthinspsubmit-tersthinspperthinsp100thinspemployees )thinspfromthinsp28thinsptothinsp50thinsppercentthinsp( referencedthinsptothinsp2008 )Corporate entity GermanyDeadline By 2011

1 Includes all business divisions ( key production sites ) and corporate departments

NewthinspGoals

Outlookthinsp

Corporate Policies

WACKER is a globally active company that manufactures and sells chemical products and engages in scientific research A leader in our core businesses (semiconductors polysilicon polymers fine chemicals and silicones) we forge ahead with innovative chemistry and new technologies supplying solutions that are marketshyoriented energyshysaving and environmenshytally compatible

Our strengths lie in our leadingshyedge technologies and products and above all in our emshyployees Their health and wellshybeing fuel their commitment and performance Well trained highly motivated and sensitized to our business environment they act in a resultsshyoriented and responsible manner By doing so they play a crucial role in achieving our objectives and securing the entire companyrsquos continued success

We use our Integrated Management System (IMS) for quality health safety and the environshyment to continuously improve our performance and activities At WACKER product and service quality has a very high priority Our strong focus on enhancing quality and customer satisfaction is essential for our success

Health safety and environmental protection are of paramount importance We are fully comshymitted to sustainable development a principle that is an integral part of our business thinking and practices We attach equal weight to economic environmental and social concerns

Business Principles

WACKER plays an active role in the worldwide Responsible Carereg initiative and strictly adheres as a matter of course to legal regulations and its own supplementary policy rules These commitments form the basis of our business principles

Each employee assumes responsibility for quality health safety and environmental protecshytion as well as for ongoing improvements in these areas To this end we regularly set targets and ensure they are met

Worldwide we supply highshyquality products that can be distributed used and disposed of safely and in an environmentally compatible way

We continually expand our knowledge about our existing and newly developed products We also adjust our health safety and environmental measures to incorporate any new insights

We ensure the safe handling of products and residues in our manufacturing processes We minimize resource consumption emissions and waste

Generally speaking employees are themselves responsible for their own health To help them we introduce measures and programs that promote maintain and restore health

We work to persuade our business associates to adopt our standards for quality health safety and environmental protection We insist that all subcontractors working at our locations adhere to our regulations

Safety is a top priority at every site We systematically enhance plant and workplace safety as well as health protection We take preventive action and maintain effective emergency response systems to counter potential risks

We create and promote a climate of mutual trust through ongoing open dialog with our employees customers and suppliers as well as with our neighbors the authorities and the general public

We observe legal regulations The applicable procedures and the way we define and imshyplement our own supplementary standards are described in our Integrated Management System for quality health safety and environmental protection This system is based on internationally valid standards and takes customer needs fully into account

Basic and advanced training sensitizes our employees to the importance of observing and empowers them to successfully implement our business principles

Our voluntary commitments and business principles are an expression of what we value They complement our corporate vision which is to

Be a preferred partner to our customers Create a pleasant working environment for our employees and Meet our responsibilities to society

Voluntary Commitments

ResponsiblethinspCarereg

The Responsible Carereg initiative was launched by the Canadian Chemical Producersrsquo Assoshyciation in 1985 Members of Responsible Carereg aim to secure continuous improvements to health safety and environmental performance on a voluntary basis ndash irrespective of legal requirements As time passed more and more chemical companies and associations from around the world joined the initiative Launched in Germany in 1991 it now has some 800 active member companies These represent some 90 percent of the chemical workforce in Germany WACKER committed to it right from the start

We attach equal importance to economic and social goals This explains our strong focus on environmental protection plant process safety (for both employees and neighbors) occupashytional health and safety and product safety (for customers and end users)

Responsible Carereg

wwwresponsible-careorg wwwicca-chemorgenHomeResponsible-care

The ICCA (International Council of Chemical Associations) launched its new Responsible Carereg Global Charter in 2006 at the UNshyled International Conference on Chemicals Manageshyment in Dubai WACKER was one of the first companies in Germany to sign this revised volshyuntary commitment The charter expands upon the Responsible Carereg principles that were first formulated in the midshy1980s It takes account of the new challenges facing both the chemical sector and the global community ndash e g growing public dialog over sustainable economic development public health issues related to the use of chemicals and the need for greater industry transparency

Since 2008 our WACKER Greater China region has been an active member of Chinarsquos Responshysible Carereg program

GlobalthinspCompactFormer UN SecretaryshyGeneral Kofi Annan came up with the idea of a Global Compact between industry institutions and civil society The underlying aim is to overcome the challenges of globalization together Participants commit to promoting human rights labor standards environmental protection and antishycorruption measures Since its launch in 2000 the Global Compact has become the worldrsquos largest initiative for sustainable development ndash with over 8700 corporate participants and stakeholders from over 130 countries

WACKER joined Global Compact in 2006 Member companies commit to implementing the Global Compactrsquos ten principles which are derived from the Universal Declaration of Human Rights the International Labour Organizationrsquos Declaration on Fundamental Principles and Rights at Work and the Rio Declaration on Environment and Development

HumanthinspRights Principle 1 Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence and

Principle 2 make sure that they are not complicit in human rights abuses

LaborthinspStandards Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining

Principle 4 the elimination of all forms of forced and compulsory labor Principle 5 the effective abolition of child labor and Principle 6 the elimination of discrimination in respect of employment and occupation

EnvironmentalthinspProtection Principle 7 Businesses should support a precautionary approach to environmental challenges

Principle 8 undertake initiatives to promote environmental responsibility and

Global Compactwwwunglobalcompactorg

Progress Report Wacker Chemie AG 2011

TwothinsphandsthinspholdingthinspanthinspimaginarythinspchemicalthinspbondthinspThisthinspisthinspthethinsplogothinspofthinspthethinspchemicalthinspindustryrsquosthinspinter-nationalthinspResponsiblethinspCareregthinspinitiative

Principle 9 encourage the development and diffusion of environmentally friendly techshynologies

Anti-Corruption Principle 10 Businesses should work against corruption in all its forms including extortion and bribery

All our employees are required to observe our Code of Conduct which obligates them to observe social and ethical standards to obey the law and to act responsibly toward the environment

Organization

ManagementthinspStructuresthinspforthinspSustainabilityWacker Chemie AGrsquos fourshymember Executive Board oversees the Grouprsquos strategies resources infrastructure and organizational structure President and CEO Dr Rudolf Staudigl heads the Board The other members are Dr Joachim Rauhut Dr Wilhelm Sittenthaler and Auguste Willems An Executive Board Meeting is WACKERrsquos highest decisionshymaking authority Below the Executive Board there are various committees whose membership spans several organishyzational sectors and legal entities These committees ensure that corporate strategies are implemented groupwide

CommitteesthinspthinspMeetingsthinspwiththinspSpecificthinspExectivethinspBoardthinspMembers

EHS 1 and PS 2

Strategy Meeting

Legal Officers and Representatives

Corporate Strategy Committee

Meeting of Entire Executive Board

Divisional EHS 1 and PS 2 Representatives

Corporate EHS 1 and PS 2 Meeting

HR3 Strategy Meeting

Health Promotion Steering Committee

Group Coordinator for Responshysible Carereg

Group Coshyordinator for Environmenshytal Protection

Group Coordinator for Safety

Group Coordinator for Product Safety

Group Coordinator for Hazardshyous Goods

Group Coordinator for Export Controls

Group Coordinator for Health

Functions

1 Environment Health Safety2 Product Safety3 Human Resources

The Corporate Strategy Committee (KUS) for example deliberates on strategically important processes potential market or competitor developments and key special topics not directly related to daily operations The committee comprises the entire Executive Board businessshydivision presidents and corporateshydepartment heads

CoordinatingthinspSustainabilitythinspatthinspWACKER

The main committees for environment health safety and product safety are the EHS and PS Strategy Meetings (convened annually) and the Corporate EHS and PS Meetings each led by the Executive Board member responsible for Site Management Personnel policies are dealt with monthly by the HR Strategy Group while employee health is addressed once a year by the Health Promotion Steering Committee ndash both are chaired by WACKERrsquos personnel director

The Corporate Sustainability department was founded in 2011 Its task is to manage sustainshyability activities and initiatives throughout the Group see Outlook on p 26

WACKER has grown over the past years Our international presence has kept pace with that growth We have established new production sites and expanded existing ones In 2009 and 2010 we reviewed our sustainability management structures and processes adapting them to reflect the companyrsquos increasing level of globalization To this end WACKER initiated projshyects such as ldquoGlobal EHS amp PS Excellencerdquo This project has helped standardize global manshyagement and reporting on the environment and health amp safety and on product safety (EHS amp PS) without losing sight of regional requirements Thus guidelines and instructions are now implemented by the local heads of WACKER subsidiaries rather than by the various business divisions

PersonnelthinspResponsibilityResponsibility for the key areas of environment health amp safety and product stewardship rests with the Group coordinators They report direct to the WACKER Executive Board and define groupwide standards in the form of goals and processes These standards are to be followed by every corporate sector and site worldwide Alongside the Group coordinators WACKER has legally mandated officers and representatives for managing specific areas such as incidents and severely disabled staff

Under German law exportshycontrol and hazardousshymaterials officers must be appointed In 2009 we made them Group coordinators They report to the CFO who also holds the position of Group Export Officer

The Group coordinator for Responsible Carereg supported and advised our business divisions and corporate departments in their sustainability efforts He helped ensure that our business partners in the supply chain also commit to health amp safety standards and to act responsibly toward the environment

ManagementthinspSystemsAt WACKER we control our operational processes with the help of an integrated management system (IMS) This system regulates workflows and responsibilities by taking equal account of productivity quality environment and health amp safety It is based on customer demands legal regulations our own sustainable business principles and national and international standards WACKERrsquos voluntary commitments regarding the Responsible Carereg and Global Compact initiatives exceed legislative requirements The IMS at WACKER builds upon groupshywide regulations for implementing our corporate policies It complies fully with ISO 9001 (qualshyity) and 14001 (environmental protection) standards and partially with OHRIS OHSAS (plant safety and occupational health amp safety) ISO TS 16949 (quality) and HACCP (food hygiene)

WACKERrsquosthinspCorporatethinspSustaithinspnabilitythinspDepart-mentthinspEstablishedthinspinthinsp2011

We are working on replacing individual certification for business divisions and corporate departments with Group certification to ISO 9001 and ISO 14001 by 2011 One exception here is WACKER subsidiary Siltronic whose sites are all certified to ISO TS 16949 ISO 14001 and OHSAS 18001 due to the companyrsquos specific processes and customer requirements We moved a step closer to achieving Group certification by gaining approval for inclusion of the followshying sites in the period under review

Germany Burghausen Munich Nuumlnchritz Kempten Cologne and Stetten USA all sites WACKER Greater China all sites Czech Republic Plzeň South Korea Ulsan Technical competence centers Dubai Moscow and Shanghai

With the exception of the sites in Brazil India and Jena as well as new acquisitions in 2010 all production sites have been included on the Group certificate In granting certification the certifying company is confirming that our specifications are implemented across all WACKER sites

In the next few years WACKER sites will be certified to OHSAS an internationally recognized occupational health amp safety management system Preparations began in 2009 2010 We compiled a checklist to help the sites assess their degree of compliance with OHSAS and where there are gaps to be filled

Siltronic has submitted all its sites to an independent quality audit every year since 2006 From the Executive Board right down to production staff Siltronic is evaluated for complishyance with international standards ISO TS 16949 ISO 14001 and OHSAS 18001

WACKER and Siltronic launched an energy management system at their German sites in Burghausen Nuumlnchritz and Freiberg in 2009 with the goal of recording and lowering energy consumption In the period under review the energy management systems of WACKERrsquos Burghausen and Nuumlnchritz sites as well as Siltronicrsquos Burghausen and Freiberg sites were audited for the first time by an external auditor and certified to ISO 14001 in accordance with the German Renewable Energy Act (EEG)

ControllingthinspInstrumentsAbout half the approximately 360 WACKER IMS regulations and instructions govern processes for environment and health protection plant safety occupational health amp safety and prodshyuct safety

All our processes are designed to keep customers satisfied meet our obligations to society and to secure WACKERrsquos competitiveness Each of our sites achieves these goals in different ways At Siltronicrsquos Portland site (Oregon USA) a very effective ldquoQuality and Value Improveshyment Systemrdquo uses a wide range of control mechanisms ndash such as balanced scorecards and systems for developing prioritizing and tracking action plans So that employees can view action plans and success rates at any time Portland publishes them in a database and on a bulletin board

ProductivitythinspProgramsTo remain globally competitive companies need to minimize their process costs The Wacker Operating System (WOS) was launched in 2004 to boost WACKER productivity along the entire supply chain The target figure is a 10shypercent annual increase in productivity WOS results are regularly reported to the Executive Board

WACKER Certificateswwwwackercom certificates

In 2009 our production facilities were running at very low capacity as a result of the financial crisis WOS strategy was originally about cutting specific (volumeshyrelated) costs but this was no longer sustainable in 2009 Instead WOS was used to significantly lower overall costs A year later we reached our original goal with specific production costs rising far less than production volumes In 2010 WOS focused on the efficient use of raw materials and energy savings In both years WACKER carried out around 1000 productivity projects worldwide

Established by WACKER in 2009 to further cement WOS within the company the WOS ACADEMY offers training in productivity topics Participants are given handsshyon training in specific projects at the various plants and are thus able to apply the methods immediately The WOS ACADEMY instructors act as advisors during these projects To foster sharing of experiences a WOS Forum was set up

In 2007 WACKER launched its POWER PLUS energyshyefficiency project for the Burghausen and Nuumlnchritz sites targeting a 10shypercent reduction in specific energy consumption at both sites by late 2009 (base year 2006) In 2009 we extended the program to our Cologne site For further details of POWER PLUS see Environmental Protection on p 47

Siltronic also launched a productivity initiative called Fab Improvement Program In doing so this business division is looking for ways to boost production capacity for 300 mm silicon wafers Through standardized meetings and experienceshysharing between the various shifts Siltronic managed to raise its capacity by up to 10 percent In late 2010 the program was exshytended to smallshywafer production

IdeathinspManagementEmployeesrsquo ideas and suggestions prove especially beneficial to companies in hotly contestshyed markets and during difficult economic times WACKERrsquos Idea Management program again reported record figures in 2010 In total 7702 suggestions were submitted (2009 5724) The overall benefit accruing therefrom fell slightly to euro119 million in 2010 (2009 euro124 million) The participation rate (number of submitters per 100 employees) increased markedly to 33 percent up from 28 percent in 2009 The German Institute of Business Administration (ldquodibrdquo) awarded WACKER the ldquodibshyFoumlrderpreis 2009rdquo for its good ideashymanagement performance

To maximize the benefit from any ideas submitted WACKER has interlinked the Employee Suggestion Program the Wacker Operating System (WOS) and Innovation Management

ThethinspWACKERthinspACADEMYthinspinthinspMoscowthinspThisthinspinterna-tionalthinspfacilitythinspoffersthinspthethinspidealthinspplatformthinspforthinspsector-specificthinspnetworkingthinspbetweenthinspcustomersthinspsalesthinsppartnersthinspandthinspWACKERthinspexperts

2010 2009 2008

Number of improvement suggestions thinsp 7702 5724 thinsp 5808

Total benefits ( euro million ) thinsp 119 124 thinsp 147

Participation rate 1 ( ) thinsp 33 28 thinsp 28

1 Submitters per 100 employees

ThethinspWACKERthinspsitethinspinthinspBurghausenthinsphasthinspexpandedthinspsteadilythinspoverthinspthethinsppastthinspfewthinspyearsthinspAnthinspideathinspwhichthinspoccurredthinsptothinspLudwigthinspMiedlthinspathinspforemanthinspinthinspthethinsphydro-genthinspchloridethinspfactorythinspensuredthinspthatthinspcoolingthinspwaterthinspprovisionthinspwasthinspablethinsptothinspkeepthinsppacethinspwiththinspthatthinspexpan-sionthinspMiedlthinsprealizedthinspthatthinspitthinspwasthinsponlythinspnecessarythinsptothinspoperatethinsponethinspcoolingthinspwaterthinsploopthinspifthinspthethinsptwothinspabsorp-tionthinspcolumnsthinspwerethinsprunningthinspatthinsplessthinspthanthinspfullthinspcapac-itythinspHethinspthereforethinspproposedthinspconnectingthinspthemthinspupthinspinthinspseriesthinspthethinspcoolingthinspwaterthinspexitingthinspthethinsponethinspsynthesisthinsptowerthinspwouldthinspservethinspasthinspthethinspfeedthinspforthinspthethinspotherthinspThisthinspsimplethinspmeasurethinsphasthinspshavedthinsp2thinspmillionthinspcubicthinspmetersthinspoffthinspthethinspsitersquosthinspconsumptionthinspofthinspcoolingthinspwaterthinspThisthinspbenefitsthinspboththinspthethinspenvironmentthinspandthinspsavesthinspthethinspcom-panythinspathinspsix-digitthinspeurothinspsumthinspeachthinspyearthinspldquoThethinspgreatthinspmeritthinspofthinspthisthinspideathinspisthinspthethinsprecurringthinspbenefitthinspthethinspcompanythinspgainsthinspfromthinspthisthinspsuggestionthinspyearthinspafterthinspyearrdquothinspexplainsthinspErwinthinspSchadhauserthinspresponsiblethinspforthinspBurghausenrsquosthinspideathinspmanagementthinspprogramthinspaddingthinspthatthinspldquoIdeasthinsplikethinspthisthinsparethinspextremelythinspimpor-tantthinspinthinspfinanciallythinspdifficultthinsptimesrdquo

ComplianceThe social ethical and business principles embraced by WACKER are summarized in our Code of Conduct All WACKER employees are required to follow it There are separate and or supshyplemental guidelines for individual Group companies (e g Siltronic AGrsquos Code of Ethics) and corporate sites (e g WACKER Greater Chinarsquos Employee Handbook) The Grouprsquos US subsidshyiaries have their own compliance programs tailored specifically to US law

WACKER does not tolerate violations of its Code of Conduct or of any legal requirements Any employee who has questions about appropriate behavior at work can receive counsel from supervisors specialist units (e g legal department) and employee representatives We expanded our compliance team beyond Germany the USA and China in 2010 by appointing and training new compliance officers at other major production locations As a result emshyployees in Japan India South Korea Brazil and Singapore now have direct access to comshypliance officers In 2010 WACKER Greater China set up a compliance hotline that enables employees and business partners to report any breaches of compliance anonymously Every year employees in the region must sign a declaration regarding proper conduct

IdeathinspManagement

AnthinspEmployeersquosthinspIdeathinsptothinspSavethinsponthinspCoolingthinspWater

Location Company

GermanythinspMunich ( Germany and countries not expressly thinspmentioned ) Coordination and Management Group Compliance Management

Wacker Chemie AG thinsp

ThethinspAmericasAdrian ( Michigan USA ) thinspPortland ( Oregon USA ) thinsp

Satildeo Paulo Brazil thinsp

Wacker Chemical Corp thinspSiltronic Corp thinsp

Wacker Quiacutemica do Brasil Ltda thinsp

AsiathinspKolkata India thinsp

Singapore Singapore thinspSingapore Singapore thinsp

Shanghai China thinsp

Hikari Japan thinspTokyo Japan thinsp

Seoul South Korea thinsp

Wacker Metroark Chemicals Pvt Ltd thinsp

Siltronic Singapore Pte Ltd thinspSiltronic Samsung Wafer Pte Ltd thinsp

Wacker Chemicals China Company Ltd ( Holding ) thinsp

Siltronic Japan Corp thinspWacker Asahi Kasei Silicone Co Ltd thinsp

Wacker Chemicals Korea Inc thinsp

In 2010 the Compliance Management team held numerous classroom seminars to inform employees about WACKERrsquos ethical and legal management principles We developed and implemented a mandatory online course that has been used to train employees who have regular business contacts Enforced throughout the Group this course complements the existing online training on European antitrust law (WACKER Antitrust Program)

Instruction in antitrust law is essential for WACKER sales and marketing employees US staff receive antitrust law training tailored to the market there In addition to online training (which participants must regularly complete) employees have the opportunity to attend courses on the subject during divisional and regional meetings and international sales conferences Global rollout of antitrust training commenced in 2009 A year later WACKER launched online training on data protection

Our compliance programs are designed to prevent misconduct minimize the repercussions of misconduct and ndash in accordance with the UNrsquos Global Compact ndash identify any cases of corruption or other legal infringements To promote compliance we use such organizational methods as the separation of responsibility and our dualshycontrol policy Separation of reshysponsibility makes it impossible for any one employee to singleshyhandedly carry out transacshytions involving payments The purchasing unit is thus quite distinct from the ordering unit Dual control ensures that every critical transaction is checked by a second person

Our internal Corporate Auditing department regularly checks all corporate entities on behalf of the Executive Board The Executive Board adopts a riskshydriven approach when choosing audit topics which if necessary are flexibly adjusted during the year to take account of changes in underlying conditions Its auditors look particularly frequently at processes and areas with a high exposure to corruption or to legal noncompliance For capitalshyintensive enshygineering activities (e g project engineering and maintenance) WACKER employs specially qualified industrial personnel as auditors In total Corporate Auditing conducted 37 audits in 2010 (2009 36 audits) The audits did not reveal any major complaints Audit recommendashytions to optimize processes are being implemented

CompliancethinspOfficersthinspatthinspWACKER

CorporatethinspAuditingthinspthinspCompletedthinsp37thinspAuditsthinspthinspinthinsp2010

WACKERrsquos corporate culture is characterized by mutual respect and trust However inapproshypriate behavior on the part of individual employees can never be eliminated In these cases we rely on our internal risk assessments

2010 2009 2008

Level of key fines 1 and number of nonshymonetary penalties for thinspnonshycompliance with requirements of environmental legislation

ndash ndash thinsp ndash

Number of cases of discrimination and measures taken thinsp ndash 2 ndash 2 thinsp ndash 2

Number of organizational units subjected to corruption audit thinsp 37 36 thinsp 30

Organizational units subjected to corruption audit ( ) thinsp 30 30 thinsp 30

Employees 3 trained in corruption prevention ( ) thinsp 51 ndash thinsp ndash

Measures 4 taken in response to cases of corruption thinsp ndash 1 thinsp ndash

Number of complaints about anticompetitive behavior thinspviolation of antitrust or monopolies legislation

Level of key fines 1 and number of nonshymonetary penalties thinspfor breaches of legal requirements

Level of key fines 1 for breaches of legal requirements relating thinspto the supply and use of products and services

1 Level of key fines starting at euro100002 No recording of cases of discrimination at WACKER3 WACKER Germany employees only training evaluated from 2010 on4 Notice of employment termination

CustomerthinspandthinspSupplierthinspManagementWACKER strives to provide products and services that benefit its customers Satisfied cusshytomers are critical to our success To steadily enhance their satisfaction we are in constant dialog with not only customers but also suppliers and logistics providers

The WACKER SILICONES WACKER POLYMERS and WACKER BIOSOLUTIONS divisions use the cusshytomer information and control system (KISS) to manage their customer relations KISS supports Sales for example with correspondence and with complaints evaluation processing Every complaint is entered into KISS and systematically tracked until our final reply has been sent to the customer We endeavor to reply to customers within 48 hours

We regularly solicit feedback from our customers about the quality of our products and services WACKER POLYSILICON for example conducts annual customer surveys The Siltronic business division analyzes the supplier evaluations which its major customers conduct each year The surveys and comparative analyses have repeatedly confirmed WACKERrsquos excellent reputation over the years

We also seek to build up and nurture partnerships with the best suppliers Our purchasing conditions require suppliers to observe our business principles e g the sustainability aspects entailed by Global Compact Where a violation is identified WACKER takes corrective action This can range from joint decisions on improvements to temporary blocking of the supplier through to termination of the business relation

WACKER Code of Conduct Siltronic Code of Ethics

CompliancethinspCases

We also ensure that our suppliers are certified to ISO 9001 (quality) and ISO 14001 (environmental protection) Our complaints management system enables us to improve processes at short notice Our key suppliersrsquo performance is entered into an evaluation which we discuss with them collaboratively WACKER honors the best suppliers and shippers at the annual Supplier Days held by Technical Procurement amp Logistics (MW)

In 2009 and 2010 MW began systematically analyzing its most important suppliers around the world for the first time The goal here is to remove risky suppliers and to preempt threats to the supply chain More than 1000 suppliers from Europe Asia and the USA were evaluated on the basis of five risk factors unique selling proposition quality stability protection of intelshylectual property and importance to production at WACKER

For many years now WACKERrsquos Siltronic subsidiary has been deploying its own risk manageshyment system for suppliers as a way of securing deliveries and services in the long term Supshypliers are assessed by criteria such as quality delivery reliability and solvency The system then categorizes them by risk Where the risk to criteria fulfillment is acute countermeasures are promptly taken

DialogthinspwiththinspStakeholdersCompanies cannot act in their own interests They must have the consent and support of society Regular and open dialog with all stakeholders is one of our business principles We believe that dialog offers us a major opportunity to prepare for new challenges promptly avoid risks and realize our full potential

WACKER constantly communicates with a number of stakeholder groups throughout the world employees customers suppliers analysts investors journalists scientists neighbors and politicians as well as representatives from NGOs authorities and associations We use a monitoring and analysis tool to identify our principal stakeholders and their expectations Stakeholder dialog is conducted in many ways ndash through the outreach activities of WACKERrsquos top executives managers sites and departments The focus is always on faceshytoshyface disshycussions i e on direct contact Whatrsquos more we communicate with stakeholders through publications (annual report press releases employee newspaper etc) special events (openshyhouse days supplier days investor roadshows etc) tradeshows committee work and presentations We sound out our workforce by conducting regular employee surveys One such survey in 2010 asked our employees in Germany about occupational health amp safeshyty In the same year Siltronic sought out the views of its workforce on the culture of quality and environmental protection at its German sites

WACKERthinspensuresthinspthatthinspsuppliersthinsparethinspcertifiedthinsptothinspandthinspcomplythinspwiththinspthethinspGlobalthinspCompactrsquosthinspsustainabilitythinspprinciples

In 2010 we quizzed our stakeholders about WACKERrsquos sustainability efforts and for the first time its reputation A total of 203 individuals with links to our company took part in telephone interviews or filled out online questionnaires The survey was held in Germany China and the USA Its outcome showed that WACKER enjoys an outstanding reputation among the various stakeholder groups We scored a very high figure of 88 points in the reputation stakes ndash this compares with the average score for industrial companies and service providers of just 51 points WACKERrsquos high reputation stems primarily from the high level of trust which is placed in the company

0 1 2 3 4 5

Trust thinsp thinsp thinsp thinsp thinsp thinsp 45

General reputation thinsp thinsp thinsp thinsp thinsp thinsp 41

Quality of service thinsp thinsp thinsp thinsp thinsp thinsp 40

Economic success thinsp thinsp thinsp thinsp thinsp thinsp 40

Empathy thinsp thinsp thinsp thinsp thinsp thinsp 38

5 is the maximum value

Some 75 percent of stakeholder representatives are genuine ambassadors for WACKER They have been totally won over by the companyrsquos level of expertise and ability to deliver Those surveyed include employees customers suppliers analysts administrative and civil service staff as well as NGOs and politicians

The aim of the sustainability survey was to find out how these interest groups viewed our commitment to sustainability and where they saw room for improvement The evaluation of the discussions and questionnaires revealed that our sustainability efforts are viewed slightly more favorably than in 2008 see Sustainability Report 2007 2008

0 1 2 3 4 5

Surveythinsp2010thinsp1thinspthinsp thinsp thinsp thinsp thinsp thinsp 38

Survey 2008 2 thinsp thinsp thinsp thinsp thinsp thinsp 35

Conversion of 2008 results from scale of 10 to scale of 5 1 = poor to 5 = excellent 1 203 participants in 2010 2 30 participants in 2008

Stakeholders ranked WACKER highly to very highly in the following areas safety of production facilities safety of products and their transportation promotion of employee health sustainshyable products and reduction of waste volumes and emissions For the future they challenged us to set climate protection goals engage in frank and continuous dialog with society and engage in sponsorships (science culture society)

ReputationthinspDriversthinspforthinspWACKER

OpinionthinspofthinspSustainabilitythinspPerformance

+ndash

Intensifythinspcommunication Developthinspfurtherthinsp

Safety of production plants

Promoting employee healthoccupational safety Transport safety

Sustainable productsReduction of waste volumes

Diversity Socialcultural sponsorships

Sponsorship of science

Treatment of suppliers

Setting of climate protection goals

Take on social responsibility

Frank and continuous dialog with society

Regional involvement

Special social benefits within the company

Transport routes

Reduction of emissions

Economical use of resources

Creation and retention of jobs

Product safety

Currentlythinspnothinspsignificantthinspneedthinspforthinspaction Renewthinspefforts

Influence on sustainability evaluation

The greatest challenge raised in the 2008 stakeholder survey was the harmonization of social and ecological standards across all sites WACKER responded in the period under review with its ldquoGlobal EHS amp PS Excellencerdquo project see p 31

AwardsthinspandthinspPrizesWACKER has supplied customers with highshyquality products and outstanding services for many years Customer satisfaction is the cornerstone of our success and is reflected in the customer awards we have received

FujitsuthinspthethinspJapanesethinspITthinspservicethinspproviderthinsphonoredthinspSiltronicthinspinthinsp2009thinspwiththinspitsthinspldquo2008thinspSupplierthinspAwardrdquothinspWiththinspathinspscorethinspofthinsp885thinsppointsthinspinthinspthethinspfirstthinsphalf-yearthinspandthinsp865thinspinthinspthethinspsecondthinspSiltronicthinspwasthinspadjudgedthinsptothinspbethinspthethinspbestthinspsiliconthinspsupplierthinspFujitsuthinsphonorsthinsponlythinsp20thinspofthinspitsthinspmorethinspthanthinsp300thinspmajorthinspsuppliersthinspThisthinspisthinspthethinspsecondthinsptimethinspinthinspathinsprowthinspthatthinspSiltronicthinsphasthinspreceivedthinspthisthinspawardthinspldquoSuchthinspawardsthinsparethinspimportantthinsptothinspthethinspwholethinspcompanyrdquothinspsaysthinspPaulthinspLindbladthinspmemberthinspofthinspthethinspSiltronicthinspexecutivethinspboardthinspldquoTheythinsparethinspathinspgoodthinspindicatorthinspofthinsphowthinspcustomersthinspviewthinspthethinspperformancethinspofthinspourthinspproductsthinspourthinspservicethinspandthinspnaturallythinspourthinsppricingthinsptoordquo

ActionthinspMatrix

SiltronicthinspReceivesthinspFujitsuthinspAward

Award Recipient Sponsor

Supplier of the year Award 2008 thinsp Siltronic Corp thinsp Fairchild thinsp

Supplier Award Category Raw Materials thinsp Siltronic AG thinsp Analog Devices thinsp

Supplier Award 2008 thinsp Siltronic Japan Corp thinsp Fujitsu thinsp

Annual QCDS 1st Place Wafer Supplier Award for 2008 thinsp Siltronic Corp thinsp Wafer Tech thinsp

New Quality Independence Guarantee thinsp Siltronic AG thinsp Panasonic thinsp

Supplier of the year thinsp Siltronic Corp thinsp Tower Jazz thinsp

Best Supplier Award thinsp Wacker Chemie India thinsp Grasim Industries thinsp

Innovation Award thinsp WACKER SILICONES thinsp Bostik thinsp

Best Supplier Award 2009 thinsp Siltronic Singapore Pte Ltd SSMC thinsp

Supplier of the year 2009 thinsp Siltronic Corp thinsp Fairchild thinsp

Best Supplier Award thinsp Siltronic Japan Corp thinsp Omron thinsp

Supplier Excellence Award thinsp Siltronic AG thinsp XshyFAB thinsp

QualitythinspAwardsthinsp2009

KlausthinspBoumlttcherOperationsthinspManagerthinspWastewaterthinspTreatmentthinspPlantthinspthinspNuumlnchritzthinspPlant

ldquoWe use water sparingly and purify our wastewater optimallyrdquo

Goals and Outlook

EnergyWACKER is continuing to improve its energy efficiency Due to the recent acquisishytion of the siliconshymetal plant in Holla ( Norway ) primaryshyenergy consumption and thus carbon dioxide emissions and electricity consumption are expected to rise in 2011 Our electricity consumption will also increase once the Poly 9 expansion stage comes on stream in Nuumlnchritz

GreenhousethinspGasthinspEmissionsBy the end of 2011 we will for the first time record our indirect greenhouse gas emissions ( attributable to boughtshyin energy according to Greenhouse Gas Protoshycol Scope 2 ) In the medium term we also intend to measure Scope 3 emissions as per the Greenhouse Gas Protocol These include all emissions generated along the supply chain (e g by suppliers or through the disposal and transporshytation of products)

EmissionsthinspTradingThe necessary emissions certificates have been allotted to us free of charge for the 2008 ndash 2012 trading period So far WACKER has not been adversely affected by emissions trading At this stage it is difficult to gauge how emissions trading will be implemented from 2013 However we assume that in the medium term we will incur additional financial costs as a result of emissions trading WACKER has installed an early warning system which enables us to respond quickly if our carshybon credits are insufficient to cover the emissions produced

BiodiversityIn 1992 the United Nations Conference on Environment and Development passed the Convention on Biological Diversity In May 2011 the EU Commission published a biodiversity strategy to 2020 The German Chemical Industry Association ( VCI ) is preparing a related policy document to which WACKER as a VCI member is conshytributing

DegradationthinspofthinspPollutantsSince 2010 we have been investigating whether pollutants ( solvent residues ) in the groundwater can be broken down by naturally occurring microorganisms at our Nuumlnchritz site We expect to receive the test results in 2011

Reducethinspspecificthinspenergythinspconsumptionthinspbythinsp10thinspper-centthinsp(thinspreferencedthinsptothinsp2006thinsp)Corporate entity Burghausen and Nuumlnchritz sitesDeadline 2009Implementation status Goal not achieved Alshythough energy consumption fell in many areas it varied considerably due to differential capacity utilization at individual production facilities In 2009 the Nuumlnchritz plant saved more than 30 percent energy per metric ton siloxane compared with 2006 Specific energy consumption rose by 24 percent at the Burghausen plant This is due to the significant shift toward energyshyintensive polysilicon producshytion in our product mix Moreover underutilization of many production facilities during the economic crisis had a negative impact

Certifythinspkeythinspproductionthinspsubsidiariesthinspasthinspnationalthinspcompaniesthinspwiththinsplowthinspenvironmentalthinspimpactthinsp(thinspcerti-ficationthinspcarriedthinspoutthinspbythinspthethinspEnvironmentalthinspProtec-tionthinspBureauthinspChinathinsp)thinspWackerthinspChemicalsthinsp(thinspZhang-jiagangthinsp)thinspCothinspLtdthinspWackerthinspChemicalsthinspFumedthinspSilicathinsp(thinspZhangjiagangthinsp)thinspCothinspLtdthinspWackerthinspPolymerthinspSystemsthinsp(thinspNanjingthinsp)thinspCothinspLtdCorporate entity WACKER Greater ChinaDeadline 2010Implementation status Goal mainly reached All three production subsidiaries fulfill the requireshyments for certification (thinspe g final acceptance by the local environmental bureau and ISO 14001 certishyficationthinsp) One production subsidiary has already passed the final audit the authorities are still conshyducting their review at the other two subsidiaries

Increasethinspthethinspnumberthinspofthinspreusablethinspfreightthinspcontain-ersthinspusedthinspforthinsp300thinspmmthinspwafersthinspfromthinsp20thinsptothinsp30thinsppercentthinsp(thinspreferencedthinsptothinsp2008thinsp)Corporate entity Siltronicrsquos Burghausen Freiberg and Singapore sitesDeadline 2010Implementation status Goal surpassed Since midshy2010 we have been shipping around 50 percent of our 300 mm wafers from Burghausen Freiberg and Singapore in reusable containers

Expandthinsppolysiliconthinspcapacitythinsptothinsp35000thinspmetricthinsptonsthinspperthinspyearthinspInthinspthethinspformthinspofthinspphotovoltaicthinspmodulesthinspthisthinspamountthinspofthinspsiliconthinspcouldthinsppreventthinspthethinspreleasethinspofthinspupthinsptothinsp200thinspmillionthinspmetricthinsptonsthinspofthinspcarbonthinspdioxidethinspoverthinspthethinsplifetimethinspofthinspathinspphotovoltaicthinspmodulethinsp(thinspupthinsptothinsp30thinspyearsthinsp)Corporate entity GroupwideDeadline 2011Implementation status In 2010 WACKER produced 30000thinspmetric tons of hyperpure polysilicon We are increasing capacity at our Burghausen site to 37000thinspmetric tons per year ( as of Q1 2011 ) Once the Poly 9 expansion stage goes on stream in Nuumlnchritz in 2011 together with the new production facility in Cleveland ( Tennessee USA ) WACKERrsquos total capacity for hyperpure polysilicon will rise to 67000thinspmetric tons a year by 2014 In the form of photovoltaic modules this amount of silicon could prevent the release of up to 380thinspmillion metric tons of carbon dioxide over the lifetime of a photovoltaic module

Calculatethinspindirectthinspemissionsthinspfromthinspthethinsppurchasethinspofthinspenergythinsp(thinspScopethinsp2thinspemissionsthinspasthinspperthinspGreenhousethinspGasthinspProtocolthinsp)Corporate entity GroupwideDeadline 2011

NewthinspGoal

Outlookthinsp

Environmental protection just like safety and health protection is a core component of all processes at WACKER The focus is not so much on remedial measures but on prevention ndash evaluation begins as early as the productshydevelopment and plantshyplanning stages In accordshyance with the core ideas of the Responsible Carereg initiative our environmental protection measures often go beyond what is legally required We continuously work on improving our production processes to conserve resources By closing material cycles and recycling byshyproducts from other areas into production we are able to prevent or reduce waste

Our environmental indicators revealed divergent trends during the period under review Water consumption fell thanks to a new recooling unit for the coolingshywater system at Burghausen our largest site At the same time the amount of nonshymethane volatile organic compounds (NMVOCs) rose due to higher productionshycapacity utilization and plant startshyups in China Overall our environmental figures showed a positive trend

In some areas we have expanded the breadth of data on which our environmental indicators are based this has enabled us to gain a clearer understanding of the actual environmental impacts For example since 2010 we have included internal and external wastewater treatshyment for all Group sites

Operating costs thinsp 65 65 thinsp 68

Investments thinsp 12 9 thinsp 13

InvestmentsthinspinthinspEnvironmentalthinspProtection

Water pollution control thinsp 81 38 thinsp 2

Waste management thinsp 25 05 thinsp 4

Air pollution control thinsp 08 465 thinsp 7

Climate protection thinsp 04 005 thinsp shy

Soil remediation thinsp 02 ndash thinsp shy

1 In 2009 we changed the way we calculate costs investments The costs for 2008 were determined retrospectively using the new method which explains why these figures differ from those cited in our 2007 2008 Sustainability Report

Since 1995 WACKER has been a member of the Bavarian Environmental Pact We are also participating in the new Pact which runs from 2010 to 2015 under the slogan ldquoSustainable growth balanced by environmental and climate protectionrdquo The Environmental Pact is an agreement between the Bavarian government and Bavarian industry in which both parties have declared their belief that natural resources can be better protected through voluntary responsible cooperation between industry and state rather than by laws and regulations alone The pact serves as a catalyst to promote climate protection and energy conservation sustainable mobility environmental engineering and resource efficiency Its primary aim is to avoid environmental pollution

EnvironmentalthinspProtectionthinspCosts1

Our sites regularly inform the public about our environmentalshyprotection activities including annual community meetings at Nuumlnchritz (Germany) as well as similar events with neighbors or ldquoopen housesrdquo at Adrian (Michigan USA) and Zhangjiagang in China Our Burghausen Freiberg and Nuumlnchritz sites publish annual environmental reports containing environmentalshyprotection and safetyshyrelated facts and figures

Environmental Protection in Production

EnvironmentalthinspPerformancethinspAssessmentSince 2004 WACKER has been using a system to assess its sitesrsquo environmental performance We use it to convert a sitersquos total emissions and energy consumption into environmental units which take both absolute emissions and soshycalled weighting factors into considershyation These factors take account of four criteria

Environmental impact Safety of treatment disposal Requirements imposed by environmental legislation and corporate policy Public acceptance

For example we give energy consumption (power heat consumption) a high weighting due to public awareness of the significance of greenhouse gases and international climateshyproshytection agreements Emissions of carbon dioxide (CO2) and other greenhouse gases are largely energyshyrelated at WACKER

The number of environmental units has risen due to WACKER POLYSILICONrsquos expansion program and its corresponding increase in electricity consumption Nevertheless we made significant advances in 20092010 based on production volumes

20101 2009 2008

Environmental units thinsp 75563 67934 thinsp 70666

Gross production volume in 1000 metric tons thinsp 12100 9111 thinsp 7639

Environmental units per 1000 metric tons of gross production thinsp 62 75 thinsp 925

1 Excluding the silicon-metal production facility in Holla Norway

TradingthinsphazardousthinspwastethinspforthinspflowersthinspndashthinspthatthinspwasthinspthethinspmottothinspforthinspthisthinspyearrsquosthinspldquoHouseholdthinspHazardousthinspWastethinspDayrdquothinspheldthinspeverythinspspringthinspforthinspneighborsthinspatthinspWACKERrsquosthinspAdrianthinspMichiganthinspsitethinspThethinspeventthinspisthinspanthinspopportunitythinspforthinspneighborsthinspfromthinspLenaweethinspcountythinsptothinspbringthinspinthinspalmostthinspanythingthinspnotthinspallowedthinspinthinsptrashthinspcansthinspsuchthinspasthinspoilthinspandthinsppaintsthinspflammablethinspliquidsthinspwastethinspoilthinspantifreezethinspinsectthinsprepellentsthinspspraythinspcansthinspalkalinethinspandthinspmercurythinspbatteriesthinspfluorescentthinsptubesthinspandthinspincandescentthinsplampsthinspTothinspthankthinspthethinspneighborsthinspforthinspbringingthinsptheirthinsphazardousthinspwastethinspalongthinspWACKERthinspgivesthinspawaythinspfloweringthinspplantsthinspHeldthinspsincethinsp1997thinspandthinspstaffedthinspbythinspWACKERthinspvolunteersthinspthisthinspcampaignthinsphasthinspresultedthinspinthinspthethinspcollectionthinspofthinsparoundthinsp112thinspmetricthinsptonsthinspofthinsphazardousthinspwaste

EnvironmentalthinspUnits

AdrianthinspHouseholdthinspHazardousthinspWastethinspDaythinspforthinspNeighbors

IntegratedthinspProductionWACKERrsquos integrated production system primarily based on salt silicon and ethylene as starting materials is one of our greatest strengths In our integrated processes we optimize material efficiency by purifying byshyproducts and reusing them or making them available for external use In our integrated ethylene production system for example we use ethylene to obtain organic intermediates which we then turn into polymer dispersions and dispersible polymer powders Our integrated silicon production system operates along similar lines Although comprising only a small number of raw materials ndash silicon methanol and salt (sodium chloride) ndash this system enables us to manufacture over 3000 silicone products as well as pyrogenic silica and polysilicon

A further focus of our integrated production is to minimize hydrogen chloride consumption Hydrogen chloride is an essential auxiliary deployed in the production of reactive intermedishyates from energyshypoor natural materials We then use these intermediates to make our end products Hydrogen chloride production requires a lot of energy In our integrated material loop we recover both hydrogen chloride and some of the energy in the form of heating steam during the conversion of the chlorineshycontaining intermediates to chlorineshyfree end prodshyucts (e g hyperpure silicon or pyrogenic silica) We then return the recovered hydrogen chloride to the production loop and reuse it This closed material loop reduces emissions and due to lower raw material consumption transportation

For over ten years we have been using a chlorshyalkali membrane process to supply chlorine hydrogen caustic soda and hydrogen chloride as starting materials to our Burghausen site This membrane electrolysis has enabled us to stop using mercuryshybased chlorine electrolysis and simultaneously cut energy consumption by 25 percent Thus WACKER has fulfilled the chemical industryrsquos voluntary commitment to phase out mercuryshybased processes by 2020 well ahead of schedule

Recycle HCI

Recycle HCl

Chlorine

Methanol

Trichlorosilane Polysilicon

Fine chemicals

Silicon wafers

Tetrachlorosilane

Basethinspchemicals Integratedthinspchemicalthinspproductionthinspsystem Salesthinspproducts

Membrane electrolysis

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

SiliconesHydrogen chloride Chlorosilanes SiloxanesMethyl chloride

Metallurgical silicon

MaterialthinspFlowsthinspinthinspWACKERrsquosthinspIntegratedthinspHydrogenthinspChloridethinsp(HCl)thinspSystem

The use of lowshytemperature adsorption in polysilicon deposition has allowed us to save 15000 metric tons of carbon dioxide annually since 2010 We now process hydrogen for reshyuse instead of extracting it from natural gas As a result we are able to reduce carbon dioxide emissions and improve the energy and CO2 balance of solar cells

Zhangjiagang in China joins Burghausen (Bavaria) and Nuumlnchritz (Saxony) as our third major integrated production site In Zhangjiagang WACKER and Dow Corning Corporation commisshysioned a production facility for pyrogenic silica and siloxane in November 2008 In late 2010 the facility reached an annual capacity of 200000 metric tons We rely on stateshyofshytheshyart environmental technology in China too There we operate facilities according to stringent international EHampS standards

EnergyThe chemical industry is an extremely energyshyintensive sector In Germany alone it uses around 20 percent of all the power consumed by industry We believe it is our responsibility to continuously improve the energy efficiency of our processes This enables us to contribshyute to climate protection while remaining competitive in the world market

In 2010 the expansion of polysilicon production at Burghausen and the acquisition of the siliconshymetal production facility at Holla in Norway increased WACKERrsquos electricity consumpshytion to 38 million MWh (2009 27 million MWh) The expansion of polysilicon production had also been the main reason for the rise in the amount of electricity consumed in 2009 (2008 24 million MWh)

Accounting for 79 percent of the Grouprsquos electricity needs WACKERrsquos production sites in Gershymany purchased power from utilities to cover 50 percent of their electricity requirements in 2010 In line with the utilitiesrsquo primary energy sources about half of this electricity was genershyated from fossil fuels (55 percent) 31 percent came from nuclear energy and 14 percent from renewable energy sources We are continuing to test the use of renewable energies and will include suitable offers as a permanent feature of our energy mix The electricity used at our new production facility in Holla is generated almost entirely by hydropower as is customshyary in Norway

At WACKERrsquos large Burghausen and Nuumlnchritz sites steam and electricity are produced in cogeneration systems These combined heat and power (CHP) plants have more than 80 pershycent fuel efficiency which is twice that of conventional oil gas or coalshyfired power plants Burg hausen also uses hydropower to generate electricity Our hydropower plant generates 270 gigawatt hours annually This environmentally compatible energy source spares us 160000 metric tons of carbon dioxide emissions every year Together the two CHP plants and the hydropower plant generated 15 MWh electricity in 2009 and 2010 respectively This means that WACKER covered roughly 40 percent (2009 55 percent) of its total electricity needs itself

ThethinspAlzwerkethinsphydroelectricthinsppowerthinspstationthinsphasthinspbeenthinspsupplyingthinspthethinspBurghausenthinspsitethinspwiththinsphydropowerthinspsincethinsp1922thinsp

Many chemical reactions generate heat that can be put to use in other production processshyes We have been using integrated heatshyrecovery systems in Burghausen and Nuumlnchritz for years and are continually improving them In this way we can reduce the amount of primary energy (normally natural gas) that our power plants consume

In 2010 our Nuumlnchritz site required around 70 percent less electricity and 85 percent less proshycess steam from its CHP plant to manufacture one metric ton of product than it did in 1999 when WACKER acquired the site We have converted our Nuumlnchritz power plant from heavy fuel oil to more ecologically sound natural gas

Together our large production facilities in Burghausen and Nuumlnchritz consume around 75 percent of groupwide energy demand Due to our acquisition of the Holla site in Norway heat consumption rose to 34 TWh (2009 28 TWh) across the Group Heat consumption figures reflect for the first time the use of solid fossil fuels (coal charcoal and wood) at the newly acquired siliconshymetal plant

In 2009 WACKER and Siltronic introduced an energy management system at their German sites in Burghausen Nuumlnchritz and Freiberg This enables us to identify energy flows and conshysumers as well as energyshysaving opportunities That same year WACKERrsquos Burghausen and Nuumlnchritz sites as well as Siltronicrsquos Burghausen and Freiberg sites began having the new system certified to ISO 14001

Many of our measures to improve the energy efficiency of our production facilities have come from the POWER PLUS project launched by WACKER in 2007 to increase energy efficiency at its Burghausen and Nuumlnchritz plants The project was extended to our Cologne plant in 2009 The success of POWER PLUS is based on two factors our energy experts carefully scrutinized the production facilities and our employees put forward suggestions for improvements All in all we introduced more than 150 measures to improve energy efficiency around 70 percent of which had been implemented by the end of 2010

Here are two examples Our WACKER SILICONES division has optimized distillation operations relating to siloxane production in Burghausen and installed an integrated heatshyrecovery system This saves us around 100000 metric tons of heating steam a year In 2009 the Nuumlnchritz plant saved more than 30 percent heating steam per metric ton of siloxane compared with 2006

We have reduced energy consumption in a number of areas at POWER PLUS participant sites Specific energy consumption (referenced to production output) has varied overall as our proshyduction facilities were operating at fluctuating capacities and we have expanded polysilicon production which is particularly energy intensive Underutilization of many production facilities during the economic crisis of 2009 for example had a negative impact

We are also working on boosting energy efficiency at our sites outside Germany A good example is our cyclodextrin facility at Eddyville (Iowa USA) which was expanded in 2009 Cyclodextrins are biotech sugar molecules that serve as stabilizers and carrier substances in the life sciences cosmetics food and agricultural sectors A substantial amount of the $21 million investment was channeled into a new byshyproduct processing plant that reduces overall steam consumption by 35 percent

Our Siltronic plant in Freiberg has come up with a way to adapt the supply temperature for crystal pullers so that the need for refrigeration machines has been largely eliminated This saved 764 MWh of electricity at the Freiberg site in 2010

We use energyshyefficient electric motors for vehicles and equipment We also save electricity by converting the direct electric drives of pumps in production facilities for example to speedshyregulated drives which automatically cut the speed when lower loads are involved

WethinspSystematicallythinspImprovethinspthethinspEnergythinspEfficiencythinspofthinspOurthinspProductionthinspFacilities

TWh 2010 2009 2008

Electricity consumption thinsp 38thinsp 27 thinsp 24

Heat consumption 1 thinsp 34 28 thinsp 28

Primarythinspenergythinsp

Natural gas thinsp 55 54 thinsp 54

Solid fuelsthinsp2 ( coal charcoal wood ) thinsp 04 ndash thinsp shy

Heatthinsp3 ( supplied by third parties ) thinsp 02 02 thinsp 02

Fuel oil thinsp 001 001 thinsp 001

1 In 2010 heat consumption figures reflect for the first time the use of solid fossil fuels (coal charcoal and wood) at the newly acquired silicon-metal plant in Holla Norway

2 Used at the silicon-metal plant in Holla Norway3 Steam district heating

ElectricitythinspconsumptionthinspGermanythinsp30thinspTWh

ProcuredthinspelectricitythinspGermanythinsp15thinspTWh

42 coshygeneration 1

8 hydropower 2

21 consumption abroad 5

79 consumption in Germany

50 procured electricity

ElectricitythinspconsumptionthinspGroupthinsp38thinspTWh

55 fossil fuels 3

14 renewable energies4

31 nuclear energy

1 Burghausen and Nuumlnchritz2 Burghausen3 Coal lignite oil gas4 Hydro wind solar power5 Outside Germany we purchase electricity from third parties based on the standard local energy mix

AirWACKER participates in European emissions trading with its Burghausen and Nuumlnchritz CHP plants The necessary emissions certificates were allotted to us free of charge for the 2008 ndash 2012 trading period So far WACKER has not been adversely affected by emissions trading

In 2010 WACKER emitted 986000 metric tons of carbon dioxide groupwide ndash 17 percent more than in 2009 (968000 metric tons) This slight increase is due to higher productionshyrelated energy demand Our captive powershygeneration plants subject to the emissions trading proshygram account for 83 percent of carbon dioxide emissions

Carbon dioxide makes up 985 percent of WACKERrsquos greenhouse gas emissions (expressed as CO2 equivalents) The remaining 15 percent is made up of nitrous oxide fluorocarbons and other greenhouse gases In 2009 WACKER emitted some 985000 metric tons of greenshyhouse gases groupwide and ndash excluding the new Norwegian plant in Holla ndash around 1 million

Energy

ElectricitythinspSupply

metric tons in 2010 (2008 989000 metric tons) The fall in 2009rsquos emissions can be explained by reduced capacity utilization as a result of the economic downturn

When it comes to climate protection production is not the only factor ndash our employeesrsquo carbon footprint is also significant We encourage them to leave their cars at home We proshyvide commuter buses for shift workers at Burghausen our largest site At our Chinese sites in Nanjing Shanghai and Zhangjiagang we offer shuttle buses from residential areas to WACKER Siltronicrsquos US site in Portland (Oregon) provides incentives ndash such as subsidized public transportation ndash to encourage employees to commute in an environmentally aware fashion In Singapore Siltronic has arranged for shuttle buses to travel from the site to varishyous parts of the city Employees at Siltronic in Japan have two carshyfree days a month when they walk bike car share or use public transport to get to work

At our German sites we have replaced all the cars in our vehicle pools with the fuelshyefficient VW Golf BlueMotion ndash 60 vehicles are available to employees without company cars who need to make workshyrelated journeys This new vehicle pool saves us around 127 metric tons of CO2 per year

We use electric drives for commercial vehicles such as forklift trucks Groupwide we are switching to energyshysaving electric motors for other equipment as well including pumps and compressors Over two thirds of the materialsshyhandling equipment (trolleys forklift trucks and cranes) at our Burghausen plant now have electric motors Many of our service proshyviders use hydrogen power we are currently testing that source for our own vehicles

t 2010 2009 2008

CO2 carbon dioxide thinsp 985694 967992 thinsp 975931

AirthinspPollutants

NOx nitrogen oxides thinsp 926 963 thinsp 997

NMVOC nonshymethane volatile organic compounds thinsp 415 383 thinsp 501

CH4 methane thinsp 10 9 thinsp 19

N2O nitrous oxide1 thinsp 25 31 thinsp 23

CO carbon monoxide thinsp 133 115 thinsp 121

SF6 sulfur hexafluoride thinsp ndash ndash thinsp ndash

HFC hydrofluorocarbons thinsp 5 4 thinsp 4

PFC perfluorocarbons thinsp ndash ndash thinsp ndash

Dust thinsp 48 31 thinsp 42

Particulate matter thinsp 27 18 thinsp 24

1 Excluding the silicon-metal plant in Holla Norway

EmissionsthinsptothinspAir1

t CO2 e2 CO2

equivalent2010thinsp

2009 2008

CO2 carbon dioxide thinsp thinsp 1 985694 967992 thinsp 975931

N2O nitrous oxide thinsp thinsp 298 7454 9194 thinsp 6970

CH4 methane thinsp thinsp 25 256 229 thinsp 487

HFC hydrofluorocarbons thinsp thinsp 1430 7164 7014 thinsp 5165

PFC perfluorocarbons thinsp thinsp 9800 596 577 thinsp 577

SF6 sulfur hexafluoride thinsp thinsp 22800 18 11 thinsp 18

1 Excluding the silicon-metal plant in Holla Norway2 CO2 e = metric tons of CO2 equivalents as per Greenhouse Gas Protocol Scope 1 (direct emissions excluding indirect emissions from consumption of purchased energy)

3 The GWP ( Global Warming Potential ) is a measure of how much a gas contributes to the greenhouse effect compared with CO2 For example the CO2 equivalent for methane over 100 years is 25 ( according to IPCC Fourth Assessment Report 2007 ) This means that emissions from 1 kg of methane are 25 times more harmful than from 1 kg of carbon dioxide

WaterWater is an extremely precious resource ndash not only as drinking water but also as a raw material solvent and coolant in many technical and chemical processes At WACKER we use water sparingly and always purify our wastewater as effectively as possible

In 2009 water consumption rose by 10 percent groupwide compared with 2008 This increase was largely due to the fact that expansion stage 8 at Burghausenrsquos polysilicon production facility had gone on stream The yearshyround operation of the new recooling plant at Burgshyhausen meant that in 2010 the Group used around 5 percent less cooling water than it did in 2009 This reduction has consequences for water consumption

Most of the water used at Nuumlnchritz comes from an onshysite well Drinking water accounts for just 1 percent of our total water consumption at this site

Compared with conventional fermentation methods our new process for the bacterial proshyduction of pharmaceutical proteins (biologics) has cut emissions to air and water by half at our biotech facility in Jena This success can be attributed to our DENSETECreg (highshycell density fermentation) and ESETECreg (expression and secretion system) technologies which enable us to produce biologics in higher yields The process utilizes ultrapure water obtained from drinkshying water

By modifying production processes our Siltronic division has reduced its use of chemicals for example in wafer cleaning tanks As a result nitrate loads in the wastewater at Siltronicrsquos sites have fallen by 70 percent over the last ten years We reuse water several times over wherever the purity requirements for wafer manufacturing permit This has allowed us to reduce consumption of demineralized (deionized) water by 20 percent in Burghausen and 30 percent in Portland over the last ten years without compromising on quality

Our Ulsan site in South Korea uses process reactors in the production of dispersions which are now mostly cleaned with the aid of polishing machines As a result we used 55 percent less water and 73 percent less detergent in 2010 than we did in 2003 The new cleaning proshycess which involves spraying atomized rinsing water from nozzles has also improved proshyduction quality and increased throughput thus increasing energy efficiency

The chemical oxygen demand (COD) fell significantly in 2009 due to the closure of our site in South Brunswick (New Jersey USA)

GreenhousethinspGasthinspEmissions1

BythinspModifyingthinspOurthinspPro-ductionthinspProcessesthinspWethinspReducethinspWaterthinspandthinspRaw-MaterialthinspConsumption

AtthinspourthinspsitethinspinthinspNuumlnchritzthinspwethinsphavethinspinvestigatedthinspthethinspbiologicalthinspqualitythinspofthinspthethinspwaterthinspinthinspthethinspheadthinspandthinsptailracethinspofthinspthethinspdischargethinspfromthinspthethinspwastewaterthinsptreatmentthinspsystemthinspintothinspthethinspElbethinspriverthinspWethinsphavethinspnotthinspdetectedthinspanythinspadversethinspchangesthinsptothinspwaterthinspqualitythinspinthinspthisthinspElbethinspriverthinsphabitatthinspOverallthinspthethinspElbersquosthinspwaterthinspqualitythinsphasthinspimprovedthinspinthinsprecentthinspyearsthinspandthinspfishthinspstocksthinsparethinspnowthinspflourishingthinspldquoAnglersthinsplikethinsptothinspfishthinsparoundthinspthethinspoutletthinspofthinspourthinspwastewaterthinsptreatmentthinspplantthinspasthinspthethinspwaterthinsptherethinspisthinspsothinspclearrdquothinspexplainsthinspWolfgangthinspSemmlerthinspheadthinspofthinspEnvironmentalthinspPro-tectionthinspandthinspSafetythinspatthinspNuumlnchritz

2010 2009 2008

Water consumption ( m3 ) thinsp 252151000 264532000 thinsp 241286375

Cooling water volume ( m3 ) thinsp 233153000 248061000 thinsp 218310000 3

Wastewater volume 2 ( m3 ) thinsp 21031000 20002000 thinsp 22074455

COD ( chemical oxygen demand ) 4 ( t ) thinsp 1820 2730 thinsp 4782

AOX ( adsorbable organic halides )4 ( t ) thinsp 6 6 thinsp 7

Heavy metals4 ( t ) thinsp 13 16 thinsp 17

Nitrogen 4 ( t ) thinsp 420 410 thinsp 460

Phosphorus 4 ( t ) thinsp 70 54 thinsp 91

1 Excluding the silicon-metal plant in Holla Norway2 Excluding cooling water3 During the acquisition of current data the original value ( 252310068 m3 ) was subsequently corrected to take account of new findings 4 Taking into account internal and or external wastewater treatment for all sites as of the 2010 reporting year

SoilthinspandthinspGroundwaterLike many other longshystanding chemical companies WACKER has some soil contamination on its premises In the pioneering days of chemical production nobody was aware of the dangers posed by certain chemicals or that some substances could persist in the ground for extended periods without undergoing degradation

To remediate this legacy of contamination WACKER has been extracting air from the soil at the Burg hausen site since 1989 This removes predominantly the highly volatile halogenated hydrocarbons from the soil which are then incinerated to render them harmless To date 1921 metric tons of chlorinated hydrocarbons (CHCs) have been removed in this way As soil treatment pro gresses the amount of contaminant removed decreases as is to be expected In 2010 only 23 metric tons were removed (2008 35 metric tons)

Since 2003 we have been using a groundwater stripping plant to treat an area of localized groundwater contamination east of the Burghausen site By the end of 2010 25 metric tons of CHCs had been removed pollutant concentrations have been reduced to one fifth of their original levels In order to reduce the discharge of hexachlorobutadiene (HCBD) into the tailshyrace we are continuing groundwater treatment of the sitersquos contaminated areas The already very low HCBD concentrations continue to fall Currently 65 kg of the pollutant is being reshymoved per year The results of our fish contaminant survey at Burghausen indicate that HCBD discharge into water bodies is falling and that the fish are quite safe to eat

AquaticthinspCommunitythinspElbethinspWaterthinspTested

WaterthinspConsumptionthinspthinspEmissionsthinsptothinspWater1

Additionally there is some groundwater contamination at our Nuumlnchritz site The solvent residues predate WACKERrsquos takeover of the site We have been cleaning up the groundwater there since 2009 and in 2010 we increased the scope of our remediation efforts We pershyformed an inshysitu field test to investigate whether pollutants (solvent residues) in the groundshywater could be broken down by naturally occurring microorganisms We expect to receive the test results in 2011

In 2010 we decontaminated the land earmarked for the construction of Nuumlnchritzrsquos new polyshysilicon production facility We removed 75000 metric tons of contaminated sludge and disshyposed of it correctly This remediation work meant that we could build the new facility on the existing site rather than having to use uncontaminated land That same year we began to expand the Nuumlnchritz wastewater treatment plants in preparation for the commissioning of polysilicon production at the site in 2011 In spring 2011 additional chemicalshymechanical cleaning stages were incorporated into the water treatment system doubling the capacity for inorganic wastewater

Siltronicrsquos site at Portland (Oregon USA) developed a process to biologically degrade tri chloroethylene (TCE) residue in groundwater using microorganisms As a result TCE has decreased by 999+ percent in the treated areas

Prior to 1973 chlorinated hydrocarbons were stored in a chemical warehouse in the southern part of Duumlsseldorf For reasons that remain unclear some of these substances contaminated the soil and groundwater At the time the warehouse was rented by a shipping company Deutsche Bahn (Germanyrsquos national rail company) owns the site which is now being remeshydiated WACKER and the shipper are to make a contribution toward the cleanup costs

WasteIn integrated production we minimize waste by feeding byshyproducts back into the production loop WACKER endeavors to avoid waste throughout a productrsquos entire life cycle

In 2009 waste volumes fell in line with a groupwide reduction in capacity utilization brought about by the economic situation In 2010 we recycled 77030 metric tons of waste a yearshyonshyyear rise of over 20 percent (2009 63430 metric tons)

Groupwide we record the volume of hazardous waste we generate according to two criteria ldquoto be recycledrdquo and ldquoto be disposed ofrdquo Currently we do not have figures relating to the export of waste for the entire Group but we can say that no hazardous waste is exported from our Burghausen site

t 2010 2009 2008

Disposed of 2 thinsp 48520 80860 thinsp 87293

Recycled thinsp 77030 63430 thinsp 74327

Hazardous 2 thinsp 69320 100860 thinsp 108458

Nonshyhazardous thinsp 56230 43430 thinsp 53162

1 Excluding the silicon-metal plant in Holla Norway2 Reduced due to changes in waste-balancing procedures at Calvert City USA

WethinspInvestigatethinspWhetherthinspSolventthinspResiduesthinspCanthinspBethinspBrokenthinspDownthinspbythinspMicro-organisms

Waste1

In 2010 we recovered around 5000 metric tons of dewatered mineral sludge and 2000 metric tons of dewatered pyrogenic silica sludge from the hazardousshywaste incinerator at our Burghausen site for external use as a landfill construction material Previously this material would have been destined for a hazardousshywaste disposal site Our new approach cuts down on the use of more valuable construction aggregates In the future we plan to recover most of the sludge for use in landfills

Due to its high silicon dioxide content dewatered pyrogenic silica sludge can also be used as an additive in cement production Indeed our Burghausen plant supplied around 3500 metric tons of this sludge to a cement factory in 2010 We intend to continue using this new recycling solution In Brazil too we supply the local cement industry with suitable waste from silicone production

WACKER is keen to minimize the environmental impact of its packaging materials For inshystance our Siltronic division prefers reusable packaging such as the Hybox Some 50 pershycent of 300 mm wafers from Burghausen Freiberg and Singapore are shipped in this type of reusable container which is designed for transportation in hygienically sensitive areas Each Hybox shipped saves us 50 kilograms in packaging material Since 2006 these reusable containers have made around 12000 return trips saving us over 600 metric tons of waste overshyall Although we still ship most of our smaller silicon wafers in disposable packaging we have replaced the protective inner layer of foamed plastic with sustainably sourced cardboard

Another example is that we have replaced the plastic bags used to package VINNAPASreg disshypersible polymer powder with recyclable paper bags This saves 106 metric tons of polyethylshyene a year or 800000 plastic bags The same number of recyclable paper bags weighs just 82 metric tons Whatrsquos more WACKER is reducing its packaging material by converting from small to large containers

Short distances to service providers and avoidance of empty space in the containers help to minimize waste We are also implementing similar measures at our sites in China Japan and the USA Take the following example from Burghausen where we have replaced 250shyliter drums for shipping silicone fluids and emulsions with 1000shyliter IBCs (intermediate bulk conshytainers) WACKER fills over 100000 of these reusable containers annually and then sends them to a service provider a short distance away where they are recycled The EUROPISTON tank is another environmentally sound alternative to transport drums A moving internal piston pushes 25 metric tons of silicone sealant ndash equivalent to 125 steel drums ndash into the tank semishytrailer The customer can connect the tank directly to his filling equipment Several thousand metric tons of silicone sealant currently leave our Burghausen site in piston tanks

We have also introduced a chemicalsshyexchange database Burghausen site employees can use it to identify surplus substances either in opened packaging drums or in their original container The database is a practical way to coordinate the recycling of surplus materials

HavingthinspLocalthinspServicethinspthinspProvidersthinspHelpsthinspReducethinspTransportthinspDistances

Siltronicthinsp(OregonthinspUSA)thinspwasthinsponethinspofthinspathinspfewthinspcompa-niesthinsptothinspbethinspawardedthinspthethinspRecycle-At-WorkthinspCerti-ficationthinspforthinspthethinsp2009thinsptothinsp2010thinspperiodthinspbythinspthethinspCitythinspofthinspPortlandthinspThisthinspawardthinsprecognizesthinspSiltronicrsquosthinsprecy-clingthinspandthinspwastethinspreductionthinspaccomplishmentsthinspthinspSiltronicrsquosthinspKoreenthinspLailthinsp(environmentalthinspcoordina-tor)thinspregularlythinspexplainsthinsptothinspemployeesthinsphowthinspeveryonethinspcanthinsphelpthinspthethinspenvironmentthinspbythinspreusingthinspmaterialsthinspandthinspbythinspseparatingthinspandthinspreducingthinspwastethinspldquoChangingthinspourthinspprinterthinspsettingsthinspforthinspexamplethinspwasthinsponethinspsmallthinspstepthinspthatthinspsavesthinspathinsplotthinspofthinsppaperthinspandthinspcostsrdquothinspshethinspex-plainsthinspldquoAtthinspourthinspPortlandthinspsitethinspwethinspnowthinspautomati-callythinspcopythinsporthinspprintthinspeachthinspsheetthinsptwo-sidedthinspforthinspthethinspmajoritythinspofthinspourthinspcopyingthinsporthinspprintingrdquothinspSuchthinspsteadythinspcommitmentthinspisthinspbearingthinspfruitthinspndashthinspthethinsprecyclingthinspratethinsprosethinspfromthinsp60thinsptothinsp85thinsppercentthinspbetweenthinsp2005thinspandthinsp2010

RecycleshyAtshyWork Certification 2009 to 2010 thinsp Siltronic Corp thinsp City of Portland Oregon thinsp

Pollution Control Award 2009 and 2010 thinsp Siltronic Corp thinsp City of Portland Oregon thinsp

Wildlife at WorkSM Certificate 2008 to 2010 thinsp Wacker Chemical Corp thinsp The Wildlife Habitat Council

Certificate of Green Partner 2009 and 2010 thinsp Siltronic AG and thinspSiltronic Japan Corp

Sony thinsp

Nature Conservation and Biodiversity

WACKER is involved in a number of local projects to protect and promote biodiversity and nature conservation Its environmentalshyprotection efforts to conserve resources and reinstate habitat help maintain the balance of species Burghausenrsquos Site Planning unit develops stratshyegies for limiting land use

We carefully assess the impact that site expansions may have on nature and biodiversity and ndash in consultation with the authorities ndash implement environmental mitigation programs to offshyset these impacts Take the expansion of our polysilicon production facilities at Burghausen and Nuumlnchritz for example For every tree felled during construction of the new polysilicon production facility on the 94shyhectare Nuumlnchritz site we plant a new one Working with nature conservation bodies we have replanted just under 10 hectares of woodland In Leckwitz a suburb of Nuumlnchritz WACKER has landscaped 13 hectares to compensate for clearing a small birch wood

Covering 232 hectares (about the same size as Munichrsquos historic old town) our Burghausen site borders a Natura 2000 nature reserve alongside the Salzach river To check whether the operation of our facilities has any effect on this reserve we monitor our air pollution levels and had an external consultant produce an immissions register for the site The results show that emissions into the atmosphere at the site do not significantly impact the nature reserve

A group of employees at our US site in Adrian (Michigan) has set up nesting boxes for various species of bird and maintains a 24shykm nature trail The site premises also feature wildflower and butterfly gardens For its dedication to nature and wildlife conservation the Adrian team was awarded the US Wildlife Habitat Councilrsquos 2008 ldquoWildlife at WorkSMrdquo certificate which is valid for three years

PortlandrsquosthinspAward-WinningthinspRecyclingthinspProgram

EnvironmentalthinspAwardsthinsp2009thinspthinsp2010

Siltronicrsquos site at Portland (Oregon USA) is located between the Willamette River and a forshyested area of approximately 20 kmsup2 The City of Portland has divided this river region into nature conservation zones to provide restored habitats for flora and fauna Part of the Siltronic plant is located near the riverbank and is suitable as a conservation zone Siltronic therefore reached an agreement with Portland in 2010 under which Siltronic has set aside 30000 msup2 of its approximately 34shyhectare site for nature conservation The area contains a portion of Doane Creek which together with the surrounding grassland is to be restored to its original state The objective is to establish a restored wildlife corridor from the forest to the river and extend habitats for fish

WACKERthinspteamedthinspupthinspwiththinspprothinspnaturathinspElbe-Roumlderthinsp(athinspnaturethinspconservationthinspcenterthinspbasedthinspinthinspSaxony)thinsptothinspprovidethinspanthinspinterpretivethinsppanelthinspforthinspthethinspldquoLeckwitzerthinspSchanzerdquothinsphillthinspfortthinspSitethinspmanagerthinspGerdthinspKunkelthinsp(thinsprightthinsp)thinspjoinedthinspTilothinspJobstthinspdirectorthinspofthinspprothinspnaturathinsptothinspunveilthinspthethinsppanelthinspInstalledthinsponthinspthethinspElbethinspCyclethinspRoutethinspinthinspsummerthinsp2010thinspthethinsppanelthinspexplainsthinspthethinspbo-tanicalthinspgeologicalthinspandthinsphistoricalthinspimportancethinspofthinspthesethinspimpressivethinspearthworksthinsplocatedthinspnearthinspthethinsptownthinspofthinspMeissenthinspPlantsthinspsuchthinspasthinspthethinsplong-leavedthinspspeedwellthinspwoadthinspcrownthinspvetchthinspandthinspsickleweedthinspflourishthinsponthinspthisthinspdrythinspgrasslandthinsphabitatthinspasthinspdothinspmanythinspbutterfliesthinspandthinspsongbirdsthinsp

Logistics and Transport

We constantly strive to improve our processes in order to avoid unnecessary journeys and reduce emissions from essential journeys In 2010 our Logistics department introduced a new simulation system to help us analyze the flow of goods We use this system to calculate carbon dioxide emissions and determine the potential for optimizing transport routes and vehicle capacity utilization

In 2010 we transferred 715000 metric tons of finished products from our Burghausen logistics hub to our customers (2009 600000 metric tons) The number of journeys rose about 15 pershycent to just under 43000 More than 38000 truckloads (2009 35000) and 10500 overseas conshytainers (2009 9900) were required to transport our products 67 percent of our shipments are by road and 33 percent by rail (22 percent of which are then transferred to ship)

In integrated production we use byshyproducts from one plant as raw materials in neighboring facilities ndash transport by pipeline is emissionshyfree Ethylene one of our most important raw materials is piped to our Burghausen site from the adjacent OMV Deutschland site

Our Nuumlnchritz plant obtains cartridges for silicones from a packaging manufacturer in nearby Groszligenhain Burghausen procures all reusable IBCs (intermediate bulk containers) drums and pallets from regional suppliers Both our Nuumlnchritzshybased cartridge supplier and the supplier of IBCs in Burghausen have conveniently relocated close to our plants to reduce journey times

Nature Conservation Center ldquopro natura Elbe-Roumlder e Vrdquo ( German- language link only )wwwnsz-pro-naturade

RarethinspHabitatthinspandthinspNaturalthinspTreasurethinspldquoLeckwitzerthinspSchanzerdquothinspHillthinspFort

WACKERrsquos sites outside Germany too procure mainly from regional suppliers to shorten transport distances We opened new facilities in China in 2009 and 2010 and have managed to avoid transporting raw materials to them from Germany and the USA thanks to our inteshygrated production system With the new plants our products are close to our Chinese cusshytomers allowing us to reduce intercontinental transportation

Until 2008 the external warehouses serving our Burghausen site had been spread over a wide area We have since relocated to a central warehouse just under 3 kilometers from our site As a result the distance covered by truck fell by almost 98 percent in 2009 and 2010 ndash from around 340000 to just 10000 freight kilometers for the same number of trips We use electronic systems to organize inshyplant transportation such that routes are short and wasted empty space is avoided Our InshyPlant Transportation unit is currently investigating alternative transshyport systems that generate fewer emissions We monitor the noise emitted from our vehicles as well as the amount of carbon dioxide

We exchange electronic data with our shipping agents so that they can plan their trips as efficiently as possible and ensure their vehicles are always fully loaded Plus we launched a strategy back in 1996 to help avoid empty runs by focusing on regional shipping agents It enables a shipper responsible for a particular postal code area to plan return journeys in his region so that trucks are almost never partially laden Our annual assessment of shipping agents extends to their environmental performance For example we ask how their vehicles are rated in European emission standards (such as the Euro 5 exhaust emission standard) The number of Euro 5 compliant vehicles has increased from just under 8 percent in 2006 to over 70 percent in 2010 (equivalent to just under 2000 trucks)

WACKER has grown significantly in recent years This is particularly true of production operashytions at our Burghausen and Nuumlnchritz sites They rely on good logistics not least to minishymize the impact on the general public In fall 2010 work started on a bypass at our Nuumlnchritz site to relieve congestion for residents in the nearby village of Roda Around 2 kilometers of the 26shykilometer road has been constructed from scratch The work is expected to be comshyplete by late 2011

Wherever possible we are switching from road to rail transport Even today most of the freight containers leaving our German sites to North Sea ports are transported by rail In 2009 WACKERrsquos 600shymeter long container train which travels daily from Burghausen to Bremerhaven and Hamburg celebrated its 10th anniversary In Burghausen we now transport almost 100 percent of such container shipments by rail which means that over 11000 freight containshyers a year no longer travel to ports by road Running at virtually 100shypercent capacity it is one of the most efficiently used container trains in the industry Deutsche Bahn AG began replacing its diesel locomotives with a new class in 2010 These new locomotives comply with current emission standards and are so powerful that one alone is sufficient to pull the entire container train (two were required previously)

67thinsppercentthinspofthinspourthinspshipmentsthinsparethinspbythinsptruckthinspandthinsp33thinsppercentthinspbythinsprailthinspndashthinsp22thinsppercentthinspofthinspwhichthinsparethinspthenthinsptransferredthinsptothinspshipthinspMostthinspofthinspthethinspfreightthinspcontain-ersthinspleavingthinspourthinspGermanthinspsitesthinspreachthinspnorthernthinspthinspportsthinspviathinsprailthinsp

The German Chemical Industry Association (VCI) has issued guidelines for determining the carbon dioxide emissions associated with logistics operations We use these to monitor our journeys In 2009 alone rail freight from Burghausen to the MunichshyRiem handling terminal saved around 700 metric tons of carbon dioxide compared with road freight Our container trains between Bremerhaven Hamburg and BurghausenNuumlnchritz replace around 18000 road journeys a year As a result we reduced our carbon dioxide equivalent by around 1600 metric tons in 2010

Our Nuumlnchritz plant also transports containers by rail to northern ports Located on the Elbe river the site transports freight via inland waterways as well which produces low emissions Most of the raw materials delivered to our Cologne plant are transported by inland waterways along the Rhine

When we procure raw materials they are transported chiefly by rail Over shorter distances however truck transport is still more costshyeffective and thus indispensable

WACKER supports the planning of a new public handling terminal for intermodal freight transshyport in Burghausen The aim of this logistics hub is to transfer freight transport from road to rail wherever possible We have calculated that one extra freight train a week in addition to the five trains currently traveling from Burghausen to the northern ports is enough to transfer around 2500 truckloads to rail The planning approval procedure for the handling terminal was started in early 2011 the terminal could be operational by 2013 at the earliest Prompted by these plans we are designing a new freight gate at the Burghausen sitersquos northern end The gate will improve traffic flow and eliminate the nuisance of heavy freight traffic to resishydents It is expected to be ready at the same time as the intermodal terminal Intermodal logistics involves shipping freight in containers using multiple modes of transport In this case freight is transported locally by road and then transferred to rail

Expansion of the A 94 Munich to Passau autobahn ndash eagerly anticipated by the ChemDelta Bavaria association of companies ndash is expected to progress well over the coming years In spring 2009 work started on the section between Forstinning and Pastetten (distance 6 km) which is scheduled for completion by late 2011 In August 2009 work began on the 43shykm Ampfing to Heldenstein section due to be finished by late 2012 The only stretches between Munich and ChemDelta Bavaria that still need to be built run from Pastetten to Dorfen (174 km) and Dorfen to Heldenstein (149 km) Completion of the autobahn would not only improve the transport infrastructure but also relieve congestion in villages and towns along the B12 highshyway and thus reduce the risk of accidents on this heavily used stretch of road

The ChemDelta Bavariarsquos second major infrastructure project is the electrification of the rail route to Munich and its expansion to two tracks This project is making progress too The 8shykm Ampfing to Muumlhldorf section opened in December 2010 However the section between Muumlhldorf and Tuumlszligling where three rail lines meet is still a bottleneck around 1 percent of German freight traffic passes over these tracks This part of the project funded by German Economic Stimulus Packages I and II is currently awaiting planning approval Construction of the twinshytrack Ehring railroad bridge over the Inn river also funded by the stimulus packshyage will be finished at some point in 2011 It is hoped that this congested section of the track will finally be completed in spring 2016

EthylenethinspPipelinethinspSouththinspThe Ethylene Pipeline South (EPS) will provide the infrastructure needed for safely and ecoshynomically transporting ethylene between major southern German chemical sites The pipeline is to run west from Muumlnchsmuumlnster in Bavaria across BadenshyWuumlrttemberg to Ludwigs hafen in RhinelandshyPalatinate In Bavaria ethylene is produced in Burghausen (OMV Deutschland) and Muumlnchsmuumlnster (Ruhr Oel)

German Chemical Industry Association ( VCI )wwwvcide

VCI policy document ldquoReducing emissions in logistics operations in the chemical industryrdquo ( available in German only )

VCI guidelines to determine CO2 emissions in logistics operations in the chemical industry ( available in Ger-man only )

Ethylene is processed at sites in Burghausen (Borealis WACKER) BurgkirchenshyGendorf (Clariant Vinnolit) and Muumlnchsmuumlnster (LyondellBasell ) The companies involved in conshystructing the pipeline have seized the initiative in a bid to maintain ChemDelta Bavariarsquos competitive advantage and to safeguard jobs

Ethylene can be transported emissionshyfree by pipeline and with very low energy costs Once the construction work is complete the pipeline will be virtually invisible and have no adverse affect on the landscape Pipelines may not be laid in protected areas where drinking water is abstracted or mineral springs are located and may only be laid in significant water manageshyment areas if special safety precautions are put in place

In 2010 BadenshyWuumlrttembergrsquos Higher Administrative Court in Mannheim overruled a local farmerrsquos objection to the construction of the EPS As there are no safety concerns regarding the pipeline route the contract under public law between EPS and the state of BadenshyWuumlrtshytemberg is now effective Despite further objections from four residents the pipeline is expected to be operational by late 2011early 2012

ChemDelta Bavariawwwchemdelta-bavariade

Ethylene Pipeline South ( EPS German-language link only )wwweps-pipelinede

Product Safety and Product Stewardship

ChristinathinspBauerRampDthinspLabthinspTechnicianthinspBurghausenthinspPlant

ldquoProduct safety has to begin right here at the RampD stagerdquo

Goals and Outlook

REACHBy June 2013 we will have submitted 66 registration dossiers for substances proshyduced in annual quantities of between 100 and 1000 metric tons to the ECHA ( Euroshypean Chemicals Agency ) We are currently preparing a further 190 substance dosshysiers for the third stage of REACH which runs until 2018 We will continue to implement REACH legislation even beyond that date For example new substances will have to be registered In addition we will have to update existing dossiers if the annual production of a particular substance exceeds the current threshold if our customers use substances for new purposes if new findings come to light about a substance or if the European Commission amends the detailed provishysions of REACH As the 2013 to 2018 REACH stages approach our Procurement deshypartment will be asking our suppliers whether the substances and mixtures supshyplied to us will meet the deadlines for ECHA registration

PolysiliconthinspProductionWACKER is substantially expanding its production capacity for hyperpure polyshysilicon to meet increasing demand from the photovoltaics industry and to support the switch to renewable energy sources We are expanding capacity at Burgshyhausen from todayrsquos 32000 metric tons per year to around 37000 Our Nuumlnchritz sitersquos Poly 9 expansion stage which comes on stream in 2011 will see annual capacity there rise to 15000 metric tons The initial output from these expansion measures is expected to be available by 2012 Whatrsquos more we are building a new polysilicon production facility in Cleveland ( Tennessee USA ) with an annual capacity of 15000 metric tons Completion is scheduled for the end of 2013 This means that WACKERrsquos total capacity for hyperpure polysilicon will increase to 67000 metric tons per year by 2014

Eco-EfficiencythinspAnalysisWACKER will continue refining its ecoshyefficiency analysis as a standard tool groupshywide We will use it to assess how sustainable our key product lines are

Evaluatethinspsubstancethinspsafetythinspandthinspregisterthinspsub-stancesthinspgtthinsp1000thinspmetricthinsptonsthinspathinspyearthinspasthinsppartthinspofthinspREACHthinspeffortsCorporate entity GroupwideDeadline 2010Implementation status Goal achieved We have submitted 85 registration dossiers to the ECHA Chemical Safety Assessments ( CSAs ) have been conducted and Chemical Safety Reports ( CSRs ) prepared and submitted to the ECHA together with the dossiers

ImplementthinspthethinspEuropeanthinspregulationthinsponthinspthethinspGlob-allythinspHarmonizedthinspSystemthinspofthinspClassificationthinspandthinspLabelingthinspofthinspChemicalsthinsp(GHS)Corporate entity GroupwideDeadline 2010Implementation status Goal achieved In the first instance GHS reclassification relates to individual substances the deadline for the classification of mixtures is June 1 2015

Submitthinsp66thinspregistrationthinspdossiersthinsptothinspthethinspECHAthinspforthinspsubstancesthinspbetweenthinsp100thinspandthinsp1000thinspmetricthinsptonsthinspathinspyearCorporate entity GroupwideDeadline 2013

NewthinspGoal

Outlookthinsp

Product Safety

WACKER is continually working to prevent and reduce the use of substances which are harmshyful to human health or the environment in products and processes We pursue this aim in a number of ways

We try to replace harmful constituents with alternative substances In the absence of an alternative we restrict the sale of products containing harmful substances to commercial and industrial customers wherever possible

We develop innovative alternatives to conventional products containing harmful substances

ProductthinspInformationWe ensure that all our products if used correctly pose no risk to health or the environment We continually update our product information and constantly revise our risk assessments to take account of new findings

When advertising our products and services we make sure that our brochures for example contain verifiable data and precise legallyshycompliant terminology and wording that reflect the current state of scientific knowledge In 2010 WACKER POLYMERS issued ldquoantishygreenwashrdquo guidelines that stress the importance of publishing sound factually correct information about products and services

Only some 40 percent of WACKER products require safety data sheets by law We compile these sheets for all chemical and biochemical sales products and issue over 54000 data sheets in up to 33 languages

WACKER publishes a wide range of information to ensure that substances and mixtures are handled correctly

Designations of substances and mixtures Potential risks Composition and information about ingredients Firstshyaid measures Fireshyfighting measures Response in the event of accidental release Handling and storage Restriction and monitoring of exposure personal protective equipment Physical and chemical properties Stability and reactivity Toxicological data Environmental data Notes on disposal Transportation guidelines Legislation and other information

NanomaterialsthinspWe have recorded and assessed all the nanomaterials that we produce or use Most of them are nanostructured ndash a classification that includes materials whose internal structures are nanoscale (between 1 and 100 nanometers) but whose dimensions are greater than the nano range WACKERrsquos principal nanostructured products include HDKreg pyrogenic silica a powder used as a thickener filler or flow enhancer The physicochemical properties of the HDKreg product group have been examined in detail and extensive toxicological ecoshytoxicological and epidemiological data exist

In a joint project with the Technical University of Dresden WACKER used new analytical techshyniques to measure workplace nanoparticle concentrations and sizes at our HDKreg production facility in Nuumlnchritz The test results show that nanoparticle exposure does not increase during the bagging of nanostructured HDKreg It thus follows that employees engaged in this activity face no adverse health effects

REACHREACH legislation which came into force in 2007 governs the registration evaluation authorishyzation and restriction of chemicals within the European Union Comprehensive data are gathered through REACH which imposes new requirements on the manufacturers importers and users of chemical products On the European market all substances used or imported in annual quantities exceeding one metric ton must be registered and evaluated The scope of evaluation work is largely determined by the quantity of material produced or imported and the expected risks Particularly highshyrisk substances are subject to regulatory approval

For the chemical industry the new legislation involves considerable effort and expense WACKER estimates that REACH compliance will cost the company around euro30 million We have been preparing for REACH requirements since the EU Commission issued its white paper on chemicals policy in 2001 Our first step on the long journey toward REACH registration was to preregister phaseshyin substances produced in annual quantities exceeding one metric ton We did this by the end of 2008 thus meeting the deadline This step chiefly included substances listed in the European Inventory of Existing Commercial Chemical Substances (EINECS) We preregistered over 7000 substances with the European Chemicals Agency (ECHA)

WACKER submitted its first registration dossier to the ECHA in 2009 In the following year we successfully completed the first phase of substance registration in accordance with REACH requirements The ECHA confirmed receipt of 85 dossiers and issued registration numbers for all the substances WACKER is now entitled to produce these substances within the Euroshypean Union without restriction and to supply them to EU member states

In 2007 our Procurement department began asking our suppliers whether they have met the deadline for preregistering their substances and mixtures with the ECHA We obtained inforshymation about our suppliersrsquo registration status in May and November 2010

REACH demands extensive information about the properties of chemical products ndash which necessitates an increase in mandatory animal testing WACKER makes every effort to avoid such testing and only performs ECHAshyrequired tests Whenever possible we use recognized alternative methods such as inshyvitro tests We classify substances with the same modes of action into groups for testing and we work within REACH consortia to use scientific data from other companies on identical substances

1 New substances gt 1 metric ton year2 Phase-in substances gt 1 metric ton year3 R50 53 substances ldquohighly toxic to aquatic organismsrdquo and ldquomay have long-term harmful effects in bodies of waterrdquo4 CMR substances carcinogenic mutagenic or toxic to reproduction5 Phase-in substances predominantly old substances listed on the EINECS inventory (European Inventory of Existing Commercial Chemical Substances on the market before 1981)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

thinsp thinsp thinsp thinsp

R50 53 substances 3 ( gt 100 t a )

CMR substances 4 ( gt 1 t a )

Phaseshyin substances 5

( gt 1000 t a )

( 100 ndash1000 t a )

Phaseshyinsubstances 5

( 1ndash100 t a )

REACHthinspTimetable

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

GHSthinspGHS (Globally Harmonized System of Classification and Labeling of Chemicals) is a United Nations initiative for harmonizing the classification and labeling of hazardous substances It is up to individual countries to decide whether to adopt the system and if so when and how to go about it

The EU Commission introduced GHS in Europe when the European Regulation on the Classifishycation Labeling and Packaging of Substances and Mixtures (the CLP Regulation) came into force in January 2009 On December 1 2010 this new regulation replaced the existing direcshytive on the classification and labeling of chemicals (Dangerous Substances Directive) and from June 2015 it will also replace the Dangerous Preparations Directive

WACKER met the yearshyend 2010 deadline for reclassifying all individual substances Furthershymore we registered our substances in the EU Classification and Labeling Inventory by January 2011 We started adapting our safety data sheets to meet international GHS requirements back in 2007 and are continuing this process in line with the GHS implementation deadlines set for the countries to which we supply products In 2010 we reclassified and labeled subshystances destined for Korea Japan and Singapore according to GHS criteria

EuropeanthinspUnionrsquosthinspGHSthinspTimetable

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

Classification in thinspsafety data sheet

GHS labeling thinsp

Mixturesthinsp

Classification in thinspsafety data sheetthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Dangerous Substances

Directive

Dangerous Preparations

Directive

Transitional period

GHS implementation will cost WACKER around euro3 million For us this system switchover means that every product must be checked reclassified and relabeled Within just a few years we must reclassify tens of thousands of substances and mixtures change all safety data sheets and redesign hazardous substance labels to take account of the new symbols

Country Economic Region Change of Safety Data Sheets Change of Labels Substances Mixtures

Brazil thinsp February 2011 thinspJune 2015

February 2011 thinspJune 2015

Substances thinspMixtures

China thinsp May 2011 thinsp May 2011 thinsp Substances and Mixtures thinsp

European Union ( EU ) thinsp December 2010 thinspJune 2015

December 2010 thinspJune 2015

European Economic Area thinsp( EEA states Iceland Liechshytenstein and Norway )

June 2015 thinsp June 2015 thinsp Substances and Mixtures thinsp

Indonesia thinsp September 2010 thinspJanuary 2014

September 2010 thinspJanuary 2014

Japan thinsp January 2011 thinsp December 2006 thinsp 100 Special Substances thinsp

Malaysia thinsp June 2011 thinspJune 2013

June 2011 thinspJune 2013

New Zealand thinsp July 2008 thinsp January 2011 thinsp Substances and Mixtures thinsp

Switzerland thinsp December 2012 thinspJune 2015

Serbia thinsp September 2011 thinspJune 2015

September 2011 thinspJune 2015

Singapore thinsp December 2010 thinspDecember 2012

December 2010 thinspDecember 2012

South Korea thinsp July 2010 thinspJuly 2013

July 2010 thinspJuly 2013

Taiwan thinsp January 2009 thinsp January 2009 thinsp Substances and Mixtures thinsp

Uruguay thinsp July 2010 thinsp July 2010 thinsp Substances and Mixtures thinsp

GHS affects any employee involved with hazardous substances It impacts not only producshytion and laboratory workers (who handle GHSshylabeled chemicals on a daily basis) but also safety officers (who prepare SOPs) Furthermore employees who label vessels piping and equipment have to know and be fully sensitized to the new hazard symbols WACKER proshyvides its employees with online training and a wide range of informative literature on GHS

Oldthinsphazardousthinspsubstancethinspsymbolsthinspvalidthinspuntilthinsp2015

Newthinsphazardousthinspsubstancethinspsymbolsthinspvalidthinspsincethinsp2010

Gases under pressure

May cause lasting skin or eye

damage

ExplosiveFlammableDangerous to animal health and the environment

May cause fatal poisoning

Risk of serious health effects

May cause irritation or allergy

The GHS Regulation on the Classification and Labeling of Chemicals replaces the previous orange hazard symbols with new symbols consisting of a white diamond in a red frame

IntroductionthinspofthinspGHS

OverviewthinspofthinspHazardthinspSymbols

Product Stewardship

ResearchthinspandthinspDevelopmentOur researchers and developers focus on finding solutions to customer needs and respondshying to global concerns such as rising energy consumption depletion of raw materials urbanshyization digitization and demographic change WACKER is a researchshyintensive chemical comshypany In 2010 our RampD rate ndash research and development spending as a percentage of Group sales ndash was 35 percent (2009 44 percent) The decline can be explained by our strong sales growth in 2010

As well as developing new products and processes our RampD scientists continually strive to improve our production processes They look for ways to reduce the use of raw materials and energy while at the same time increasing yields They are also involved in testing the use of renewable raw materials such as starch and straw For every research project we conshysider sustainability issues document them via our groupwide project management system and incorporate them into our project appraisals

WACKER conducts RampD at two levels centrally at our Corporate Research amp Development department and decentrally at our business divisions Corporate RampD coordinates activities across the Group in consultation with the Executive Board Our business divisions conduct applicationshydriven RampD focusing on

Semiconductor technology (silicon wafers for semiconductor chips) Silicone chemistry (silicone products e g for the construction automotive electrical electronic textiles cosmetics and medical sectors)

Polymer chemistry (dispersible polymer powders and polymeric binders used e g in the construction and automotive industries)

Biotechnology (fine chemicals and pharmaceutical intermediates) New techniques for manufacturing hyperpure polysilicon (raw materials for the semishyconductor and solar industries)

WACKER scientists are currently working on around 220 research themes based on 40 technolshyogy platforms Our RampD activities are supported by a global network of 20 WACKER technical centers which liaise between customers sales offices and local production sites At these centers our specialists customize products to regional requirements taking account of for example climate national standards and local raw materials

We collaborate with customers scientific institutes and universities to achieve rapid and effecshytive research progress 2010 saw WACKER cooperating with more than 30 research institutes in Europe and America on around 50 research projects Areas of collaborative research that complement our own activities include white biotechnology energy generation (photovoltaics and wind) energy storage (lithiumshyion batteries) and 450 mm wafers

ResearchthinspalongthinspthethinspSupplythinspChainWACKER takes environmental health and safety criteria into account at every stage of the prodshyuct life cycle ndash starting with the raw materials We try to minimize rawshymaterial consumption while selecting materials which offer maximum ecological benefit In the reporting period we significantly reduced polymershyproduction emissions by optimizing our process for the recovshyery of vinyl acetate As a result we have reduced our consumption of this starting material

OurthinspResearchersthinspLookthinspforthinspWaysthinsptothinspReducethinspthethinspUsethinspofthinspRawthinspMaterialsthinspandthinspEnergy

Indeed WACKER continually strives to optimize its processes ndash their efficiency environmental aspects energy consumption and costs During the reporting period our WACKER SILICONES division significantly increased productionshyprocess efficiency thanks to new catalysts This enabled us for example to simplify the silane manufacturing process reduce process steps and save energy Whatrsquos more we cut waste generation by as much as 80 percent

LifethinspCyclethinspAssessmentsIn 2010 WACKER POLYMERS prepared life cycle assessments for VINNAPASreg VINNEXreg and ETONISreg dispersible polymer powders and dispersions as well as for other important intermediates in order to analyze the environmental impact of all its key product groups Our life cycle asshysessments consider the environmental factors associated with a product from the initial stage of producing the starting materials to the factory gate (cradleshytoshygate approach) These analyses enable us to make a detailed assessment of the sustainability of our products and manufacturing processes and to improve them

ResearchthinspintothinspMegatrendsOur RampD activities focus on energy automotive biotech and construction megatrends On the energy front for example we are continuing to develop technologies for converting and storing energy At present we are investigating materials suitable for lithiumshyion batteries and fuel cells These can be used in cars or as a source of energy in the home WACKER is a member of the National Platform for Electric Mobility a joint German government and industry initiative which aims to have at least 1 million electric vehicles on Germanyrsquos roads by 2020

In photovoltaics we are strengthening our technological lead in polysilicon production Our aim is to improve our silicon deposition process and to enhance our closed production loop which ranges from silicon metal through hyperpure solar and electronicsshygrade silicon to silicones and pyrogenic silica

In 2010 WACKER produced over 30000 metric tons of hyperpure polysilicon making us one of the worldrsquos largest polysilicon manufacturers 2010 also saw the official startshyup of polysilicon expansion stage 8 at Burghausen Currently we are involved in two major projects polyshysilicon expansion stage 9 at Nuumlnchritz and the construction of a polysilicon facility in the US state of Tennessee

We have further reduced the energy consumed by our polysilicon facilities The energy payshyback time ndash the time taken for a photovoltaic cell to generate the energy used in its producshytion ndash has become even shorter Depending on the geographical location of the solar cells this payback time now ranges from 6 months (in the Sahara) to 18 months (in Northern Europe) In many regions (including Germany) solar power now costs less than grid power and its generation is increasingly independent of political incentives

Some of our research projects are government funded

2010 saw our semiconductor division ndash Siltronic ndash complete a basic research project (SIGMADT) on siliconshybased starting materials for threeshydimensional transistors The projshyectrsquos objective was to optimally adapt the properties of silicon wafers to threeshy dimen sional transistors As integration density continues to increase it will become even more diffishycult to make electronic components for complex applications (such as navigation sysshytems or computer tomography equipment) on just one plane The transition to the third dimension opens the way to increased efficiency and reduced energy consumption To meet this challenge it is absolutely essential to improve wafer quality Germanyrsquos Federal Ministry of Education and Research (BMBF) provided a euro3 million grant to fund this project for 30 months

Semiconductor manufacturers are calling for the 450 mm diameter wafer which is exshypected to increase productivity and curb costs Siltronic is developing key processes for manufacturing 450 mm wafers and is involved in EEMI450 (European Equipment ampMaterials Initiative for 450 mm) a collaborative EUshyfunded research project Siltronic AG will receive funding of around euro1 million for a period of 21 months ending in February 2012

Germanyrsquos joint SPINEL project is devoted to boosting the energy efficiency of photovolshytaic and electronic applications through innovative electronicsshygrade base material As a result the project also aims to make a substantial contribution to enhancing the energy yield of future energy systems This objective is entirely in line with the German governshymentrsquos energy policy on the conservation of fossil fuels and climate protection and with the BMBFrsquos funding policy to increase the efficiency of renewable energy sources (based on its Basic Energy Research 2020+ strategy) SPINEL is researching a novel crystalshypulling method which operates without the use of a crucible It uses granular silicon which is much easier to process than rodshyshaped polysilicon Wacker Chemie AG and Siltronic AG have teamed up for this joint project The BMBF has awarded Siltronic euro18 million to fund its subproject ndash ldquoEstablishing a continuous crucibleshyfree single crystalshypulling methodrdquo ndash for a period of 27 months until August 2011

In the SuperPowerMOS joint project (energy efficient powershysupply components for a voltage range of up to 400 V) the Fraunhofer Institute for Silicon Technology (ISIT) Danfoss Silicon Power GmbH Siltronic AG and Vishay Siliconix Itzehoe GmbH have teamed up to develop innovative PowerMOS components for devices in the voltage range of up to 400 V Heavily doped substrates are of particular interest as a starting material The BMBF is providing funding of around euro657000 for Siltronicrsquos subproject ndash ldquoUltrashydoped substrates for novel lowshyvoltage PowerMOS componentsrdquo ndash for a period of 39 months until May 2011

In a joint project called DECISIF (DEvice and CIrcuit performance boosted through SIlicon material Fabrication) partners from science and industry are researching the capabilities of ldquostrainedrdquo silicon The aim is to enable a faster and more energyshyefficient manufacshyturing of electronic devices such as notebooks cellphones and MP3 players The BMBF has awarded the project an euro81 million grant Of this Siltronic will receive around euro12 milshylion to finance its part of the project from August 2008 until July 2011 Project partners Siltronic AG GLOBALFOUNDRIES Dresden AIXTRON AG the Juumllich Research Center and the Max Planck Institute of Microstructure Physics are contributing a further euro64 million Mechanical straining expands the crystal lattice of the silicon which changes its elecshytronic properties This enables the charge carriers to flow more quickly through the transistor as well as permitting switching frequency to increase and power consumption to decrease

Our biotech specialists are developing new methods for producing ethylene and acetic acid from renewable raw materials Acetic acid and ethylene are the precursors of vinyl acetate This substance is processed by our WACKER POLYMERS division to make disshypersible polymer powders and polymeric binders In 2009 we succeeded for the first time in producing acetic acid to metric tonshyscale from bioethanol In another project we are working to produce acetic acid and ethylene from biomass (e g straw) The BMBF is supporting this project as part of its BioIndustry 2021 funding initiative

European 450 mm Equip-ment amp Materials Initiative ( EEMI 450 )wwweemi450org

BioIndustry 2021 ndash German Clusters in Joint Action for Industrial Biotechnologybioindustrie2021eu

SustainablethinspProductsWACKER products are intended for the manufacturing industry (where they are further proshycessed) rather than for end users Our customers want us to produce their raw materials in a sustainable way Plus they expect their products to pose no risks to health or the environshyment WACKERrsquos principle is to provide highshyquality products that can be manufactured transported used and disposed of safely and with minimum environmental impact Over the last two years WACKER has developed diverse products that promote sustainability

AutomotiveA new silicone adhesive for plastic oil pans reduces the weight of a car and so cuts fuel conshysumption ELASTOSILreg 76540 A B is an extremely robust silicone elastomer even when imshymersed in organic liquids (such as engine oil) at over 100 degC the silicone shows hardly any swelling and retains its mechanical strength As a sealant and adhesive it bonds reliably to plastics and metals WACKER has developed this roomshytemperatureshycuring twoshypart silicone jointly with INPRO a Berlinshybased innovation company It is suitable for a range of automoshytive applications where metals must be bonded to plastics for example in transmissions clutches and cooling circuits

ELASTOSILreg R 101 is a silicone elastomer that remains flexible even at temperatures as low as shy50 degC The rubber can also withstand high temperatures of up to 180 degC without sustaining damage With the addition of heat stabilizers it is able to endure even higher temperatures It is particularly suitable for engine bearings where it dampens engine vibrations and so reduces noise

ConstructionthinspWACKER SILICONES added the GENIOSILreg product family to its range of construction sealshyants These hybrid adhesives and sealants combine the properties of silicones and organic polymers They crosslink quickly and retain their functionality over the long term even in highly stressed areas They are free of tin and plasticizers GENIOSILreg I70 ensures particushylarly high levels of bond strength on all kinds of substrates As a result it is now possible to bond numerous items that previously had to be joined with nails and screws (e g timber slats plastic panels and metal components) The product also reliably bonds floor tiles and plasterboard

WACKER manufactures binders which incorporate natural fibers from renewable raw materials such as wood cork and scrap leather These natural fiber composites (NFCs) are recyclable energyshyefficient and can be thermoformed VINNEXreg is a brand of specialty binder powders based on vinyl acetateshyethylene (VAE) copolymers When combined with slate and cork for example it creates a natural flooring that feels warm underfoot NFCs based on recycled scrap leather can be used to manufacture coverings for furniture floors and car interiors

Renewablethinsporthinsprecyclablethinsprawthinspmaterialsthinsp(suchthinspasthinspnaturalthinspcorkthinsporthinspslate)thinspcanthinspbethinspusedthinspinthinspconjunctionthinspwiththinspVINNEXregthinsppowdersthinsptothinspmakethinspflooringthinsporthinspwallthinspcov-eringsthinspExamplethinspwafer-thinthinspflexiblethinspslate-corkthinsptilesthinspforthinspflooring

Our WACKER POLYMERS division is continuously developing its VAE copolymer dispersions for environmentally friendly lowshyemission and lowshyodor interior paints We have developed the VINNAPASreg EF 718 dispersion specially for the Chinese market The binder is free from alkylshyphenol ethoxylates (APEOs) and is low on volatile organic compounds (VOCs) The new prodshyuct responds particularly well to thickeners which reduces the amount needed ndash thereby lowering rawshymaterial consumption further

SILRESreg BS provides siliconeshybased masonry protection by for example acting as the binder in silicone resin emulsion paints and plasters SILRESreg also makes brick manufacturing more environmentally friendly The firing temperature is a key factor in determining the density and thus the quality of clay bricks The higher this temperature is the better the bricks are proshytected against moisture When bricks were sprayed with a mixture of water and SILRESreg BS 16 they became watershyrepellent even at low firing temperatures This saves energy and reduces CO2 emissions ndash a solution that is especially attractive to India (the worldrsquos largest brick manufacturer) where most brickworks still do not have access to energyshyefficient kilns

AdhesivesthinspandthinspCoatingsthinspConcern about the environment has increasingly led to the replacement of solventshybased paint systems with watershybased ones WACKER has developed SILRESreg MP 50 E for this purshypose The watershybased silicone resin emulsion complies with the requirements of the US Food and Drug Administration (FDA) and Germanyrsquos Federal Institute for Risk Assessment (BfR) The product provides a surface coating suitable for kitchen appliances cooking utensils and grills

Our researchers have developed a powdershybased modifier for engineering materials Epoxy adhesives modified with this highshyimpact product are able to withstand the severe mechanishycal stress generated in the rotor blades of wind turbines

We have expanded our range of VAE copolymer dispersions to respond to the needs of the paper and packaging industry VINNAPASreg XD 05 allows the formulation of adhesives without the use of filmshyforming agents or plasticizers The dispersion complies with the latest environmental and safety standards and is suitable for food packaging Whatrsquos more our VINNAPASreg EP 1400 and EP 441 copolymer dispersions allow adhesive manufacturers to disshypense with filmshyforming agents and plasticizers In addition these new products are free from alkylphenol ethoxylates (APEOs) and contain only minute quantities of volatile organic compounds (VOCs)

EnergythinspElectricalthinspampthinspElectronicthinspSectorsthinspLightshyemitting diodes (LEDs) are the light source of the future They produce high levels of luminosity whilst consuming just a fraction of the energy required by conventional light bulbs

InsulationthinspmaterialsthinspmustthinspbethinspprotectedthinspagainstthinspmoisturethinspTreatmentthinspwiththinspSILRESregthinspsiliconethinspprod-uctsthinspprovidesthinspeffectivethinspprotectionthinspThesethinspwater-repellentthinspsiliconesthinsppreventthinspmoisturethinspfromthinspenteringthinspthethinspinsulationthinspndashthinspasthinspcanthinspbethinspseenthinspduringthinspthethinspdripthinsptestthinsponthinspthisthinsppiecethinspofthinspmineralthinspwool

or energyshysaving lights However as LED performance increases new demands are placed on materials particularly those used in lenses Conventional materials are unable to withshystand the light flux and turn yellow Now manufacturers of highshypower LEDs are focusing on silicones which have the necessary heat resistance and light stability WACKERrsquos new silishycones sold under the LUMISILreg brand allow ndash for the very first time ndash optical lenses for LEDs to be applied directly to the lightshyemitting diode chip In 2009 we presented the developer with the Alexander Wacker Innovation Award for his work in this field

Transformers produce a lot of heat when in operation As heatshytransfer media coolants are indispensable for dissipating this energy WACKER offers siliconeshybased insulating fluids with high heat resistance for this purpose POWERSILreg Fluid TR 20 can be used to cool electrical machinery where huge amounts of heat must be dissipated rapidly The new product retains its functionality even at shy50 degC ndash which is particularly advantageous for wind turbines Whatrsquos more the new silicone is extremely resistant to oxidation giving electrical equipment a much longer service life It is also ideally suited to meeting the challenges of electrical mobility

The POWERSILreg UV range of silicone elastomers cure at room temperature by irradiation with UV light ndash which saves energy since there is no need for oven curing No fission products are released during vulcanization This technology with a proven track record in the electronics industry can now be applied to insulating materials for highshyvoltage applications Silicone elastomers are used for instance in combination with glassshyfibershyreinforced epoxy resin to manufacture longshyrod and hollow insulators Other important applications for POWERSILreg UV include cable accessories connecting parts for substations and surge arresters

SilGelreg 613 also cures in seconds at room temperature when exposed to UV light This silishycone gel is used for encapsulating electronic components e g for automotive applications solar cells and electrical appliances

ELASTOSILreg Solar 2120 UV is a UVshyactivated silicone elastomer developed for the solar industry It is ideal for encapsulating junction boxes Since the product contains no photoinitiators it leaves neither ions nor freeshyradical decomposition products in the material

We developed TECTOSILreg especially for encapsulating photovoltaic modules The plastic film comprises a silicone elastomer that can be thermoformed making it fast and easy to process It protects solar cells from mechanical and chemical stresses The film contains neither catalysts nor corrosive substances The material absorbs hardly any water at all poses an effective moisture barrier and stays permanently electrically insulating With the aid of TECTOSILreg highshyquality solar modules with a long service life can be produced

Highshyconcentration photovoltaic (HCPV) systems are an alternative to the conventional PV technology used in photovoltaic power plants HCPV systems employ special lenses that conshycentrate sunlight and focus it onto highshyperformance cells Much higher efficiencies are

TECTOSILregthinspisthinspathinspfilmthinspforthinspencapsulatingthinspphotovoltaicthinspmodulesthinspItthinspisthinspcomposedthinspofthinspathinspsiliconethinspthermoplas-ticthinspTransparentthinspandthinspnon-yellowingthinspthisthinspmaterialthinsphelpsthinspachievethinsphighthinspsolar-modulethinspefficiencythinspandthinspaffordsthinspthethinspmodulesthinsplastingthinspprotection

achieved in this way than with normal solar modules WACKER has developed ELASTOSILreg Solar 3210 specifically for these highshyperformance modules The twoshypart rubber is pourable and has very good light permeability making it suitable for the production of optical lenses and moldings (for example Fresnel lenses)

PlasticsthinspandthinspCompositesthinspOur WACKER POLYMERS division has worked with customers to develop compostable prodshyucts which combine flour or starch with VINNEXreg polymeric binders Although these polymer blends have similar properties to petroleumshybased plastics they are industrially compostashyble and biodegradable This makes them ideal for the packaging catering gardening and landscaping sectors

SILPURANreg 8630 60 can be used to manufacture molded parts and semishyfinished products that have very lowshyfriction surfaces Unlike with traditional oilshyexuding silicones no oily silicone film forms at the surface These highshypurity solid silicone rubbers are therefore particularly suitable for medical applications such as catheters and drains designed for greater patient comfort

ELASTOSILreg R plus 4366 is another rubber grade that forms a lowshyfriction surface with no oily film This makes it easier to dispense food ingredients in metering tubes for example These solid silicone rubbers comply with the food standards of the Federal German Institute for Risk Assessment (BfR) the French Arrecircteacute du 25 novembre 1992 and the US Food and Drug Administration (FDA)

ELASTOSILreg R plus 4370 bonds to plastics and metals such as aluminum or steel without the need for any special surface treatment or solvent primers These selfshyadhesive solid silicone rubbers provide an environmentally sound way of producing hardshysoft combinations for use in injection molding for example

LifethinspSciencethinspndashthinspPharmathinspIndustrythinspOur WACKER BIOSOLUTIONS division focuses on the growth areas of food pharmaceuticals and agrochemicals We have further improved our ESETECreg process for the bacterial proshyduction of pharmaceutical proteins (biologics) which has enabled us to increase our yields Some of these biologics are currently undergoing clinical trials by our customers Our pharmashyceutical actives are used in the treatment of cancer arthritis and cataracts

Our scientists have developed CAVAMAXreg W8 CURCUMIN specifically for the food sector The ringshyshaped sugar molecule (cyclodextrin) improves the solubility of the active substance curcumin in an aqueous environment This increases its bioavailability ndash in other words the extent to which curcumin is absorbed by the human body Curcumin mops up free radicals which damage body cells Additionally studies suggest that curcumin may have antishyinflamshymatory properties which could play a role in the prevention and treatment of cancer

SILPURANregthinsp2149thinspUVthinspisthinspathinspsiliconethinspadhesivethinspthatthinspwethinsphavethinspdevelopedthinspforthinspdressingsthinsptothinsppromotethinspthethinsphealingthinspofthinspwoundsthinspandthinspscarsthinspThisthinspadhesivethinspcuresthinsprapidlythinspatthinsproomthinsptemperaturethinspafterthinspbriefthinspUVthinspirradia-tionthinspEnergythinspisthinspsavedthinspbythinspnotthinsphavingthinsptothinspoven-curethinspthethinspsilicone

PaperthinspandthinspLabelsDEHESIVEreg 971 is a highly reactive silicone polymer which cures with the addition of a platinum catalyst It is used for coating release liners and labels Thanks to our productrsquos high reacshytivity just trace amounts of the platinum catalyst are enough to ensure complete curing of the silicone layer This enables paper manufacturers to cut platinum consumption by as much as 60 percent compared with conventional systems

Energy-EfficientthinspConstructionthinspThere is enormous potential for using exterior insulation and finish systems (EIFS) to sustainshyably reduce greenhouseshygas emissions Heating and airshyconditioning account for half of a buildingrsquos energy demand Inadequately insulated a house loses a large part of its energy through its exterior walls and roof EIFS can reduce heat loss by 60 percent and cut the energy lost by airshyconditioners by as much as 72 percent The German Energy Agency (dena) has calculated the savings potential that can be achieved using insulation alone While over 10000 kilowatt hours of heating energy escape through the walls of an uninsulated singleshyfamily house each year this can be reduced to just 2900 kilowatt hours if the external walls are insulated

According to dena in Germany alone only a third of all homes are adequately insulated Giving a building effective insulation based on EIFS could save 80 million metric tons of CO2 emissions a year ndash thatrsquos 10 percent of Germanyrsquos total emissions Surfaces where exterior insulation and finish systems have been used prevent 146 million metric tons of CO2 emisshysions annually which so far amounts to over 300 million metric tons

VINNAPASreg dispersible polymer powders added to the mortar ensure that the EIFS layers bond together firmly The insulation systems are therefore much more stable durable and weathershyresistant They permit the use of insulation boards comprising different materials including renewable substances such as cork and woodshywool VINNAPASreg polymer powders can be used to make construction chemicals that meet the strict EMICODEreg emissions standards set by Germanyrsquos GEV (Association for the Control of Emissions in Products for Flooring Instalshylation)

Some listed buildings and historical monuments cannot be insulated with EIFS In cases such as these a coat of silicone resin emulsion paint (SREP) is one of the few materials that imshyprove a buildingrsquos energy balance WACKER SILICONES is a leading manufacturer of silicone resin emulsions for these paints Damp walls lose heat relatively quickly whereas silicone resins protect masonry against moisture ingress A coat of highshyquality silicone resin emulshysion paint reduces heat loss from external walls by as much as 40 percent and lowers heat demand by an average of 46 percent Whatrsquos more this kind of paint improves the indoor climate by transmitting water vapor

VINNAPASregthinsppolymerthinsppowdersthinsparethinspindispensablethinspinthinspmodernthinspconstruction-sectorthinspapplicationsthinspTheythinspimprovethinspprocessingthinspandthinspoptimizethinspthethinsppropertiesthinspofthinspforthinspexamplethinsptilethinspadhesivesthinspplastersthinspandthinspself-levelingthinspcompoundsthinspPlusthinsptheythinspenhancethinspthethinspeffi-ciencythinspofthinspexteriorthinspinsulationthinspandthinspfinishthinspsystemsthinspasthinspwellthinspasthinspsealingthinspslurries

Knowledge-SharingthinspOne way we promote knowledge sharing about energyshyefficient construction techniques is by organizing seminars and technical workshops In 2010 we expanded the program offered by our international training centers and held more interdisciplinary seminars Our WACKER ACADEMY centers provide a forum for exchanging sectorshyspecific expertise between customshyers distributors and WACKER specialists Construction chemicals are the main focus and since 2010 we have complemented our polymershychemistry seminars with courses on silicone construction applications ndash as well as with courses for other branches (including cosmetics and paints) The principles of intercultural cooperation and the efficient use of eshybusiness systems round out our seminar program

WACKER ACADEMY runs centers in Burghausen Dubai Moscow Mumbai Beijing Satildeo Paulo and Singapore Proximity to our development and test laboratories facilitates the exchange of expertise and gives participants the opportunity to perform practical tests on site We collaborate with our own inshyhouse research facilities as well as with universities and instishytutes to ensure that our seminar program is always at the cutting edge

Although Chinarsquos construction boom shows no signs of letting up many of its buildings still do not yet meet international energyshyefficiency standards Heating and cooling buildings consumes a third of all Chinarsquos energy Such high energy consumption and the resulting air pollution have set alarm bells ringing in government quarters At WACKER we are committed to initiatives that make Chinarsquos municipal authorities and construction industry aware of the benefits of energyshyefficient building techniques

Since 2007 WACKER has been involved in an initiative run by the German Energy Agency (dena) and the Chinese Ministry of Construction ndash the goal being to promote energyshysaving construction methods suited to the local climate The project focuses on seminars held in major Chinese cities in different climate zones On the one hand cold regions need exterior insulation and finish systems to reduce heating costs (and cut greenhouse gas emissions) On the other hand hot regions require insulation against heat to reduce the energy requireshyments of airshyconditioning systems

WACKER additionally partnered with other international companies in 2007 to establish the ETICS (External Thermal Insulation Composite System) Quality Alliance spearheaded by the German Chamber of Commerce in Beijing The purpose of the alliance is to draw attention to exterior insulation and finish systems and establish internationally recognized quality standshyards for energyshyefficient construction WACKER organizes informative events and user workshyshops in collaboration with the Chinese authorities trade associations and inspectorates In the reporting period we promoted knowledgeshysharing regarding energyshyefficient construcshytion techniques in Beijing Shanghai and Tianjin with a program of seminars technical trainshying courses and conference presentations

OurthinspWACKERthinspACADEMYthinspIsthinspanthinspInternationalthinspForumthinspforthinspPracticalthinspTraining

Exteriorthinspinsulationthinspandthinspfinishthinspsystemsthinsp(thinspEIFSthinsp)thinspforthinspbuildingthinspinsulationthinspconsistthinspofthinspathinspmultilayeredthinspmate-rialthinspcompositethinspDispersiblethinsppolymerthinsppowdersthinspbondthinspmasonrythinspandthinspinsulatingthinspmaterialthinspfirmlythinspto-getherthinsptothinspproducethinspathinspstablethinspinsulationthinspsystemthinsp

Masonry

Construction adhesive

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

ThethinspHamburgthinspHousethinspatthinspthethinspEXPOthinsp2010thinspinthinspShanghaithinspisthinspathinspperfectthinspexamplethinspofthinspsustainablethinspconstructionthinspErectedthinspbythinspthethinspGermanthinspcitythinspofthinspHamburgthinspforthinspthethinsp2010thinspexpothinspthethinspbuildingthinspisthinspChinarsquosthinspfirstthinspcertifiedthinspldquopassivethinsphouserdquothinsptothinsptakethinsplocalthinspclimaticthinspconditionsthinspintothinspaccountthinspThanksthinsptothinspmodernthinspenergy-efficientthinsptechnologiesthinspandthinspenergy-savingthinspbuildingthinspmaterialsthinspthethinspHamburgthinspHousethinspgetsthinspbythinspwiththinspnothinspexternalthinsppowerthinspsupplythinspairthinspconditioningthinsporthinspheatingthinspWACKERrsquosthinspcontributionthinsptothinspthethinspprojectthinspwasthinsptothinspprovidethinspsilanesthinspforthinspconcretethinspprotectionthinspsiliconethinspsealantsthinspandthinspdispersiblethinsppolymerthinsppowdersthinspforthinsphigh-performancethinspdrythinspmortarsthinspForthinspexamplethinspthethinspinteriorthinspwallsthinspandthinsproofthinspsurfacesthinspofthinspthethinspHamburgthinspHousethinspwerethinsppro-tectedthinspwiththinspWACKERthinspSILRESregthinspBSthinspCregraveme CthinspThisthinspactivethinspingredientthinspstopsthinspconcretethinspandthinspreinforcedthinspconcretethinspfromthinspabsorbingthinspwaterthinsporthinsppollutantsthinspandthinspsothinsppreventsthinsprustthinspdamagethinspAllthinspmosaicthinsptilesthinspforthinspthethinspwashroomsthinspbathroomsthinspandthinspkitchensthinspwerethinspinstalledthinspusingthinsptilethinspadhesivesthinspandthinsptilethinspgroutthinspmortarthinspcontainingthinspWACKERrsquosthinspVINNAPASregthinsppolymerthinsppowdersthinspThisthinsphasthinspthethinspadvantagethinspofthinspreducingthinspraw-materialthinspconsumptionthinspandthinspdustthinsppollutionthinspduringthinspcementthinspmanu-facturethinspGroutsthinspmodifiedthinspwiththinspVINNAPASregthinsparethinspalsothinspwater-repel-lentthinspwhichthinspprolongsthinspthethinsplifetimethinspofthinspthethinspmaterialsthinsp

TrailblazingthinspPassivethinspHousethinspHamburgthinspHouse

Plant Workplace and Transport Safety

AdolfthinspTrenkerInspectionthinspEngineerthinspTechnicalthinspPlantthinspMonitoringthinspthinspBurghausenthinspPlantthinsp

ldquoI help ensure that our plants are safe for people and the environmentrdquo

Goals and Outlook

ExpansionthinspofthinspthethinspPlantthinspFirethinspDepartmentthinspatthinspthethinspNuumlnchritzthinspSiteThe site will be expanding its firefighting capacity in parallel with the expansion of polysilicon plant 9 The fire departmentrsquos equipment will be expanded in 2011 ( including the purchase of a new ultramodern turboshyextinguisher ) and personnel will be reinforced with new fullshytime fire fighters

WACKERthinspSafetythinspPlusWe will introduce a new groupwide safety program designed to lower our accident frequency

Goalthinsp2007thinspthinsp2008

Reducethinspaccidentthinspratethinsp(thinspnumberthinspofthinspaccidentsthinspthinspwiththinsplostthinspworkdaysthinspforthinspeverythinsponethinspmillionthinsphoursthinspworkedthinsp)thinspfromthinsp38thinsptothinsp19thinsp(thinspreferencedthinsptothinsp2007thinsp)Corporate entity GroupDeadline 2011Implementation status 40 workplace accidents were reported groupwide per 1 million hours worked in 2009 That figure rose in 2010 to 43 workplace accidents At WACKER our accident rate is fueling efforts to continue improving workplace safety These efforts include the new WACKER Safety Plus program initiated in 2010

Reducethinspaccidentthinspratethinsp(thinspnumberthinspofthinspaccidentsthinspwiththinsplostthinspworkdaysthinspforthinspeverythinsponethinspmillionthinsphoursthinspworkedthinsp)thinspfromthinsp43thinsptothinsp20thinsp(thinspreferencedthinsptothinsp2010thinsp)Corporate entity GroupDeadline 2015

NewthinspGoal

Outlookthinsp

WACKERrsquos aim when it designs plants and processes is to ensure that they pose no risk to people or the environment We consequently make safety management a comprehensive groupwide undertaking Our systematic approach to workplace safety includes performing regular risk assessments and monitoring work areas

Prevention

RiskthinspManagementIn order to ensure safe production conditions we analyze the risks posed by our plants ndash from the early design phase to startshyup We analyze plant risk in two stages First we conshyduct a dangershyscope analysis where we simulate a potential damaging event such as a fire or substance spill investigating possible causes and adopting preventive measures Second we examine critical plant components for potential error sources and then create a risk matrix comprised of the following assessment criteria impact likelihood that individuals will be present in the risk area likelihood that the event in question will occur and options for eliminating the hazard in a timely manner We use a matrix to classify risks and take approshypriate precautions

In 2010 as part of our ANSIKO 2010 project we randomly reviewed the safety plans of all proshyduction plants that might be especially hazardous One focus was on facilities with a dustshyexplosion risk That review was prompted by a dust explosion at Burghausen in 2009 While property had been damaged (costing some euro05 million) no harm was done to people or the environment

WACKER also established the Loss Control Team during the period under review Composed of internal fireshysafety and hazardousshyincident experts on the one hand and property insurshyance specialists on the other the Loss Control Team studies potential fire and explosion hazards as well as any other risks that might jeopardize operations at our sites The teamrsquos efforts in 2010 included audits of the Burghausen Freiberg Jena and Cologne sites in Gershymany and the Eddyville Allentown and Portland sites in the United States Other audits inshycluded those of our sites in Jandira (Brazil ) Kolkata ( India) Plzeň (Czech Republic) and Ulsan (South Korea) We have implemented appropriate measures entailed by the audit

SafetythinspTrainingthinspampthinspEmployeethinspMotivationWACKER attaches particular importance to the training of its safety experts holding regular courses on topics such as plant safety and explosion protection The program includes safety training at WACKER sites around the world by Group experts ndash in 2010 for instance they proshyvided training at Ulsan South Korea and Zhangjiagang China

But itrsquos not only our safety experts who regularly go on courses All our employees are given safety training specific to their individual work areas Thanks to eshylearning sessions employees can set their own ongoing training program Topics range from general safety guidelines for office and laboratory workers to instruction on working with respirators and

hazardous materials Integrated into each instruction module are tests that participants can use to gauge their success

WACKERrsquos responsibility for protecting its workers does not end with onshytheshyjob safety howshyever The Burghausen site for instance hosted traffic safety weeks in 2009 and 2010 giving employees the opportunity to learn about protective clothing for motorcyclists vehicle noise testing and braking and evasive maneuvers that drivers can perform at various speeds

Avoiding accidents at the workplace is the goal of the ldquoFresh Impetus for Work Safetyrdquo initiashytive launched in 2007 Despite this awareness campaign however the number of accidents resulting in lost workdays rose during the period under review with 43 workplace accidents reported throughout the Group in 2010 for every one million hours worked ndash up from 40 in 2009 and 37 in 2008 WACKER did not report any fatal workplace accidents during the reportshying period Few accidents are chemical in nature but are instead caused by tripping slipping falling and performing manual activities without due care

While its accident rate is below that for the chemical industry in Germany WACKERrsquos figures do lie above the global industry average According to data provided by Germanyrsquos BG RCI (the employersrsquo liability insurance association for raw materials and the chemical industry) 85 reportable accidents i e those resulting in more than three lost workdays were recorded at chemical companies in Germany in 2009 The International Council of Chemical Associashytions (ICCA) registered 365 accidents resulting in lost workdays for every one million hours worked in 2008 In view of this accident rate we will continue to enhance our workplace safety efforts In 2010 for instance we developed a new safety program in Germany Called WACKER Safety Plus the program will adopt safety elements that have been successfully employed by sites and subsidiaries with particularly low accident rates Examples include safety patrols analysis of near misses and group discussions with the workforce

2010 2009 2008

Accident rate reportable accidents per 1 million hours worked 1 thinsp 43 40 thinsp 37

Fatal workplace accidents thinsp ndash ndash thinsp ndash

Accidents among contract workers sup2 thinsp 7 1 thinsp 4

Number of contract workers sup2 thinsp 371 199 thinsp 66

Accident rate contract workers sup2 reportable accidents per thinsp1 million hours worked 1

88 00 thinsp 105

1 Accident rate reflects accidents leading to lost workdays 2 Working at the Burghausen site

Inthinsp2009thinspthethinspWACKERthinspGreaterthinspChinathinsp(WGC)thinspsubsidiarythinsplaunchedthinspathinspsafetythinspandthinspenvironmental-protectionthinspinitiativethinspatthinspitsthinspsitesthinspManagementthinsphighlightedthinspvariousthinspaspectsthinspdesignedthinsptothinspraisethinspemployeesrsquothinspawarenessthinspofthinsptheirthinsppersonalthinspresponsibilitiesthinspInthinspthisthinspwaythinspeachthinspemployeersquosthinspjobthinspdescriptionthinspwasthinspmodifiedthinsptothinspincludethinspthethinsptopicsthinsptargetedthinspbythinspthethinspinitiativethinspPatchesthinspbearingthinspathinspmottothinspwerethinspsewnthinspontothinspworkthinspclothingthinspandthinsponlinethinspmessagesthinspappearedthinspautomati-callythinsponthinspcomputerthinspscreensthinspafterthinspbootingthinspThesethinspmeasuresthinspensuredthinspthatthinspemployeesthinspwerethinspconstantlythinspremindedthinspofthinspsafetythinspandthinspenvironmentalthinspprotec-tionthinspldquoOurthinspemployeesthinspadoptthinspathinspcleanthinspandthinspsafethinspapproachthinsptothinspworkrdquothinspsaidthinspGuofathinspZhuthinspinthinspchargethinspofthinspthethinspenvironmentalthinspprotectionthinspandthinspsafetythinspdepartmentthinspldquoAndthinspthatrsquosthinsphowthinspthingsthinspshouldthinspstayrdquothinspThethinspinitiativethinspwasthinspathinspsuccessthinspinthinsp2009thinspWGCthinspreportedthinspjustthinsp15thinspworkplacethinspaccidentsthinspthatthinspinvolvethinspdaysthinspofthinspabsencethinspbasedthinsponthinsp1thinspmillionthinspworkthinsphoursthinspathinspyearthinsplaterthinsptherethinspwerethinspnothinspnotifiablethinspacci-dentsthinspatthinspall

WorkplacethinspAccidents

ThethinspWACKERthinspGreaterthinspChinathinspSafetythinspInitiative

PracticedthinspSafetySafetyshyconscious conduct is reflected in low accident figures Facilities without a reportable accident for sustained periods of time receive special recognition at WACKER Some of these have also been honored by institutions outside the company

In 2009 the NPCA FCST the American National Paint amp Coatings Association presented WACKER POLYMERSrsquo US operations with an award of honor for workplace safety To be considered for the award member companies had to meet certain criteria such as zero work days lost through workshyrelated accidents over a fiveshyyear period

In 2010 the South Korean government acknowledged WACKER POLYMERSrsquo excellent process safety management (PSM) at its site in Ulsan The site earned the top grade P in the annual PSM inspection conducted by the Ministry of Labor and the Korea Occupational Safety and Health Agency (KOSHA) Whatrsquos more the accident rate confirms Ulsanrsquos high safety awareshyness not a single accident has occurred since 2000

Annual Safety Award thinsp WACKER POLyMERS thinsp Calvert City site

NPCAFCST thinsp

Rated lsquoPrsquo for process thinsp safety management

WACKER POLyMERS thinspUlsan site

South Korean Ministry of Labor amp Korea thinspOccupational Safety and Health Agency

EmployeesthinspatthinspthethinspSiltronicthinspproductionthinspsitethinspinthinspHi-karithinspJapanthinspcelebratedthinsptenthinspyearsthinspwithoutthinspanthinspac-cidentthinspinthinsp2010thinspLocatedthinsponthinspthethinspsouthwestthinspcoastthinspofthinspJapanrsquosthinspmainthinspislandthinspofthinspHonshuthinspHikarithinspprothinspducesthinspsiliconthinspwafersthinspforthinspthethinspsemiconductorthinspindustrythinspandthinspmonocrystalsthinspforthinspotherthinspSiltronicthinspsitesthinspandthinspforthinspthethinspsolarthinspindustrythinspAccordingthinsptothinspthethinspofficialthinspJapanesethinspdefinitionthinspathinspcompanythinspcanthinsponlythinspbethinsprecognizedthinspasthinspaccident-freethinspforthinsptenthinspyearsthinspifthinspduringthinspthatthinsptimethinspnotthinsponethinspofthinspitsthinspemployeesthinsphasthinsplostthinspeventhinspathinspminutethinspofthinspworkthinsptimethinspduethinsptothinspinjurythinspSothinspwhatthinspisthinspthethinspsitersquosthinspsecretthinspldquoWethinspconsistentlythinspapplythinspthethinspOHSASthinspinternationalthinspoccupationalthinspsafetythinspstandardrdquothinsprevealsthinspDrthinspAtsukithinspMatsumurathinspthethinspsitethinsppresidentthinspofthinspSiltronicthinspJapanthinspldquoAndthinspwethinsplearnthinspfromthinspsmallerthinspincidentsrdquothinspAllthinspWACKERthinspsitesthinspndashthinspinthinspadditionthinsptothinspthethinspcompanyrsquosthinspinternationalthinspSiltronicthinspsitesthinspndashthinsparethinsptothinspbethinspOHSAS-certifiedthinspinthinspthethinspnextthinspfewthinspyears

ThethinspSAFEthinspStormthinspManagementthinspSystemThe period under review also saw the WACKER Burghausen site participating in a storm research project known as SAFE (SensorshyActivated Severe Storm Early Warning System) As climate change results in more frequent and more intense storms the SAFE project will make it possible to predict these storms earlier and to introduce action to avert the danger The WACKER plant was the only industrial site to participate in the project which was sponsored by the German Federal Ministry of Research By networking new environmental sensors with existing weather stations and warning systems the project created a sensor network whose data will be linked to crossshyregional data (such as from satellites) The data can then be used in a new model for precise local forecasting that will give production sites fast targetshyed weather warnings Given the results of the research project WACKER sees considerable benefit for its site from the storm warning system and will continue to run SAFE even after the trial studies have been completed

SafetythinspAwardsthinsp2009thinspthinsp2010

10thinspAccident-FreethinspYearsthinspthethinspSiltronicthinspSitethinspinthinspHikarithinspJapan

TransportthinspSafetyIn order to make certain that its products are stored and transported safely WACKER performs stringent vehicle inspections before loading materials for shipment ndash especially when those materials are hazardous If a vehicle fails inspection we continue sending it back until it passes The failure rate which has been low for many years was 30 percent in 2010 for hazshyardous material shipments in Germany WACKER audits hazardous goods shippers at least every two years

In addition to monitoring hazardous materials shipments as prescribed by law however WACKER also makes sure that nonshyhazardous materials are transported safely WACKER safety standards are often higher than the minimum requirements for shipping hazardous materials Whenever possible for instance we do not ship chlorosilanes by truck ndash we prefer rail transshyport instead using special safety rail tankers or shipping containers that meet the strictest safety standards

We regularly review aspects of transport safety with our logistics providers e g during our annual Shipping Day If deficiencies are found we agree on specific improvements and then follow up on their implementation WACKER uses inshyhouse criteria and internationally recogshynized systems such as the Safety and Quality Assessment System (SQAS) operated by the European Chemical Industry Council (CEFIC) to select logistics service providers and evalushyate their performance Our evaluation criteria include driver qualifications and training vehicle equipment and accident response Through the use of standards and specifications WACKER ensures that even the subcontractors working for our logistics providers meet the same requirements

We recorded 10 transport accidents in 2009 and 2010 This number includes accidents involvshying the delivery of our products and intermediates where we commissioned the transport Whatrsquos more the shipping companyrsquos evaluation includes incidents that do not involve hazshyardous goods as well as those that do not adversely impact people or the environment

Number of Accidents 2010 2009 2008

Road thinsp 4 5 thinsp 11

Rail thinsp 1 ndash thinsp 4

Sea thinsp ndash ndash thinsp 2

Interior waterways thinsp ndash ndash thinsp ndash

Air thinsp ndash ndash thinsp ndash

TransportthinspAccidents

WACKERthinspmonitorsthinspthethinspsecurethinsptransportthinspofthinspboththinsphazardousthinspandthinspnon-hazardousthinspgoods

Incident Management

Despite the fact that safety management at WACKER focuses on prevention incidents that impact safety cannot always be avoided For this reason we maintain a communication sysshytem known as CLICS (Closed Loop Incident Communication System) which helps us record realshytime data on incidents anywhere in the company that are relevant to the environment health and safety Employees are required to report incidents and nearshymisses on a special form and send it to a central email address Once they have been assessed and action has been taken these reports are then forwarded to other corporate entities with similar risk levels These entities thus benefit from any insights gained

Every WACKER site has its emergency response plan detailing cooperation between internal and external emergency response teams and with the authorities Once a year for example the plant fire departments in Burghausen and Nuumlnchritz conduct emergency drills coordishynated with the local fire and emergency services These drills provide a practical opportunity to rehearse a largeshyscale emergency response Afterward the exercise is analyzed to identify and eliminate any weak points 2010 was the first time that our site in Zhangjiagang China held an emergency drill in combination with a crisis communication training exercise

Not only do WACKERrsquos plant fire departments train fire departments from the surrounding areas ndash they also invite the fire departments of other companies and municipalities to WACKER sites where they can prepare their response to accidents involving hazardous waste

TUISthinspAccidentthinspAssistanceThe German chemical industry established its Transport Accident Information and Emergency Response System (TUIS) in 1982 to provide assistance in the event of chemical accidents WACKER has been involved in this network from the start Today TUIS comprises some 130 chemical companies along with their plant fire departments and specialists (chemists toxishycologists production experts etc) Public services such as fire departments police and disaster control agencies can contact TUIS for telephone consultation services or request specialized equipment or assistance from experts When accidents involving WACKER prodshyucts occur for instance our TUIS experts are available throughout the world to offer help TUIS is part of the German chemical industryrsquos contribution to the Responsible Carereg initiative

2010 2009 2008

Stagethinsp1 Expert advice by phone thinsp 31 32 thinsp 36

Stagethinsp2 Expert advice at accident scene thinsp 5 4 thinsp 3

Stagethinsp3 Technical assistance at accident scene thinsp 7 7 thinsp 5

Totalthinspthinsp 43 43 thinsp 43

WACKERthinspFirefightersrsquothinspActivitiesthinspforthinspTUIS

Accidents and Incidents

No matter how many preventive measures are taken accidents and environmentally relevant incidents can never be completely ruled out At WACKER we make sure we learn from such events to prevent their recurrence

Site Incident

thinsp

Burghausen Germany

A very small 1 amount of ethylenediamine escaped following the rupture of a nozzle on a glass column The plant fire department brought the gas cloud under control with water cannons The surrounding area was not affected

thinsp

Burghausen Germany

A small 1 amount of fatty alcohol polyglycol ether foam escaped into the Alz Canal from the stormshywater drainage system following heavy rainfall The canal system was shifted over to the containment basin Foam was visible on the Alz Canal for a short time No environmental impact

thinsp

Burghausen Germany

Sludge overflow in the wastewater treatment plant due to a sedimentation problem The monitored threshold values for suspended solids ( SS ) and chemical oxygen demand ( COD ) were temporarily exceededThe authorities tolerated the higher values until the cause could be eliminated The sludge overflow did not impair water quality

thinsp

Burghausen Germany

A small 1 amount of silane escaped from a dispensing line The plant fire department brought the resulting hydrochloric acid cloud under control with water cannons The surrounding area was not affected

thinsp

Burghausen Germany

A very small 1 amount of hydrogen chloride gas escaped when deposits reacted with water on an evaporator The plant fire department brought the gas under control 14 people with breathing difficulty were examined by the plantrsquos Health Services unit The surrounding area was not affected

thinsp

Wacker Metroark Chemicals India

Steam leak from a defective seal Two employees were injured and taken to the hospital

Site Incident

thinsp

CologneGermany

A considerable 1 amount of ethylene escaped from a leaky safety valve The surrounding neighborhoods were not affected

thinsp

Burghausen Germany

A small 1 amount of silicon dust was released due to a damaged pipe The surrounding neighborhoods were not affected

thinsp

Burghausen Germany

A small 1 amount of chlorine gas escaped from a broken connecting pipe The plant fire department brought the gas under control The surrounding area was not affected

thinsp

Burghausen Germany

Dust explosion occurred when unloading bulk materials into a conical pile The plant fire department extinguished the secondary fire The surrounding area was not affected The ANSIKO 2010 safety project was launched

thinsp

Burghausen Germany

Water entering a storage tank from which a relatively large 1 amount of acetic anhydride escaped caused pressure to build The plant fire department cooled the tank until the reaction was complete The surrounding area was affected by a slightly unpleasant odor

thinsp

Burghausen Germany

A relatively large 1 amount of catalyst escaped from a leaky valve The surrounding area was not affected

thinsp

Zhangjiagang China

A relatively large 1 amount of hydrogen chloride escaped due to a leaky system component The gas cloud was brought under control contaminated soil was removed and disposed of The surrounding area was not affected

thinsp

Burghausen Germany

A very small 1 amount of silane escaped through a leaky flange The surrounding area was not affected

1 Amounts released very small lt 10 kg small lt 100 kg relatively large lt 1000 kg considerable gt 1000 kg

GroupwidethinspSafetythinspandthinspEnvironmentallythinspRelevantthinspIncidentsthinspinthinsp2010

Employees

DanielathinspLechnerMedicalthinspAssistantthinspHealththinspServicesthinspthinspBurghausenthinspPlant

ldquoI want our employees to live healthy lives and stay fitrdquo

Goals and Outlook

ReorganizationthinspofthinspHumanthinspResourcesTo prepare for the new challenges WACKER will be facing over the next few years we reassessed our HR work in 2010 Effective January 1 2011 we reorganized Human Resources and reallocated responsibilities The new organization is based on two main components first HR support for business divisions and corshyporate departments and second strategic HR activities The latter includes pershysonnel marketing and development compensation systems and new approaches to HR work These tasks are now consolidated across the entire Group They also cover Siltronic which previously handled such issues within its own organization

HealththinspProgramsBeginning in 2011 we will establish five strategic health programs at the German sites They are intended to address the healthshyrelated risks of demographic develshyopments (thinspincluding back problems cardiovascular illnesses and psychological stressthinsp) In addition we will extend medical checkups to include managerial staff All these measures aim at maintaining our employeesrsquo health and thus their ability to work

Starting 2011 we will expand medical checkups at the German sites in order to determine the state of health of all standardshypayscale and aboveshystandardshypayshyscale employees and to provide them with individual recommendations for better health protection

DemographythinspExpandthinspage-patternthinspanalysesthinspthinspandthinspdeterminethinspthethinspneedthinspforthinspactionthinspatthinspourthinspsitesthinspoutsidethinspGermanyCorporate entity Sites outside GermanyDeadline 2010Implementation status Target was achieved in 2009 Groupwide ageshypattern analyses are available and form the basis for continuously determining the need for action

Setthinspupthinspathinspprogramthinspforthinspattractingthinsppromisingthinspyoungthinsppeoplethinsp(thinspldquoTalentthinspRelationshipthinspManagementrdquothinsp)thinspandthinspathinsppoolthinspofthinsptalentthinspforthinspfunctionsthinspcriticalthinsptothinspsuccessCorporate entity WACKER GermanyDeadline 2010Implementation status Target was partially achieved We have established a management process and measures for identifying and attractshying external talent For the implementation of the program HR has created a new department that started work at the beginning of 2011

Implementthinspgroupwidethinspstandardsthinsponthinspoccupationalthinsphealththinspandthinspsafetythinsp(thinsp13thinspareasthinspofthinspactivitythinsp)thinspcheckedthinspthroughthinspauditsCorporate entity US and Asian sitesDeadline USA 2009 Asia 2010Implementation status Target was achieved The US and Asian sites were audited No major discrepancies from Group standards were found

AllthinspWACKERthinspsitesthinsphavethinspaccessthinsptothinspqualifiedthinsphealththinspservicesthinspManagerialthinspstaffthinspandthinspemployeesthinspresponsiblethinspforthinspoccupationalthinsphealththinspissuesthinspreceivethinspspecialthinsptrainingCorporate entity GroupwideDeadline 2015

Setthinspupthinspfivethinspstrategicthinsphealththinspprogramsthinspbackthinsphealththinspcardiovascularthinsphealththinsppsychologicalthinsphealththinspergonomicsthinspdisabilitythinspmanagementthinsp(dealingthinspwiththinspemployeesthinspwiththinspoccupationalthinspdisabilities)Corporate entity WACKER GermanyDeadline 2015

NewthinspGoals

Outlookthinsp

Employees

The number of WACKER employees fell by 304 (down 19 percent) in 2009 whereas 696 new emshyployees were hired (up 45 percent) in 2010 ndash the overall headcount thus reaching a record high WACKER had 15618 employees worldwide on December 31 2009 and 16314 a year later The 2009 decline was chiefly due to the global economic downturn Employment contracts with partshytime employees were not extended only some workers on shortshyterm contracts received permanent contracts and some jobs were eliminated at Siltronic and WACKER SILICONES Reductions were achieved through natural fluctuation as well as through transshyfers of employees to other parts of the Group such as the fastshygrowing WACKER POLYSILICON division In addition we offered phasedshyearlyshyretirement plans Germanyrsquos shortshytime work option helped prevent layoffs of permanent staff

The 2010 increase was due to the speedy economic recovery which led to higher plant utilishyzation Plus we continued to expand WACKER POLYSILICON Our workforce also increased as a result of the acquisition of the Holla siliconshymetal plant in Norway (129 employees) and the South Korean silicon facility at Jincheon (40 employees) In 2010 there was hardly any need for shortshytime work

The majority of employees (about three quarters) are based in Germany the remainder abroad

2010 2009 2008

WACKERthinspGroupthinspthinsp 16314 15618 thinsp 15922

Germany thinsp 12235 11925 thinsp 12110

International (excluding Germany) thinsp 4079 3693 thinsp 3812

Percentage outside Germany thinsp 250 236 thinsp 239

New hires groupwide thinsp 1142 1130 thinsp 1324

Percentage new hires groupwide thinsp 70 72 thinsp 83

In the USA we closed down the Duncan siliconeshyemulsions site in 2010 Almost all of the 50 employees affected by the closure were able to find other jobs Some of them were offered employment at our US site in Adrian

In 2010 WACKER announced that it would also close its Kempten (Germany) site in 2011 This closure is part of the structural measures announced in 2009 Among other things these measures aim at consolidating the production of pyrogenic silica WACKER will transfer proshyduction from Kempten to the existing highshyvolume facilities at Burghausen and Nuumlnchritz thus improving their utilization For the 44 Kempten employees we negotiated a comprehenshysive redundancy plan with the employee council that will not involve any involuntary layoffs This plan took into account the employeesrsquo age as well as their marital status and seniority Older employees who wish to stop working will receive termination agreements or be offered phased early retirement Everyone else will be offered jobs at another WACKER site such as

696EmployeesthinspCamethinspthinsponthinspBoardthinspinthinsp2010

Employees

Burghausen or Nuumlnchritz WACKER will assist its employees in finding a place to live and subshysidize the moving costs For employees unable to relocate there are plans to arrange reassignshyment contracts with other Kempten companies

At Nuumlnchritz measures to open up new career prospects for 96 longshyterm unemployed were introduced in 2009 They started their training to qualify as skilled production workers and chemical technicians at the Nuumlnchritz training facility run by ASGshyNordsachsen which also provides training for WACKER About 30 of these retrainees were living on unemployment benshyefits until they were taken on full time at the Nuumlnchritz plant in 2010 where about 100 new jobs were created

In 2010 the hiring of approximately 60 temporary workers at the polysilicon site in Burg hausen led to a legal dispute between management and the employee council which was ultimately settled out of court by mutual consent The parties agreed on key items that take account of the temporary workersrsquo interests while also allowing job flexibility A new wage model was thus agreed for temporary workers at the Burghausen site It applies to Group companies who cover their cost of capital Some of the temporary workers at WACKER POLYSILICON received shortshyterm employment contracts Management and the employee council also agreed to hold further discussions on this subject These talks will concentrate on the question of how working time can be made even more flexible enabling WACKER to better respond to fluctushyating order levels

2010 2009 2008

Temporarythinspworkersthinspgroupwide thinsp 488 300 thinsp 138

Thereof Germany thinsp 374 247 thinsp 80

Thereof international (excluding Germany) thinsp 114 53 thinsp 58

Percentagethinsp1thinsptemporarythinspworkersthinspgroupwidethinspthinspthinsp 30 19 thinsp 09

Percentage temporary workers Germany thinsp 31 21 thinsp 07

Percentage temporary workers outside Germany thinsp 28 14 thinsp 15

1 Ratio of temporary workers to employees groupwide

WACKER regularly informs its staff on current internal and external developments Employees receive timely and comprehensive information on major internal changes taking into conshysideration the respective national and international information obligations

Personnel Development

WACKERrsquos economic success is chiefly due to its dedicated employees We create the right conditions for every employee to develop their abilities to the full Our training and advanceshyment programs help employees with each qualification and career step from trainee up to top manager

VocationalthinspTrainingVocational training has always been a mainstay of personnel development at WACKER Training takes place at the Burghausen Nuumlnchritz Freiberg and Munich sites in Germany

The principal facility is the Burghausen Vocational Training Center (BBiW) established by WACKER This public foundation marked its 40th anniversary in 2009 The BBiW offers not only initial and advanced training to young people but also courses for experienced staff and reshytraining measures Well known beyond the local area the center believes that its responsibilshyity extends to providing training to nonshyWACKER staff Thus some 30 partner companies were able to send 56 trainees to start their professional career at the BBiW in 2010 (2009 57)

TemporarythinspWorkersthinspthinspMadethinspupthinsp3thinsppercentthinspofthinspthinspStaffthinspinthinsp2010

TemporarythinspWorkersthinsp(thinspasthinspofthinspDecemberthinsp31thinspReportingthinspDatethinsp)

Burghausen Vocational Training Centerwwwbbiwde

BBiW courses cover 14 vocations and five work study programs to bachelor degree level The main focus is on the scientific and technical jobs typically encountered in the chemical electrical and metalworking sectors In 2010 196 young people started their training at WACKER or the BBiW (2009 201) Overall trainee numbers rose from 665 in 2009 to 682 in 2010 ndash with 589 in scientific and technical disciplines and 98 in business administration After graduating trainees have a good chance of finding a job Even in 2009 when the economic crisis hit necessitating a comprehensive savings program WACKER permanently hired the majority of suitable and interested trainees as was the case in 2010 In 2009 a total of 160 graduates were hired the 2010 figure was 133

At 53 percent both in 2009 and 2010 the ratio of trainees (ie number of trainees to Group employees in Germany) remained high The BBiWrsquos vocational training is complemented by work study programs to bachelor level business IT engineering management business administration electrical engineering and process engineering These courses involve study at a vocational education institute alternating with quarterly practical training WACKER colshylaborates here with the universities of Mannheim and Heidenheim which specialize in work study programs

The BBiWrsquos high quality of training is evidenced by all the awards won by trainees In 2009 for example the trainee Florian Fuchs received the silver medal in the Industrial Control catshyegory at the WorldSkills Competition in Calgary (Canada) He had been German champion in this discipline twice before

Morethinspthanthinspathinspfewthinsptraineesthinspscoredthinspldquoverythinspgoodrdquothinspinthinsptheirthinspfinalthinspexamthinspbutthinsponlythinsponethinspofthinspthemthinspgainedthinsp98thinsppercentthinspinthinspAutomationthinspElectronicsthinspndashthinspBernhardthinspMetzlthinspathinspWACKERthinsptraineethinspfromthinspBurghausenthinspForthinspthisthinspachievementthinsphethinspwasthinsphonoredthinspasthinspathinspldquoNationalthinspChampionthinspTraineerdquothinspatthinspthethinspGermanthinspChamberthinspofthinspIndustrythinspandthinspCommercersquosthinspDecemberthinsp2009thinspconferencethinspThethinspchamberrsquosthinspfinalthinspexamsthinspattractedthinspoverthinsp300000thinspparticipantsthinspofthinspwhomthinsp209thinspcoveringthinsp206thinspdifferentthinspvocationsthinspwonthinspthethinspcov-etedthinspchampionthinsptraineethinsptitlethinspWiththinspthreethinspyearsthinspofthinsptrain-ingthinspunderthinsphisthinspbeltthinspBernhardthinspMetzlthinspconsequentlythinsphasthinspnotthinsponlythinspathinsptrophythinspandthinspathinspcertificatethinspbutthinspgreatthinsppros-pectsthinspforthinspathinspsuccessfulthinspcareerthinspatthinspWACKERthinspAfterthinspthethinspawardthinspceremonythinspHeinrichthinspSchikanederthinspthethinspBBiWrsquosthinspdeputythinspheadthinspofthinspelectricalthinspengineeringthinsptrainingthinspsaidthinspldquoItrsquosthinspalwaysthinspathinspgreatthinspjoythinspforthinspusthinspinstructorsthinsptothinspbethinspablethinsptothinspworkthinspwiththinspyoungstersthinsplikethinspBernhardthinspMetzlthinspThisthinspkindthinspofthinspsuccessthinspisthinspachievedthinspwheneverthinspdesirethinspabilitythinspopportunitiesthinspandthinspchallengesthinspcomplementthinspeachthinspotherthinspasthinsptheythinspdothinspinthinsphisthinspcaserdquothinsp

WACKERrsquos Nuumlnchritz plant was once again honored as an excellent training company by the Dresden Chamber of Commerce in 2010 Among the Nuumlnchritz trainees are Doreen Moldenshyhauer (chemical lab assistant) and Sten Morgenstern (chemical technician) both of whom received regional Champion Trainee awards in 2010

BestthinspGraduationthinspResultthinspforthinspWACKERthinspTrainee

Employees

2010 2009 2008

Number of new trainees thinsp 196 201 thinsp 193

Total number of trainees thinsp 682 665 thinsp 643

Thereof hired by WACKER on completion of training thinsp 133 160 thinsp 154

Total number of employees in retraining thinsp 18 6 thinsp 3

Trainees retrainees as a percentage of total thinspWACKER Germany employees

53 53 thinsp 50

AdvancedthinspTrainingWACKER offers advanced training to all its employees After all we need skilled workers if WACKER is to remain innovative and competitive WACKER develops its employees according to their strengths and chosen career paths Clearly lifelong learning and job flexibility are important for our employees and for the company because of the need to adjust to the lonshyger duration of working life

Annual performance reviews afford employees and supervisors the chance to agree on develshyopment measures This approach applies to all employees from standardshypayscale right up to top management In 2009 6200 places at seminars advanced training courses and confershyences were filled in 2010 the figure rose to more than 8700 Additionally our eshylearning sesshysions were completed 90000 times in 2009 and 100200 times in 2010

Employees in Germany can select advanced training courses from the wide range on offer under the WACKER training program The program categories are Technical Skills Manageshyment Skills Social Skills and Personal Skills Individual jobs determine whether participashytion in certain seminars is obligatory For example laboratory heads must attend a seminar tailored to their specific tasks and responsibilities Prospective works engineers and proshyduction operations managers attend a course preparing them for their new role Employshyees at WACKERrsquos international sites also have access to a variety of (advanced) training courses For example 708 participants completed a total of 1416 training days at WACKER Greater China in 2010

WACKER invested euro53 million in personnel development and advanced training in 2009 and euro58 million in 2010

Number of Training Hours per Employee 2010 2009 2008

Standardshypayscale employees thinsp 127 155 thinsp 116

Aboveshystandardshypayscale employees2 thinsp 237 230 thinsp 227

1 Excludes production-specific training Includes internal and external seminars and advanced training courses Figures apply to WACKER Germany

2 Third-level management ( FK3 ) and executive personnel ( OFK )

ManagerialthinspStaffAnother focus of our personnelshydevelopment activities is on identifying and promoting young management potential To obtain top potential WACKER implements a uniform process that encompasses all leadership levels Responsibility for the process is shared by the Executive Personnel (OFK) and Human Resources departments and the managers of the units directly affected

Trainees

AdvancedthinspTraining1

We have specific executiveshydevelopment programs for each of our three target groups employees on the standard and aboveshystandard payscales and executive personnel (OFKs)

Participation in development programs is determined by groupwide successor planning annual performance reviews and employee interests Thus standardshypayscale employees who are proposed or apply for a position as shift leader or certified industrial foreperson can attend a Potential Analysis Workshop Aboveshystandardshypayscale employees with outstandshying track records have the opportunity to attend a Management Development Center which singles out and promotes their strengths

University graduates can join WACKERrsquos 18shymonth General Management Trainee Program (GTP) This program has an excellent reputation as can be seen in the high number of wellshyqualified graduates who wish to enroll In 2009 five university graduates participated in the program and another five in 2010 WACKER launched its trainee program back in 1997 since then 67 graduates have completed management training After an orientation phase the trainees work for three to six months on various projects that often involve periods spent abroad Siltronic had a separate trainee program that was discontinued in 2009 because of the economic situation

Two executiveshydevelopment programs are available to WACKER employees who have been recommended for them the Focus Program for aboveshystandardshypayscale candidates for OFK executive positions and the OFK Management Circle for recently appointed executives Parshyticipants in these oneshyyear programs learn selfshydevelopment and management skills In 2010 we made both these programs available to nonshyGerman participants for the first time In the 2008 2009 period 14 potential young managers completed the Focus Program and 13 in 2010 2011 Fourteen newly appointed executives completed the OFK Management Circle

WACKER offers experienced executives a program called OFK General Management Compact It comprises modules in strategy leadership and change management Up to 2009 28 execushytives had attended this program It is currently being revised for relaunch in 2012

For several years WACKER has been involved in Munichrsquos crossshymentoring program to help prepare women with management potential for leadership positions with the aim of increasshying the number of women in top management This program involves an experienced manshyager acting as mentor to a female mentee at another company Three young female WACKER employees with management potential attended the program in 2009 and another three in 2010 WACKER OFK executives in turn act as mentors to other companiesrsquo mentees

In 2009 a development program for experienced middleshymanagement staff received the ldquoChief Learning Officerrdquo award from the German trade journal ldquowirtschaft + weiterbildungrdquo The Management Experts program is designed for executives over the age of 50 with the aim of maintaining performance at a high level during the second half of their career Up to 2009 12 executives had participated in this program

All WACKERrsquos managerial staff whatever their level receive feedback on their management style when they hold annual performance reviews with their employees

67ldquoHighthinspPotentialsrdquothinspHavethinspCompletedthinspWACKERrsquosthinspManagementthinspTraineethinspthinspProgramthinsptothinspDate

Employees

Target Group Potential and Performance Training and Development

thinsp thinsp thinsp

Siltronic International Circle

Siltronic promotion candidate training

Advanced Management Program

Focus Program

Management Experts Program

CrossshyMentoring Program

Management Development Center

Personalized OFK 1 Candidate Development Center

Above-standard-payscalethinspemployeesthinsp(thinspFK3thinsp)

Siltronic Leadership Potential Workshop

Potential Analysis Workshop

FirstshyLevel Management Program

Standard-payscalethinspemployees

Executivethinsppersonnelthinsp(thinspOFKthinsp) Personnel Development Day

General Management Program

OFK 1 Management Circle

Allthinsptargetthinspgroups

Successor planning

Siltronic Leadership Process

Coaching

Vocational training program tailored measures onshytheshyjob training

1 Executive Personnel

DemographicthinspChangeWACKER has been addressing demographic change intensively for many years The average age of the Grouprsquos (permanent) workforce was 431 on the 2010 reporting date Employees at nonshyGerman sites are younger (average age 418) than in Germany (435) Inshyhouse studies have shown that the number of employees over 50 in Germany will double between 2006 and 2017 ndash from 22 to 44 percent

The age structure abroad varies greatly from region to region Staff at Asian sites are comshyparatively young (average age 356) while staff at US locations have an average age of 485 Age structure variations are not exclusive to WACKER They reflect each continentrsquos and countryrsquos age structure

ExecutivethinspDevelopment

Age 15 35 55 75

thinsp

DemographicthinspAnalysisthinspofthinspGermanthinspandthinspInternationalthinspSitesthinspinthinsp2010

Group Germany International ( excluding Germany )

000510152025303540

Group ( average age 431 )

International ( average age 418 )

Germany ( average age 435 )

To maintain our longshyterm innovative and competitive strength and to acquire and retain highly qualified employees we have formulated ten strategic goals We intend to

1 Systematically promote health 2 Create corporate value by appreciating all age groups by introducing sweeping changes

in our approach to aging and involving managers and employees 3 Encourage and demand vocational training and job flexibility across all age groups 4 Secure expertise for the future and transfer knowledge in a systematic and binding

manner 5 Develop instruments to manage and regulate the transition to retirement 6 Orientate compensation to levels of performance and expertise 7 Maintain and enhance WACKERrsquos attractiveness for employees 8 Intensify advertising and recruitment efforts aimed at professions critical to WACKERrsquos

success 9 Pursue forwardshylooking strategies for inshyhouse vocational training 10 Act as a corporate citizen by fostering scientific and technological interest in youth at an

early age

To achieve these goals we have introduced a number of measures ndash ranging from employee health programs through to basic and advanced training These are intended to maintain employeesrsquo job flexibility We are putting increased effort into acquiring talented and comshymitted young staff One example is the ldquoPIngrdquo project (a personnelshymarketing strategy tarshygeting engineers) intended to inform aspiring engineers of career opportunities at WACKER It revolves around intensive contacts with universities e g in the form of projectshyplanning courses site tours for students opportunities for internships and for preparing degree theses WACKER also attends job fairs at universities

Life and Career

EqualthinspOpportunitiesAs a global company WACKER operates in international markets and multicultural environshyments Holding each employeersquos skills and dedication in high regard we see diversity as an enrichment We oppose unequal treatment or disparagement on account of gender race ethnicity religion ideology disability sexual orientation or age These principles are valid across the WACKER Group and as part of our corporate culture are embodied in our Code of Conduct

Employees

For several years now we have been requiring all employees at our German sites to familiarize themselves with Germanyrsquos General Equal Treatment Act (AGG) by completing an eshylearning course This course is compulsory for all levels of corporate hierarchy from the Executive Board down to standardshypayscale employees as well as all new employees

Special arrangements are in place to help and promote WACKER employees who are disabled or suffer from longshyterm occupational disabilities Representatives of WACKERrsquos disabled employees play a key role in finding suitable positions for anyone with a longshyterm occupashytional disability On average 827 disabled employees worked in Germany in 2010 (2009 772) Accounting for 67 percent of WACKERrsquos workforce (2009 65 percent) this figure was well above the legally prescribed German rate of 5 percent Even so we had to pay a small compensashytory levy as not every subsidiary achieved the 5shypercent target More than 45 percent of WACKERrsquos disabled employees were aged between 55 and 64

In 2009 the WACKER plant at Nuumlnchritz was honored by the Saxony state government for its exemplary integration of disabled workers Integration management has been an intrinsic part of HR work at the site since 2005 There is close cooperation between supervisors emshyployees HR disabledshyemployee representatives and Health Services to permit physically disabled employees to remain in their workplace or to change to a suitable job This allows us to retain skilled staff and their qualifications and valuable knowledge acquired over many years remains with WACKER

WACKER also supports severely disabled people who cannot find work on the general job market e g via collaborative ventures with workshops for the disabled Our Burghausen site for instance sources key products such as mounting plates angle bars and packaging for Siltronic from the charitable Ruperti workshops At the Nuumlnchritz site we have for many years been using the services of ldquoLebenshilfe fuumlr geistig Behinderte Riesa e Vrdquo (a charity for the mentally disabled) for landscaping and garden maintenance

2010 2009 2008

Mandatory workplaces ( annual average ) thinsp 633 626 thinsp 628

Actual workplaces ( annual average ) thinsp 827 772 thinsp 733

Ratio of actual to mandatory workplaces ( annual average ) thinsp 1306 1233 thinsp 1167

Disabled employees as a percentage of total employees WACKER Germany thinsp 67 65 thinsp 63

Compensatory levy ( euro thousand ) thinsp 4 2 thinsp 6

WACKER hires new employees and executives solely on the basis of qualification We thereshyfore do not give preference to local applicants when we have senior management posts to fill In Germany the General Equal Treatment Act (AGG) in any case forbids the selection of personnel according to origin but in the other WACKER regions such as China and the USA we also select candidates exclusively by qualification

Equal treatment applies to both men and women at WACKER It goes without saying that we offer equal opportunities to all employees regardless of their gender This approach also applies to compensation The amount earned reflects each jobrsquos specific demands and responshysibilities The average annual salary of female employees is slightly lower than that of male employees The reason lies in the statistical analysis where parameters such as seniority age and performance content of the salary are not compared

DisabledthinspEmployees

2010 2009 2008

Aboveshystandardshypayscale employees 2 thinsp 964 965 thinsp 889

1 Full-time employees on permanent staff WACKER Germany2 Third-level management (FK3)

WACKER is trying to increase the number of its female executives For this purpose we parshyticipate in Munichrsquos CrossshyMentoring Program To get girls interested in jobs such as indusshytrial mechanic or electronics specialist we take part in the Girlsrsquo Day event held throughout Germany

In 2010 WACKER joined a German Ministry of Education and Research study investigating develshyopments on the subject of women in executive positions at large companies Alongside WACKER five other chemical and technology companies are taking part The study focuses on developing the careers of women with university or technicalshycollege degrees 14 percent of graduates employed in Germany are women By participating in the study WACKER intends to analyze why women are undershyrepresented and to determine what it needs to do to deploy its female employees more effectively The research project is scheduled to end in 2012

2010 2009 2008

Employeesthinspgroupwide thinsp 16314 15618 thinsp 15922

Thereof female thinsp 3560 3438 thinsp 3506

Female employees groupwide ( ) thinsp 218 220 thinsp 220

EmployeesthinspWACKERthinspGermany thinsp 12235 11925 thinsp 12110

Thereof nonshyGerman thinsp 1545 1551 thinsp 1637

NonshyGerman employees at WACKER Germany ( ) thinsp 126 130 thinsp 135

Third-levelthinspmanagementthinspemployeesthinsp(thinspFK3thinsp)thinspgroupwide thinsp 2920 2811 thinsp 2690

Female FK3 employees groupwide ( ) thinsp 192 186 thinsp 187

Executivethinsppersonnelthinsp(thinspOFKthinsp)thinspgroupwide thinsp 206 201 thinsp 204

Female OFK employees groupwide ( ) thinsp 68 55 thinsp 64

WorkthinspthinspLifethinspBalanceWACKER is dedicated to helping employees successfully integrate their careers and private lives Our modern workshytime systems are extremely flexible and offer considerable individual leeway We have a wide range of flextime models even including a selfshyregulated system based on trust Wherever possible we offer both fullshytime and partshytime jobs even for shift workers in continuously operating plants In individual cases WACKER enables employees to work from home (an option that may be combined with partshytime work) and authorizes unpaid leave for urgent private business

RatiothinspofthinspWomenrsquosthinspAnnualthinspSalariesthinsptothinspMenrsquos1

Project flyer on the devel-opment of female execu-tives in major firms (avail-able in German only)

EqualthinspOpportunities

Employees

2010 2009 2008

Part-timethinspemployeesthinspWACKERthinspGermanythinspthinsp 762 782 thinsp 790

Thereof male thinsp 139 152 thinsp 158

Partshytime employees WACKER Germany ( ) thinsp 62 66 thinsp 65

Employeesthinspinthinspphasedthinspearlythinspretirementthinspthinsp 1268 1231 thinsp 892

Thereof in nonshyactive phase thinsp 429 437 thinsp 359

Another key aspect of WACKERrsquos HR policy focuses on balancing family life with work The varied range of workshytime models reflects the circumstances specific to men and women at particular stages in their lives WACKER was one of the first companies to sign a joint declashyration on Germanyrsquos ldquoFamily as a Success Factorrdquo business network which has its origins in an initiative launched by the Federal Ministry of Family Affairs and the German Chamber of Industry and Commerce In the declaration WACKER commits itself to taking into account the needs of employees with family obligations and to offering suitable support In 2009 WACKER also joined the ldquoeffrdquo project (Efficient FamilyshyFriendly Leadership) launched by the Bavarian Ministry of Family Affairs

We support childcare and the return to work after parental leave One example is the returnshytoshywork workshop at the Burghausen site Kindergarten and aftershyschool care facilities are available at the WoumlhlershyKinderhaus located very close to the plant At the Munich site pme Familienservice GmbH helps employees find kindergarten and preschool places In Freiberg Saxony Siltronic has a collaborative agreement with a local dayshycare center which offers Siltronic a fixed number of preschool places extended opening times and if required longer individual care hours

2010 2009 2008

Parentalthinspleavethinspthinsp 336 329 thinsp 285

Thereof menthinspthinsp 107 104 thinsp 74

Thereof womenthinspthinsp 229 225 thinsp 211

Returneesthinspfromthinspparentalthinspleavethinspthinsp 183 161 thinsp 128

Returneesthinspfromthinspparentalthinspleavethinspwhothinspstillthinspworkedthinspthinspforthinspthethinspcompanythinsp12thinspmonthsthinsplater

159 114 thinsp shy 1

Thereof menthinspthinsp 96 56 thinsp shy 1

Thereof womenthinspthinsp 63 58 thinsp shy 1

1 No data available

At all its German sites WACKER offers a service for family emergencies Whether employees themselves or family members fall ill or need nursing care advice can be obtained from pme Familienservice GmbH

Part-TimethinspEmployees

EmployeesthinsponthinspParentalthinspLeavethinspWACKERthinspGermany

Compensation and Social Benefits

At WACKER employees participate in the companyrsquos ups and downs That is why fixed base salaries (including vacation and Christmas bonuses) are supplemented by variable compenshysation ndash a voluntary payment to standardshypayscale and aboveshystandardshypayscale employees It consists of a profitshysharing amount and a personalshyperformance component

In response to the economic downturn in 2009 the Executive Board and employee represenshytatives agreed on a number of costshysaving measures Under the agreement only 50 percent of the 2008 profit share due to standardshypayscale and aboveshystandardshypayscale employees and only 50 percent of the bonuses due to the Executive Board and to executive personnel were to be paid out initially The regular compensation of the Executive Board and top manshyagement was reduced temporarily Whatrsquos more WACKER did not raise the base salaries of aboveshystandardshypayscale employees by the planned 33 percent as of July 1 2009 The 30shypercent ldquovalue retentionrdquo (salary increase) for executive personnel was suspended

Since business improved in the course of 2009 WACKER paid out the withheld salary composhynents of employees in November 2009 except for the outstanding 50shypercent profit share for 2008 Profit sharing and the personalshyperformance component were suspended for 2009 Because of the economic recovery WACKER granted employees at its chemical divisions a lump sum in 2010 amounting to 375 percent of their fixed annual salaries The raise in base salaries suspended in 2009 was implemented at the beginning of 2010

Alongside compensation other important aspects include social and fringe benefits Based on what competitors offer and on local market conditions these benefits include suppleshymentary sick pay subsidized company restaurants and attractive company cars

WACKER company pensions are a key component of employee compensation They are available at nearly every site around the world with individual pension plans complying with countryshyspecific legislation

In Germany the WACKER company pension has two components the basic pension and a supplementary pension Additionally employees have the opportunity to enlist in a private plan that minimizes their tax burden The basic company pension supplements the statutory pension In taxation terms the supplementary company pension positively impacts that proshyportion of the salary which exceeds the upper limit for the statutory pension and the basic company pension

The basic company pension is provided by the Wacker Chemie VVaG pension fund estabshylished in 1928 The fund has some 16100 members and provides pension payments to approxshyimately 7200 retirees The average monthly pension was approximately euro630 in 2009 and 2010 WACKER contributes up to 25 times its employeesrsquo annual pension contributions with the exact amount being determined by the type of agreement

The WACKER pension fund with euro14 billion on its balance sheet is one of Germanyrsquos largest company pension funds The marketshyvalue return was 88 percent in 2009 and 55 percent in 2010 the ratio of hidden reserves was 77 percent (2010) Thanks to a special allocation by WACKER in 2008 and the positive development of returns in the subsequent two years the situation of the pension fund improved quickly after the financial crisis and the pension fund passed all the stress tests required by Germanyrsquos Financial Supervisory Authority (BaFin)

With company pensions supplementing their statutory pensions WACKER employees can maintain their accustomed living standards on retirement

Employees

2010 2009 2008

Average monthly company pension ( euro ) thinsp 630 630 thinsp 632

Expenses for pensions and pensionshyrelated benefits ( euro thousand ) thinsp 47300 46300 thinsp 44900

WACKER also contributes to guaranteed minimum incomes in countries without national health insurance or state pension programs We make sure that our compensation and social benefits are fair and competitive worldwide At the very least they correspond to local statushytory requirements or industrial codes of practice and in many cases they surpass the local minimum WACKER Greater China for example offers its employees a host of additional benefits such as insurance policies or relocation assistance Lowershypaid employees can cover their own and their familiesrsquo living costs

WACKERrsquos partshytime and fixedshyterm employees also receive the full range of social benefits However participation in some benefits and their full payment e g profitshysharing and the company pension are dependent on minimum seniority

With its exemplary social benefits and performanceshyoriented compensation WACKER remains an attractive employer for current and future employees This explains our high level of emshyployee loyalty ndash the 2010 fluctuation rate was 25 percent groupwide and just 06 percent in Germany On average employees in Germany remained with the company for 172 years

2010 2009 2008

Groupwidethinspthinsp 25 25 thinsp 29

International thinsp 87 86 thinsp 93

Europe 1 thinsp 60 110 thinsp 281

USA thinsp 52 79 thinsp 64

China thinsp 152 129 thinsp 101

Asia 2 thinsp 113 80 thinsp 96

1 Excluding Germany2 Excluding China

WACKER holds a regular celebration to honor its employees who have been with the company for many years In 2010 alone almost 600 employees were recognized for 25 or 40 years of service

WACKERthinspisthinspwellthinspknownthinspforthinspthethinspstrongthinsployaltythinspofthinspitsthinspemployeesthinspnever-thelessthinspfewthinspcanthinspmatchthinspJohannthinspFreutsmiedlthinsphonoredthinspinthinspfallthinsp2009thinspforthinsp50thinspyearsthinspofthinspservicethinspatthinspWACKERthinspHethinspstartedthinsphisthinsptrainingthinspatthinspWACKERrsquosthinspBurghausenthinspsitethinspinthinspSeptemberthinsp1959thinspwhenthinsphethinspwasthinsp13thinspfirstthinspasthinspofficethinspmessengerthinspthenthinspasthinspanthinspapprenticethinspbricklayerthinspHethinsplaterthinspworkedthinspinthinspthethinspConstructionthinspdepartmentthinspwherethinsphethinsptookthinsponthinspplanningthinsptasksthinspsuchthinspasthinspcivilthinspengineeringthinspmeasuresthinspdraftingthinspandthinspthethinspplanningthinspofthinsproadsthinspchan-nelsthinspandthinspwaterthinsppipesthinspldquoIthinspenjoyedthinspgoingthinsptothinspworkthinspeverythinspdayrdquothinsphethinspsaysthinsplookingthinspbackthinspandthinspalsothinsptellsthinsphowthinspitthinspallthinspstartedthinspldquoMythinspfatherthinspwasthinspalreadythinspworkingthinspatthinspthethinspplantthinspsothinspIthinspwasthinspeagerthinsptothinspgetthinspathinspjobthinsptherethinsptoothinspEventhinspinthinspthosethinspdaysthinspWACKERthinsphadthinspathinspreputationthinspinthinspthethinspareathinspforthinspbeingthinspathinspsecurethinspemployerrdquothinspInthinsprecentthinspyearsthinspJohannthinspFreutsmiedlthinspwasthinspablethinsptothinsppassthinsponthinsphisthinspexperiencethinspandthinspexpertisethinsptothinspmanythinspyoungerthinspemployeesthinspbeforethinspfinallythinspretiringthinsponthinspDecemberthinsp1thinsp2010

CompanythinspPensions

FluctuationthinspRate

AthinspRarethinspAnniversarythinsp50thinspYearsthinspwiththinspWACKER

WACKER is one of the best employers in the German chemical industry as shown in an annual survey by Germanyrsquos Association of ChemicalshyIndustry Executives (VAA) Targeting 2000 management employees from 26 chemical companies the survey ranked WACKER second in 2009 and fifth in 2010 It assessed corporate strategies culture and working conditions In recshyognition of the high satisfaction ratings in this survey the VAA awarded WACKER the Cologne ChemicalshyIndustry Prize in 2009

A reputation analysis conducted in 2010 confirmed how strongly our employees identify with WACKER On a scale of 1 (lowest) to 5 (highest) they awarded WACKER a confidence rating of 44 Indeed 6 out of 10 employees were true ambassadors for WACKER fully endorsing the Grouprsquos expertise and entrepreneurial strength Companies like WACKER that stake their repshyutation on innovation and productivity need a highly committed workforce A comparison with an annual Gallup poll reveals how good our rating was only 13 percent of German emshyployees feel they have a strong emotional bond to their employer and are fully committed to their jobs

WACKER ranks among the best employers in China too In 2010 our WACKER Greater China subsidiary was awarded the ldquoTop Employer 2010rdquo certificate by the Corporate Research Foundation (CRF) CRF is an international organization that conducts research to identify the bestshyperforming major employers in human resources management The selection process focuses on the topics of training and advanced training personnel development compenshysation and social benefits work environment and corporate culture Alongside WACKER Greater China approximately 250 other companies from various industries were considered for selection

Employee Representation

WACKER works with the employee representatives in a spirit of cooperation and trust Indusshytrial union membership has always been high among WACKER employees especially at the German sites Employees are under no obligation to inform their employer of any union memshybership and the employer is not permitted to ask We therefore do not know how many union members there are at WACKER

WACKER employment contracts treat staff based in Germany ndash regardless of their union memshybership ndash as if they were covered by the respective applicable collective agreement WACKER employees at nonshyGerman sites can also organize in unions At our major US production site in Adrian (Michigan) for instance some 42 percent of the employees are unionized At nonshyGerman sites without (statutory or voluntary) employee representation HR staff members are the contacts for employee interests

WACKERthinspExecutivethinspBoardthinspmemberthinspDrthinspWilhelmthinspthinspSittenthalerthinsp(thinspcenterthinsp)thinspwasthinsppresentedthinspwiththinspthethinsp2009thinspColognethinspChemical-IndustrythinspPrizethinspbythinspDrthinspThomasthinspFischerthinsp(thinspatthinspleftthinsp)thinspchairmanthinspofthinspGermanyrsquosthinspAssocia-tionthinspofthinspChemicalthinspIndustrythinspExecutivesthinsp(thinspVAAthinsp)thinspAtthinsprightthinspFriedrichthinspUumlberackerthinspheadthinspofthinspthethinspRhinelandthinspbranchthinspofthinspthethinspchemical-industrythinspemployersrsquothinspthinspassociation

Employees

Health Protection

HealththinspManagementWACKER does everything in its power to ensure that employeesrsquo health is not impaired at the workplace But our care for our employees goes much further than that Demographic change has made it necessary that we help employees to remain healthy and productive for a longer working life WACKER has signed the Luxembourg Declaration on Workplace Health Promotion in the EU In doing so we have undertaken to promote health and to encourage employees to improve their health

The ultimate objective is to standardize and improve our healthshymanagement system groupshywide The requirements of the 2008 occupational health and safety regulation have been continuously implemented since then and the pilot projects involved have also continued The regulation defines 13 measures in total ranging from workplace risk assessment and health promotion to a pandemicshypreparedness plan The success of these measures is reshyviewed in internal audits In 2009 our US sites underwent such an audit as did our facilities in Zhangjiagang (China) and India in 2010

Two of the most important strategic instruments for ensuring occupational health and safety are medical checkups and healthshypromotion programs Health Services at our Burghausen site advises employees in all health matters particularly concerning availability for work and reintegration Risk groups like diabetics employees with back complaints or psychological problems receive inshydepth care and are thus kept fit for work in the long term

In 2009 2010 WACKER included key thirdshylevel executives (FK3) in the checkups for the first time In order to improve the analysis of workplace stress a project was initiated in 2010 In the same year WACKER launched a pilot project together with the South German branch of the statutory pension insurance system (Deutsche Rentenversicherung Suumld) The aim is to optimize the effectiveness of rehabilitation measures for employees the Group and the inshysurer WACKERrsquos Health Services department can now submit rehabilitation applications on an employeersquos behalf for expedited processing by the insurance system The project involves WACKER company doctors working with partner clinics in order to tailor rehabilitation measshyures to the employeersquos job profile The pilot project is initially limited to WACKERrsquos largest site Burghausen

In Zhangjiagang China WACKER opened a medical center together with its jointshyventure partner Dow Corning in 2008 Employees there carry out tasks including outpatient first aid immunization shots and other preventive programs

InthinspthethinspyearsthinsptothinspcomethinspWACKERthinspwillthinspbethinspsettingthinspupthinspfivethinsphealth-protectionthinspprogramsthinspforthinspitsthinspemployeesthinspOnethinspprogramthinspwillthinspconcernthinspthethinsptopicthinspofthinspcardiovas-cularthinsphealth

EmployeethinspInformationthinspandthinspHealththinspProgramsWACKER sensitizes employees to health risks WACKER Germany regularly organizes health campaigns on various topics In 2010 for example it ran campaigns devoted to healthy eatshying and exercise Additionally it offers fitness classes The healthshypromotion programs also include addiction seminars and back training Employees at all WACKER sites worldwide are offered an annual voluntary flu vaccination free of charge

In 2009 WACKER introduced a new training course called Fit for Leading During this threeshyday seminar managerial staff can review and improve their lifestyle patterns with regard to health as well as develop a healthy leadership style

At WACKER prevention of drug dependence is important Alcohol is forbidden at work and there are courses to help smokers kick the habit All managers are required to attend classes on the prevention of drug dependence that will enable them to recognize employees who are at risk or already addicted and to encourage them to seek the proper treatment For several years managers have also had training in recognizing and handling employees suffering from stress

Lackthinspofthinspexercisethinspandthinspincorrectthinsplif tingthinspandthinspposturethinspoftenthinspcausethinspbackthinspproblemsthinspAffectedthinspemployeesthinspsufferthinspfromthinsppainthinspandthinspimpairedthinspqualitythinspofthinsplifethinspandthinsparethinspfrequentlythinspoffthinspsickthinsporthinsprestrictedthinspatthinspthethinspworkplacethinspForthinspthisthinspreasonthinspWACKERthinspstartedthinspathinsppilotthinspprojectthinspatthinspthethinspBurghausenthinspsitethinspinthinsp2010thinspTwicethinspathinspweekthinspemployeesthinspwiththinspbackthinspproblemsthinspattendthinsptrainingthinspsessionsthinspinthinspthethinspfitnessthinsproomthinspofthinspthethinsplocalthinspsportsthinspclubthinspsupervisedthinspbythinspathinspphysiothera-pistthinspFirstthinspthethinspstrengththinspofthinspthethinsptorsothinspmusclesthinspisthinspmeasuredthinspinthinspeachthinsppartici-pantthinspandthinspanthinspexactthinspdiagnosisthinspisthinspmadethinspBasedthinsponthinspthesethinsptwothinspparametersthinspanthinspindividualthinsptrainingthinspplanthinspisthinspdesignedthinspAfterthinspjustthinspathinspfewthinspmonthsthinspmeasure-mentsthinspshowedthinspathinspsignificantthinspincreasethinspinthinspmusclethinspstrengththinspThethinspparticipantsthinspfeltthinspmuchthinspbetterthinspandthinspperiodsthinspofthinspabsencethinspbecausethinspofthinspbackthinspproblemsthinspwerethinspreduced

2010 2009 2008

Sickness Rate 1thinspthinsp 45 44 thinsp 41

1 Days lost through illness divided by target working time in days times 100 WACKER Germany

The number of recognized occupational diseases is low at WACKERrsquos German sites Noise is the most frequent cause of illness there are some isolated cases where previous exposure to asbestos has caused occupational diseases So far WACKER has not evaluated groupwide figures concerning occupational diseases of its employees because the criteria for the recogshynition of illnesses as occupational vary from country to country

FightingthinspBackthinspStrainthinspthethinspBackthinspFitnessthinspProject

SicknessthinspRate1

Employees

Pandemic-PreparednessthinspPlanWACKER has maintained a pandemicshypreparedness plan since 2005 to minimize health risks and business disruption in the event of a crisis The plan defines how and when a central management team should coordinate all emergencyshyresponse measures worldwide It inshycludes regulations and documented procedures on how to deal with employees who have fallen ill or been exposed as well as guidelines on business trips to affected regions and rules concerning siteshyspecific access checks WACKER has a supply of influenza drugs and special equipment (such as face masks gloves and disinfectants) to hand out to employees in the event of a pandemic

Besides the seasonal flu vaccination vaccination against the soshycalled swine flu (H1N1) was offered in 2009 There was little demand for it among the general staff so that mainly Health Services and Fire Service personnel were vaccinated

Society

DrthinspTobiasthinspOhlerMemberthinspofthinspthethinspWACKERthinspReliefthinspFundrsquosthinspBoardthinspofthinspDirectorsthinspandthinspExecutivethinspVicethinspPresidentthinspofthinspSiltronicthinspAGthinspMunichthinspHeadquartersthinsp

ldquoOur donations are intended to give children in need the chance of a better liferdquo

Goal and Outlook

SettingthinspupthinspathinspBerlinthinspOfficeWACKER will be setting up a liaison office in Berlin in 2011 to better represent the companyrsquos political interests

OpenthinspHouseThe VCI ( German Chemical Industry Association ) will be sponsoring an open house in 2011 and WACKER will be participating The company will open the gates of its Burghausen Freiberg and Cologne sites to the public on September 24

ReissuethinspofthinspSchoolthinspExperimentthinspKitWACKER is planning to overhaul its school experiment kit in 2011 2012 Once complete the kit will meet new educational requirements for junior highshyschool students in Germany

RevisethinspandthinspreissuethinspWACKERrsquosthinspschoolthinspexperimentthinspkitCorporate entity GroupwideDeadline 2012

NewthinspGoal

Outlookthinsp

Society

Companies can only be commercially successful if they have societyrsquos trust which is why we take our social responsibilities seriously especially in communities near our sites We place particular importance on the scientific and technical education of young people since we will need dedicated scientists and engineers if we are to remain competitive tomorrow Social projects to help children and adolescents represent yet another pillar of our social commitment while the WACKER relief fund (WACKER HILFSFONDS) provides support to victims of natural disasters and helps rebuild devastated regions As part of our social commitment we seek enduring partnerships focusing our investments preferably on longshyterm projects

Taxes represent a major way in which WACKER contributes to society ndash with euro2203 million in current taxes going to governments throughout the world in 2010 (2009 euro1015 million 2008 euro2003 million) For many years WACKER has been the largest taxpayer in Burghausen (Germany) the location of our most important site Due to our payments the town reported its highest tax revenues ever in 2010 Business taxes alone generated euro72 million In addition to WACKERrsquos taxes governments receive the taxes and socialshysecurity contributions paid by our employees

euro thousand 2010 2009 2008

Donations thinsp 1011 924 thinsp 1033

Sponsoring thinsp 1150 466 thinsp 1090

Share of sales ( ) thinsp 005 004 thinsp 005

We donated roughly euro1 million per year in 2009 and 2010 ndash roughly half of this went to the SV Wacker Burghausen sports club as part of our efforts to support popular sports at our largest site The remaining funds went to foundations associations and nonshyprofit organishyzations

Our sponsoring activities focus on education science and the SV Wacker Burghausen proshyfessional soccer team Increasing from euro466000 in 2009 to euro115 million in 2010 our sponsoring expenses grew mainly because we changed our definition of sponsorship slightly 2010 marked the first time for instance that we included the costs of WACKERrsquos school experiment kit and of organizing the young Scientists (Jugend forscht) competition WACKER also contributed euro250000 in 2010 to the newly established university foundation at the Technical University of Munich see Universities on p 107

WACKERrsquosthinspDonationsthinspandthinspSponsoringthinsp

Society

Neighbors

WACKER sees itself as a corporate citizen ndash and corporate citizenship begins with a good reshylationship with onersquos neighbors For WACKER that means being open about what goes on behind the plant gates With hotlines and central contact persons available residents living near our sites around the world can turn to us with their concerns and receive fast clear anshyswers to their questions We inform the public about our sites through environmental reports and other publications and through open houses and events such as our environmental fair at Burghausen and our annual neighborhood discussions at Nuumlnchritz WACKER continued its openshydoor policy during the period under review as illustrated by the following examples

Hosting its firstshyever open house in 2009 WACKERrsquos Zhangjiagang site in China opened its doors to some 400 visitors who toured the plant and its facilities WACKER organized this day in cooperation with a group of other chemical companies One year earlier the memshybers of this group had signed what was called the ldquoResponsible Carereg Beijing Manifestordquo In this declaration a total of 24 chemical firms had committed themselves to holding Chinarsquos first joint ldquoopenshytoshypublicrdquo day

Our Siltronic subsidiary in Freiberg (Saxony Germany) attracted a lot of interest when it hosted a Science Night in 2009 Over a thousand visitors came to learn about siliconshywafer production from Siltronicrsquos employees An HR team was on hand to answer quesshytions about apprenticeships and internships

WACKER regularly hosts open houses for the families of employees At the Burghausen site for example several WACKER POLYMERS facilities organized tours in 2009 for their employeesrsquo families 2010 saw Burghausen holding tours for the families of all WACKER employees

We assess the effect of our business activities on our surroundings both on an ongoing basis and prior to making investment decisions The assessment process includes analyses of parameters such as anticipated emissions regional infrastructure and impacts on the local job market

At the Nuumlnchritz site for instance WACKER began work in 2008 on the construction of a new polysilicon plant that by late 2011 will have created around 450 new jobs at an investment of roughly euro800 million We have kept area residents openly informed about the project ever since construction began When four families living in the direct vicinity of the new plant were particularly affected by the construction work WACKER purchased their homes ndash a move that allowed these families to relocate to other nearby areas Our standards of open transparent information have helped give the site a very good reputation with its neighbors Despite the unavoidable inconveniences caused by the new construction most residents of Nuumlnchritz and the surrounding area have a positive attitude toward the WACKER plant expansion

At its US site in Allentown (Pennsylvania) WACKER POLYMERS has established new ties with the local community In 2010 the site began supporting a local charity ndash Habitat for Humanity of the Lehigh Valley ndash which builds (or purchases and renovates) homes for families living in poverty Having already completed over 85 houses the local Habitat chapter provides benshyeficiaries with favorable loans and the opportunity to take part in the construction or renovashytion work themselves WACKER POLYMERS supports Habitat for Humanity by providing both funding and volunteers to help with painting finishing and tiling

Ordering goods and services from local suppliers is another important way in which WACKER supports neighboring communities The following are just a few examples for the reporting period

gt 1000VisitorsthinspAttendedthinspSiltronicrsquosthinspldquoSciencethinspNightrdquothinspHeldthinspatthinspitsthinspFreibergthinspSite

Adrianthinsp(MichiganthinspUSA)In 2010 95 percent of the sitersquos suppliers were from the USA with 28 percent coming from Michigan The services rendered by these suppliers were valued at about $78 million (roughly euro59 million)

CalvertthinspCitythinsp(KentuckythinspUSA)31 percent of the sitersquos suppliers were headquartered in Kentucky and just 2 percent of its vendors were from countries other than the United States The total value of US deliveries totaled $125 million (roughly euro94 million)

WACKERthinspGreaterthinspChinaDuring the 2009 2010 reporting period our Chinese subsidiaries procured 84 percent of their technical goods and services within China The value of these deliveries totaled RMB 842 milshylion (euro94 million)

Nuumlnchritzthinsp(Germany)The plant located in the state of Saxony in eastern Germany sourced 29 percent of its supshyplies and services from the surrounding region in 2010 (up from 23 percent in 2009) An addishytional 6 percent of its suppliers were from other eastern German states (2 percent in 2009) In total these services were valued at roughly euro224 million (euro96 million in 2009) Some 1500 conshystruction engineers and fitters worked on Nuumlnchritzrsquos new polysilicon facility Roughly half were employed by firms in Saxony and the rest by Bavarian companies Employees sent to Nuumlnchritz stayed in accommodations and vacation rentals run by regional providers Some 80 percent of the construction materials used were sourced in Saxony

WACKERrsquos Burghausen site lies within ChemDelta Bavaria a chemistry research and producshytion triangle encompassing companies that together employ some 25000 people and secure an additional 50000 jobs in the region

Schools

As a chemical company we are going to need outstanding scientists in the future Conseshyquently WACKER is working to generate enthusiasm for technology and the natural sciences among children a goal we are pursuing in a variety of ways

WACKER supports progressive teaching methods and modern school management systems Our Group is one of the founding members of the Bavarian Educational Pact a foundation in which 143 companies have now joined Bavaria in sponsoring a variety of projects at state schools The aim of all of these projects is to continuously modernize the Bavarian educashytional system The key initiative of the reporting period was the ldquoFlexible Elementary Schoolrdquo project an experiment where 20 Bavarian elementary schools geared their curricula toward childrenrsquos individual development

Since developing its first experiment kit for schools in 1992 WACKER has worked with educashytors and chemists to continuously improve the experiments and accompanying brochures The kits which are available to schools at no cost contain all of the basics required for runshyning chemical experiments on materials such as silicone fluids antishyfoam agents sealants adhesives and cyclodextrins ndash realshylife experiments from WACKER that support young peoplersquos science education During the period under review WACKER initiated two pilot projects inshyvolving the experiment kit Working with Munichrsquos LMU university WACKER set about modifyshying the experiments so that students at two types of German high school can perform them themselves The resulting changes will be incorporated into the next edition of the kit which is scheduled for completion in 2012

Society

WACKER supports ScienceshyLab a privateshysector educational initiative that awakens childrenrsquos interest in science at an early age At our German locations we finance oneshyday ScienceshyLab seminars for elementaryshyschool and kindergarten teachers We also donate research kits that enable seminar participants to cover topics such as biology chemistry physics astronshyomy and the earth sciences in a kidshyfriendly way With the help of Scienceshy Lab and the Booz consultancy WACKER launched an education initiative in 2010 for NeuperlachshyRamersshydorf (the district of Munich with the cityrsquos highest rate of poverty) Here kindergarten and elementaryshyschool teachers were offered the chance to learn more about certain scientific and technical topics for classroom work In Burghausen and Altoumltting WACKER financed ScienceshyLab experiment fairs for children during the summer vacation

Since 1998 WACKER has supported Germanyrsquos young Scientists competition which promotes young peoplersquos interest in science Every two years (including 2010) we organize and sponshysor the Bavarian stateshywide competition WACKER has also supported Dresdenrsquos regional comshypetition since 2007 first as partner and since 2009 as an official corporate sponsor

All WACKER sites help young people prepare for a profession At career days and student workshops our employees introduce highshyschool students to jobs in the chemical industry and teach them realshylife skills The following are a few examples from the period under review

The ldquoVisions 2050 ndash Students Thinking Outside The Boxrdquo creativity workshop students at Burghausenrsquos Aventinus high school attended this threeshyday workshop where they develshyoped ideas for innovative products and learned techniques for presenting their ideas

Girlsrsquo Day as in previous years WACKERrsquos Burghausenshybased vocational training center (BBiW) took part in this nationwide career information day in 2009 and 2010 Girls attendshying the event learned about careers as industrial mechanics skilled chemical workers and electrical maintenance and automation technicians

Information Day once a year the BBiW opens its doors to present its training program Instructors and trainees are on hand to answer questions and to organize tours through BBiW training laboratories and workshops 2009rsquos and 2010rsquos young visitors and their parents had the opportunity to ask about careers in business and chemistry about apprenticeship programs in the fields of metalworking and electronics and about comshybined workshystudy bachelorrsquos degree programs

Career Day at Freibergrsquos high school students spent an entire day in 2010 in career inshyterest groups They met with employees from a variety of companies including Siltronic to learn about educational and career opportunities in their field of interest

Science-Lab educational initiative (Ger-man-language link only)wwwscience-labde

Young Scientists in Bavaria and Dresden (German- language links only) wwwjugend-forscht- bayernde wwwjufo-dresdende

Girlsrsquo Day (German- language link only)wwwgirls-dayde

EachthinspyearthinspBurghausenrsquosthinspVocationalthinspTrainingthinspCenterthinsp(thinspBBiWthinsp)thinspinvitesthinspyoungthinsppeoplethinspandthinsptheirthinspparentsthinsptothinspanthinspinfothinspevent

Thirteen school libraries have been established in the Chinese provinces of Anhui and Guangdong since 2006 thanks to employees at our WACKER Greater China subsidiary And in the village of Fujia WACKER helped finance the complete reconstruction of an elementary school after the 2008 earthquake see Disaster Aid on p 110

AthinspfavoritethinspprojectthinspofthinspWACKERthinspchemiststhinspDrthinspChristianthinspFingerthinspandthinspDrthinspGuidothinspKallingerthinspisthinsptothinsppresentthinspchemistrythinspinthinspanthinspexcitingthinspandthinspinspiringthinspwaythinspTheythinspheldthinspseveralthinspchemistrythinsplecturesthinspforthinspchildrenthinspduringthinspthethinspreportingthinspperiodthinspndashthinspforthinspinstancethinspathinspldquochildrenrsquosthinspuniver-sityrdquothinsplecturethinspatthinspBurghausenthinspinthinsp2010thinspEntitledthinspldquoColdthinspLightthinspandthinspHotthinspColorsrdquothinspthethinsplecturethinspdrewthinspoverthinsp100thinspjuniorthinspstudentsthinspbetweenthinspthethinspagesthinspofthinspeightthinspandthinsptwelvethinsptothinspthethinspcommunitythinspcenterthinspauditoriumthinsptothinsplearnthinsphowthinspartificialthinsplightthinspisthinspgeneratedthinspandthinsphowthinspitthinspcanthinspbethinsptrans-formedthinspintothinspathinsppanoramathinspofthinspcolorsthinspThethinspchemiststhinspdemonstratedthinspthisthinspbythinsptakingthinspathinspluminousthinspbluethinspreactionthinspmixturethinspandthinsppouringthinspitthinspthroughthinspathinspcoolingthinspcoilthinspThethinspchildrenthinspwerethinspamazedthinspasthinspthethinspmixturethinspndashthinspnowthinspathinspradiantthinspyellowthinspndashthinspcollectedthinspintothinspathinspconicalthinspflaskthinspInthinspotherthinspexperimentsthinspthethinsptwothinspWACKERthinspemployeesthinsppreparedthinspDraculathinspteathinspandthinspathinspvampirethinspdessertthinspandthinspmadethinsptartaricthinspacidthinsplightthinspupthinspandthinspmin-eralsthinspglowthinspBetweenthinspdemonstrationsthinspthethinspscientiststhinspalsothinspmadethinspbriefthinspforaysthinspintothinsptheorythinspteachingthinspthethinspchildrenthinspthethinspscientificthinspfun-damentalsthinspofthinspheatthinspandthinsplight

Universities

WACKER maintains close ties to universities throughout the world Our researchers are freshyquently invited to give presentations and guest lectures at universities Similarly university groups visit our sites for a glimpse of work at an industrial corporation WACKER offers students plant jobs and internships as well as opportunities to write doctoral theses and papers for bachelorrsquos and other degree programs

WACKER has traditionally maintained a close relationship with the Technical University of Munich (TUM) This collaboration led in 2008 to the Institute of Silicon Chemistry in Garching (near Munich) ndash a pioneering example of practical support for the next generation of scientists We are supporting this interdisciplinary silicon institute and the WACKER Chair at the TUM with initial funding of euro6 million in total for a period of 6 years Ten students receiving WACKER grants completed their dissertations during the period under review and 14 new grant recipishyents have begun theirs Members of the first graduating class have now left the institute and begun their careers in industry ndash and some have started working in research at WACKER

In 2010 the Technical University of Munich set up the TUM University Foundation which WACKER supported with an initial donation of euro250000 In the future this charitable foundation will promote research projects of outstanding merit provide grants and help cut through red tape whenever leading academics are recruited from abroad

WACKERrsquos support of young scientific talent extends beyond its collaboration with the Techshynical University of Munich In 2009 and 2010 for instance we commissioned research papers and theses from students at over 30 universities In China WACKER also awards grants to stushydents attending the Southern yangTze University in Wuxi and the Nanjing Forest University (both in Jiangsu province)

Every year since 2008 WACKERrsquos Burghausen site has held summer courses for processshyengineering and chemicalshyengineering students Through lectures and plant tours the courses offer participants insights into work at a chemical company

YoungthinspStudentsthinspChemistrythinspatthinspChildrenrsquosthinspUniversity

Society

In collaboration with schools of bioengineering and chemical engineering WACKER has been organizing project development courses for several years now providing practical experience for students nearing the end of their studies When engineering students from the University of Dortmund participated in the program in 2009 WACKER challenged them to design a chloroshymethane production plant Through such initiatives we want to strengthen universitiesrsquo ties to WACKER raise our profile among students and meet potential applicants in a work situation

Every two years we present the WACKER Silicone Award one of the worldrsquos most significant honors in the field of silicon chemistry In 2009 the euro10000 award went to Prof Ulrich Schubert a professor at the Technical University of Vienna His work (due to its practical relevance) is of considerable importance in the industry In addition to his research on topics such as metalshysilicon complexes Prof Schubert has also published materialshyscience studies on the solshygel process

Politics and NGOs

In accordance with our Code of Conduct we are committed to responsibility and integrity ndash including in our dealings with political parties and nonshygovernmental organizations We pursue our political interests in a way that is consistent with the positions we have expressed publicly In our work with political entities we focus on concrete issues and are open to dialog with any democratic parties

So far WACKER has not maintained a lobby within the political establishment Instead we regularly extend invitations for discussions and tours at our sites In 2009 for instance Tennesseersquos former governor Phil Bredesen visited our Burghausen site where he learned about manufacturing hyperpure polysilicon for solar applications WACKER is to construct a new polysilicon plant in Tennessee by the end of 2013

National and international associations ndash especially Europersquos CEFIC (European Chemical Inshydustry Council) the USArsquos ACC (American Chemistry Council) and Germanyrsquos VCI (Chemical Industry Association) ndash serve as a platform for our expertise Working within these bodies we examine issues ranging from plant product and occupational safety to environmental protection nanotechnology and industrial (ldquowhiterdquo) biotechnology Our experts are also active in such trade associations as Deutsche Bauchemie (German constructionshychemicals association) where issues include sustainable construction

Since 2010 WACKER has been collaborating with other photovoltaics companies to advocate manufacturing solar modules without the use of cadmium telluride By encouraging the elimination of this heavy metal we hope to ensure that solar modules are included in the EU Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS)

European Chemical Industry Councilwwwceficorg

American Chemistry Councilwwwamericanchemistrycom

German Chemical Industry Association (VCI)wwwvcide

DistinguishedthinspscientistthinspProfthinspUlrichthinspSchubertthinspofthinspthethinspTechnicalthinspUniversitythinspofthinspViennathinspreceivesthinspthethinsp2009thinspWACKERthinspSiliconethinspAward

In 2010 the European Commission approved a regional development investment grant of euro975 million for the construction of the new WACKER polysilicon plant at Nuumlnchritz ndash a project that will require a total investment of euro800 million The EU Commission anticipates that this investment will have a positive impact on regional development

WACKER is one of the founders of the ChemDelta Bavaria initiative which was established in 2007 Companies in this chemistry research and production triangle want to improve and expand the regionrsquos economic competitiveness ndash in harmony with its communities and the environment Improving the regional infrastructure is a major focus of ChemDelta Bavaria which counts WACKER and its Burghausen site as one of its cornerstones In addition to upshygrading rail services the initiativersquos infrastructure goals also include expanding the A94 freeshyway between Munich and Passau ndash a stretch that is currently only partially complete

ChemDelta Bavaria also organized an exhibition during the period under review highlightshying the regionrsquos economic prospects After its 2009 debut in the Bavarian Parliament in Munich the exhibition went on to tour through Bavaria in 2010 (Burghausen Waldkraiburg and Trostberg)

InthinsprecognitionthinspofthinspitsthinspexemplarythinspethicalthinspconductthinspWACKERthinspChemi-calsthinspKoreathinspIncthinsp(thinspWCKthinsp)thinspwasthinsphonoredthinspinthinsp2010thinspwiththinsponethinspofthinspthethinspmostthinspprestigiousthinspawardsthinspthatthinspcanthinspbethinspconferredthinspuponthinspathinspforeignthinspcom-panythinspthethinspldquoBestthinspForeignthinspCorporationthinspAwardrdquothinsp(thinspcategorythinspldquoBestthinspManufacturersrdquothinsp)thinspfromthinspthethinspKoreathinspEconomicthinspJusticethinspInstitutethinsp(thinspKEJIthinsp)thinspComprisedthinspprimarilythinspofthinspprofessorsthinspandthinspformerthinspgovernmentthinspof-ficialsthinspKEJIthinspisthinspthethinspcampaignthinsparmthinspofthinspthethinspSouththinspKoreanthinspCitizensrsquothinspCoalitionthinspforthinspEconomicthinspJusticethinsp(thinspCCEJthinsp)thinspathinspmajorthinspNGOthinspinthinspthisthinspfieldthinspThethinspKEJIthinspawardthinspcommitteersquosthinspdecisionthinsphonorsthinspWACKERthinspKoreathinspforthinspitsthinspethicalthinspleadershipthinspandthinspcompliancethinspwiththinspgovernmentthinspregula-tionsthinspldquoThisthinspisthinsponethinspofthinspthethinspmostthinspdifficultthinspawardsthinsptothinspwinthinspinthinspKoreardquothinspexplainsthinspHan-HyungthinspChothinspWCKthinspmanagingthinspdirectorthinspldquoReceivingthinspitthinspwasthinspathinspgreatthinsphonorrdquo

Children

In addition to its investments in science education for young people WACKER also helps fund social projects aimed at helping children and adolescents For the past several years for instance WACKER has supported Die Arche (The Ark) a German Christian charity that aids children and adolescents from socially disadvantaged families in German cities WACKER continued its tradition of donating to The Ark in 2009 and 2010 In each case we donated euro100000 to the charity which provides children with a warm lunch every day homework asshysistance opportunities to play games and organized outings Thanks to WACKERrsquos financial support the charity was able to expand its services during the period under review alongshyside its work with 5 to 11shyyearshyolds The Ark began offering programs for 12 to 17shyyearshyolds in 2010 WACKERrsquos commitment to The Ark goes beyond financial contributions ndash WACKER employees also contribute their free time to volunteer at the annual Ark Summer Festival

WACKERrsquos support for children and young people is not limited to the companyrsquos focus on funding for The Ark In 2009 for instance WACKER donated funds to the Bavarian Red Cross in Altoumltting to provide followshyup care for children who have undergone cancer treatment Also that year we supported the Burghausen Office of youth Welfare in its efforts to combat rightshywing extremism

ExemplarythinspConductthinspEthicsthinspAwardthinspforthinspWACKERthinspKorea

The Ark (a childrenrsquos charity German-language link only)wwwkinderprojekt- archede

Society

Disaster Aid

WACKERrsquos relief fund is dedicated to providing unbureaucratic longshyterm aid in the wake of natural disasters To date WACKER has matched all employee contributions to the relief fund whose board of directors and board of trustees work on an honorary basis

WACKERrsquos relief fund supported four major projects during the reporting period

ChinaWith a donation of RMB 1 million (euro112000) WACKERrsquos relief fund financed the reconstruction of an elementary school in Fujia a village in the Sichuan province of central China Destroyed in the 2008 earthquake and reopened in 2009 the school now bears the name WACKER Primary School and provides classroom space for over 300 students The new building was designed to withstand earthquakes measuring up to 70 on the Richter scale

HaitiWhen an earthquake devastated this Caribbean nation in January 2010 WACKER responded with an initial donation of euro50000 which grew to a total of over euro125000 The money was given to Don Bosco Jugend Dritte Welt an organization that provides relief to children and young people in developing countries It used the funds to rebuild a devastated elementary middle school in Gressier The new school can accommodate roughly 350 girls and boys between 6 and 18 years of age

PakistanTorrential monsoon rains in northwest Pakistan in July 2010 caused flooding along with mudshyslides and landslides killing thousands of people and destroying houses and crops Working with Malteser International our fund is helping rebuild an elementary school in the Swat disshytrict The new school building will provide classrooms for around 250 girls Wacker Chemie AG made an initial donation of euro50000 towards this project as well

SrithinspLankaWACKERrsquos relief fund has been supporting victims of the tsunami disaster since 2005 with employee donations helping to rebuild schoolhouses in Kosgoda and to fund instruction for four classes The fund has pledged to extend its commitment beyond 2011 to give students the opportunity to complete their high school diplomas To make this extension possible the fund initiated fundraising campaigns in 2009 and 2010 at WACKERrsquos international sites ndash and collected euro30000 in employee donations

ChildrenthinspinthinspGressierthinspHaitithinsphavethinspreasonthinsptothinspbethinspup-beatthinspagainthinspThethinspWACKERthinspRELIEFthinspFUNDthinspisthinspsupportingthinspthethinspreconstructionthinspofthinspthisthinspelementarythinspandthinsphighthinspschoolthinspthatthinspwasthinspdestroyedthinspinthinspthethinspearthquake

copy wwwmeslide Don Bosco Bonn (Germany)

Further Information

ClaudiathinspSchmittCorporatethinspVicethinspPresidentthinspControllingthinspSiltronicthinspAGthinspMunichthinspHeadquarters

ldquoIt is my aim to turn dry figures into clearly understood informationrdquo

GRI Statement

Further Information

Degree of Compliance

Page No

1thinspthinsp VisionthinspandthinspStrategy

11 thinsp Introduction by the CEO or Supervisory Board chairman thinsp thinsp thinsp 2 ndash 5

12 thinsp Key sustainability impacts risks and opportunities thinsp thinsp thinsp 27 43 61 65 66 68 77 90 91 103

2thinspthinsp OrganizationalthinspProfilethinsp

21 thinsp Name of the organization thinsp thinsp thinsp Front cover

22 thinsp Primary brands products and services thinsp thinsp thinsp 21 23

23 thinsp Business areas and operational structure thinsp thinsp thinsp 20 ndash 22

24 thinsp Location of organizationrsquos headquarters thinsp thinsp thinsp 22

25 thinsp Countries in which the organizationrsquos major operations are located thinsp thinsp thinsp 20 21

26 thinsp Nature of ownership thinsp thinsp thinsp 22 24

27 thinsp Markets thinsp thinsp thinsp 20 21 23 24

28 thinsp Scale of the reporting organization thinsp thinsp thinsp Front cover 20 24

29 thinsp Significant changes during the reporting period thinsp thinsp thinsp 17 18 85

210 thinsp Awards received in the reporting period thinsp thinsp thinsp 39 40 54 79 87 89 97 109

3thinspthinsp ReportthinspParametersthinsp

ReportthinspProfilethinsp thinsp

31 thinsp Reporting period thinsp thinsp thinsp Front cover

32 thinsp Date of most recent previous report thinsp thinsp thinsp Front cover

33 thinsp Reporting cycle thinsp thinsp thinsp Front cover

34 thinsp Contact for questions regarding the report thinsp thinsp thinsp Back cover

ReportthinspScopethinspandthinspLimitations

35 thinsp Process for defining report content thinsp thinsp thinsp Front cover 38 39

36 thinsp Boundary of the report thinsp thinsp thinsp Front cover About this Report

37 thinsp Limitations on the scope of the report thinsp thinsp thinsp Front cover

38 thinsp Joint ventures subsidiaries outsourcing thinsp thinsp thinsp Front cover 22

39 thinsp Data measurement techniques thinsp thinsp thinsp 31 44 50

310 thinsp Effect of any reshystatements of information thinsp provided in earlier reports

thinsp thinsp 43 48 51 52

311 thinsp Changes in the scope and boundary of the report thinspor in the measurement methods applied

thinsp thinsp 43 48 51

312 thinsp GRI index in tabular form with page numbers thinsp thinsp thinsp 114shy117

313 thinsp Assurance external assurance for the report thinsp thinsp thinsp This report has not been assured by

external third parties

4thinspthinsp GovernancethinspCommitmentsthinspandthinspEngagement

Governance

41 thinsp Governance structure thinsp thinsp thinsp 22

42 thinsp Independence of the Supervisory Board chairman thinsp thinsp thinsp 22

43 thinsp Governance body and or independent members of management thinsp thinsp thinsp 22

44 thinsp Mechanisms for shareholders and employees to provide thinsprecommendations to the Executive Board or Supervisory Board

thinsp thinsp 22 37 AR 45

45 thinsp Linkage between Executive Board compensation thinspand the organizationrsquos performance

thinsp thinsp 95 AR 231 ndash 233

46 thinsp Processes in place for the governance bodies thinspto ensure avoidance of conflicts of interest

thinsp thinsp 34 ndash 36

47 thinsp Expertise of the governance bodies in sustainability issues thinsp thinsp thinsp 30 31

GRIthinspIndexthinsp(thinspG3thinspIndicatorsthinsp)

GRI Index

Page No

48 thinsp Mission statements corporate values and codes of conduct thinsp thinsp thinsp 27 28 30 34

49 thinsp Procedures of the Executive Board and Supervisory thinspBoard for overseeing sustainability performance

410 thinsp Processes for evaluating the performance of the Executive Board thinsp thinsp thinsp AR 231 ndash 233

CommitmentsthinsptothinspExternalthinspInitiatives

411 thinsp Implementation of the precautionary principle thinsp thinsp thinsp 43

412 thinsp Support of external initiatives thinsp thinsp thinsp 28 29 43 62 63

413 thinsp Principal memberships in industry and business associations thinsp thinsp thinsp 28 29 80 81 108 109

StakeholderthinspEngagement

414 thinsp Stakeholder groups engaged by the organization thinsp thinsp thinsp 37

415 thinsp Selection of stakeholders thinsp thinsp thinsp Front cover About this Report 37

416 thinsp Approaches to stakeholder engagement ( type frequency ) thinsp thinsp thinsp 37 38

417 thinsp Statements on key topics and concerns raised by stakeholders thinsp thinsp thinsp 38 39

5thinspthinsp PerformancethinspIndicatorsthinsp

Economicthinsp

Management approach thinsp thinsp thinsp 21 30 31

Aspect Economic Performance

EC1 thinsp Direct economic value generated and distributed thinsp thinsp thinsp Front cover 103 AR 157

EC2 thinsp Financial implications of climate change thinsp thinsp thinsp 43 44 46 48 66 67 72 AR 67 93 127 128 152

EC3 thinsp Companyrsquos defined benefit plan obligations thinsp thinsp thinsp 95 96 AR 199 ndash 202

EC4 thinsp Financial assistance received from government thinsp thinsp thinsp 66 67 79 109

Aspect Market Presence

EC6 thinsp Spending on locallyshybased suppliers thinsp thinsp thinsp 8 104 105

EC7 thinsp Senior management hired from the local community thinsp thinsp thinsp 92

Aspect Indirect Economic Impacts

EC8 thinsp Infrastructure investments and services provided for public benefit thinsp thinsp thinsp 13 57 58 103 104 110

Environmental

Management approach thinsp thinsp thinsp 30 ndash 32 42 43

Aspect Materials

EN1 thinsp Materials used by weight or volume thinsp thinsp thinsp 14 45 46 50 53

EN2 thinsp Percentage of materials used that are recycled input materials thinsp thinsp thinsp 45 46 52 53

Aspect Energy

EN3 thinsp Direct energy consumption by primary energy sources thinsp thinsp thinsp 46 48

EN4 thinsp Indirect energy consumption by primary source thinsp thinsp thinsp 46 48

EN5 thinsp Energy savings thinsp 46 47

EN6 thinsp Energy-efficient products and services thinsp 66 ndash 74

Aspect Water

EN8 thinsp Total water withdrawal by source thinsp thinsp thinsp 50 51

Aspect Biodiversity

EN11 thinsp Use of land in protected areas thinsp thinsp thinsp 54 55

EN12 thinsp Significant impacts of activities in protected areas thinsp thinsp thinsp 54 55

EN14 thinsp Strategies on protecting biodiversity thinsp 54 55

Aspect Emissions Effluents and Waste

EN16 thinsp Direct and indirect greenhouse gas emissions thinsp thinsp thinsp 48 ndash 50

EN17 thinsp Other relevant greenhouse gas emissions thinsp( e g caused by business trips )

thinsp thinsp 49 50

Further Information

Page No

EN19 thinsp Emissions of ozoneshydepleting substances by weight thinsp thinsp thinsp 50

EN20 thinsp NOx SOx and other significant air emissions by weight thinsp thinsp thinsp 49

EN21 thinsp Water discharge thinsp thinsp thinsp 50 51

EN22 thinsp Waste by type and disposal method thinsp thinsp thinsp 52 53

EN23 thinsp Releases of hazardous substances by number and volume thinsp thinsp thinsp 82

Aspect Products and Services

EN26 thinsp Initiatives to mitigate environmental impacts of thinspproducts and services

EN27 thinsp Percentage of products and packaging that are reclaimed thinsp thinsp thinsp 45 53

Aspect Compliance

EN28 thinsp Finessanctions for nonshycompliance with environmental thinsp laws and regulations

thinsp thinsp 36

SocialthinspPerformancethinsp

LaborthinspPractices

Management approach thinsp thinsp thinsp 30 ndash 32 76 77 84 90 98

Aspect Employment

LA1 thinsp Total workforce by employment type and region thinsp thinsp thinsp 85 86 94

LA2 thinsp Total employee turnover by age group gender and region thinsp thinsp thinsp 96

LA3 thinsp Benefits provided to full-time employees only thinsp 96

Aspect Labor Management Relations

LA4 thinsp Percentage of employees covered by collective thinspbargaining agreements

thinsp thinsp 97 98

LA5 thinsp Minimum notice period( s ) regarding significant operational changes thinsp thinsp thinsp 86

Aspect Occupational Health and Safety

LA7 thinsp Injuries absenteeism and workshyrelated fatalities thinsp thinsp thinsp 78 99

LA8 thinsp Risk control and programs with respect to serious diseases thinsp thinsp thinsp 98 ndash 100

Aspect Training and Education

LA10 thinsp Hours of training by employee category thinsp thinsp thinsp 88

LA11 thinsp Skills management and lifelong learning thinsp 86 ndash 91

LA12 thinsp Performance and career development reviews thinsp 88 89

Aspect Diversity and Equal Opportunity

LA13 thinsp Composition of senior management and employee thinspstructure ( e g age genderculture )

thinsp thinsp 90 ndash 93 AR 222 ndash 224

LA14 thinsp Compensation by gender and employee category thinsp thinsp thinsp 92 93

HumanthinspRights

Aspect Investment and Procurement Practices

HR1 thinsp Investment agreements that include human rights thinsp clauses or screening

thinsp thinsp 36 37

HR2 thinsp Percentage of suppliers that have undergone screening on thinsphuman rights and actions taken

thinsp thinsp 36 37

Aspect NonshyDiscrimination

HR4 thinsp Incidents of discrimination and actions taken thinsp thinsp thinsp 36

Aspect Freedom of Association and Collective Bargaining

HR5 thinsp Operations that may be at significant risk thinsp thinsp thinsp 29 97 98

Aspect Child Labor

HR6 thinsp Operations with significant risk and measures taken thinsp thinsp thinsp 29 36

Aspect Forced and Compulsory Labor

Page No

Society

Management approach thinsp thinsp thinsp 30 31 34 35 102 ndash 104

Aspect Community

SO1 thinsp Policy to manage impacts on local communities thinsp thinsp thinsp 8 15 54 ndash 57 85 86 103 104

Aspect Corruption

SO2 thinsp Percentage and number of business units analyzed thinsp thinsp thinsp 35 36

SO3 thinsp Percentage of employees trained in antishycorruption procedures thinsp thinsp thinsp 36

SO4 thinsp Actions taken in response to incidents of corruption thinsp thinsp thinsp 36

Aspect Public Policy

SO5 thinsp Public policy positions and participation in public thinsppolicy development and lobbying

thinsp thinsp 108 109

Aspect AntishyCompetitive Behavior

SO7 thinsp Legal actions for anti-competitive behavior thinsp 36

Aspect Compliance

SO8 thinsp Fines sanctions for nonshycompliance with laws and regulations thinsp thinsp thinsp 36

ProductthinspResponsibilitythinsp(ProductthinspStewardship)

Management approach thinsp thinsp thinsp 30 31 60 ndash 62 65 66

Aspect Customer Health and Safety

PR1 thinsp Product life cycle stages for which health thinspand safety impacts are assessed

thinsp thinsp 61 65

Aspect Product and Service Labeling

PR3 thinsp Principles procedures related to product and service information thinsp thinsp thinsp 61 ndash 64

PR5 thinsp Customer satisfaction thinsp 36 39 40

Aspect Marketing Communications

PR6 thinsp Programs for adherence to laws and voluntary codes thinsprelated to marketing communications

thinsp thinsp 61

Aspect Compliance

PR9 thinsp Significant fines for nonshycompliance with laws and regulations thinspconcerning the use of products and services

thinsp thinsp 36

This indicator is fully complied with This indicator is partially complied with

AR = Annual Report 2010Additional indicators are printed in italicsEvery single core indicator is presented Gaps in numeration need to be attributed to the fact that only relevant additional indicators are presented in the indexA detailed GRI index (plus explanations on ldquopartialrdquo compliance) can be found online at wwwwackercomsustainabilityreport

C C + B B + A A +

Self Declared thinsp thinsp thinsp thinsp thinsp thinsp thinsp

Third Party Checked thinsp thinsp thinsp thinsp thinsp thinsp thinsp

GRI Checked thinsp thinsp thinsp thinsp thinsp thinsp thinsp

GRIthinspApplicationthinspLevel

Further Information

Glossary

BBiodiversityIn 1992 the United Nations Conference on Environment and Development adopted the UN Convention on Biological Diversity (CBD) This convention addresses the preservation of biological diversity (genes species and habitats) the sustainable exploitation of such diversity as well as access rules to and the sharing of benefits from genetic resources (access and benefit sharing) So far the CBD has been signed by 168 countries and the EU (with Germany becoming a signatory in 1993) In May 2011 the EU Commission published its biodiversity strategy to 2020

BiotechnologyBiotech processes use living cells or enshyzymes to transform and produce substances Depending on the application a distinction is made between red green and white bioshytechnology Red biotechnology medical and pharmaceutical applications Green biotechshynology agricultural applications White bioshytechnology biotechshybased products and industrial processes e g in the chemical textile and food industries

CCarbonthinspdioxidethinsp(thinspCO2thinsp)This gas naturally constitutes 004 of air Carbon dioxide is generated during the combustion of coal natural gas and other organic substances As a greenhouse gas in the atmosphere it contributes to global warming Since the start of industrialization (ca 1850) its concentration in air has risen from approximately 300 to 390 ppm (parts per million) This value is increasing by around 2 ppm every year

Chemicalthinspoxygenthinspdemandthinsp(thinspCODthinsp)COD is a measure of wastewater contaminashytion This parameter defines the amount of oxygen necessary to fully oxidize all organic material in wastewater

Chlorinatedthinsphydrocarbonsthinsp(thinspCHCsthinsp)Organic compounds containing chlorine They are used for example in the manushyfacture of plastics and solvents CHCs are chemically stable and fatshysoluble some of them are environmental toxins

ChlorosilanesCompounds of silicon chlorine and hydroshygen The semiconductor industry mainly uses trichlorosilane to make polysilicon and for the epitaxial deposition of silicon

CombinedthinspheatthinspandthinsppowerthinspplantCombined heat and power (CHP) plants genshyerate both electricity and useful heat With this system the input energy (e g fuel oil or natural gas) can be used much more effishyciently than in conventional systems with separate facilities Thanks to this conservation of primary energy CHP plants emit signifishycantly less carbon dioxide than conventional power plants

CyclodextrinsCyclodextrins belong to the family of cyclic oligosaccharides (i e ringshyshaped sugar molecules) They are able to encapsulate foreign substances such as fragrances and to release active ingredients at a controlled rate WACKER BIOSOLUTIONS produces and markets cyclodextrins

CysteineCysteine is a sulfurshycontaining amino acid It belongs to the nonshyessential amino acids as it can be formed in the body It is used for example as an additive in food and cough mixtures Cysteine and its derivatives are a business field at WACKER BIOSOLUTIONS

DDispersiblethinsppolymerthinsppowdersCreated by drying dispersions in spray or disc dryers VINNAPASreg polymer powders from WACKER POLYMERS are recommended as binders in the construction industry e g for tile adhesives selfshyleveling compounds and repair mortars The powders improve adhesion cohesion flexibility and flexural strength as well as watershyretention and proshycessing properties

Further Information

ContactsCorporate SustainabilityDr Jutta MatreuxWacker Chemie AGJohannes-Hess-Straszlige 2484489 Burghausen GermanyTel + 49 8677 83 - 86321sustainabilitywackercom

Corporate CommunicationsJoachim Zdzieblo Wacker Chemie AGHanns-Seidel-Platz 481737 Muumlnchen GermanyTel + 49 89 6279 -1165sustainabilitywackercom

Wacker Chemie AG Hanns-Seidel-Platz 481737 Muumlnchen GermanyTel + 49 89 6279 - 0Fax + 49 89 6279 -1770www wackercom

WACKER at a Glance

About this Report

Table of Contents

Milestones 2008 - 2010

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

2010 2009 2008

Operating costs ( euro million ) 65 65 68

Investments ( euro million ) 12 9 13

Emissions

CO2 carbon dioxide ( t ) 985694 967992 975931

NOx nitrogen oxides ( t ) 926 963 997

NMVOC non-methane volatile organic compounds ( t ) 415 383 501

COD chemical oxygen demand ( t ) 1820 2730 4782

Waste ( total ) ( t ) 125550 144290 161620

Water consumption ( m3 ) 252151000 264532000 241286375

Energy

Electricity consumption ( TWh ) 38 27 24

Primary energy ( total ) ( TWh ) 611 561 561

Occupational Safety

Accident rate accidents per 1 million hours worked 43 40 37

Employees

Female employees groupwide ( ) 218 220 220

Women in third-level management groupwide ( ) 192 186 187

Women as executive personnel groupwide ( ) 68 55 64

Non-German employees Germany ( ) 126 130 135

Fluctuation rate groupwide ( ) 25 25 29

Society

Donations ( euro thousand ) 1011 924 1033

Sponsoring ( euro thousand ) 1150 466 1090

CoverCompanies can only be profitable in the long term if they take their responsibility toward the environment and society seriously In this report we introduce you to WACKER employees who make their own contribution to sustaina-bility at completely different parts of the company

Results Return

Sales 47484 37193 42981

EBITDA1 11945 6067 10552

EBITDA margin 2 ( ) 252 163 246

EBIT 3 7646 268 6479

EBIT margin 2 ( ) 161 07 151

ROCE ( ) 248 09 257

Total assets 55012 45419 46251

Equity 24468 19424 20828

Equity ratio ( ) 445 428 450

Employees

WACKER at a Glance

About this Report

Further Information

True Neighbors

Feature

On the Right Track

Feature

Milestones

About WACKER

Germany

18thinspFranceLyon

20thinspItalyMilan

23thinspSwedenSolna

26thinspUkraineKiev

Europe

About WACKER

Legal Structure

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

wwwwackercom

22 SILTRONIC

About WACKER

Germany thinsp

The Americas thinsp

Asia thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

Goals and Outlook

NewthinspGoals

Outlookthinsp

Corporate Policies

Business Principles

Responsible Carereg

Organization

EHS 1 and PS 2

Strategy Meeting

Functions

2010 2009 2008

Location Company

2010 2009 2008

0 1 2 3 4 5

+ndash

Transport routes

Product safety

ActionthinspMatrix

Goals and Outlook

NewthinspGoal

Outlookthinsp

20101 2009 2008

Recycle HCI

Recycle HCl

Chlorine

Methanol

Fine chemicals

Silicon wafers

Tetrachlorosilane

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

TWh 2010 2009 2008

8 hydropower 2

55 fossil fuels 3

31 nuclear energy

Energy

t 2010 2009 2008

AirthinspPollutants

t CO2 e2 CO2

2009 2008

2010 2009 2008

t 2010 2009 2008

Waste1

Sony thinsp

Goals and Outlook

NewthinspGoal

Outlookthinsp

Product Safety

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

( gt 1000 t a )

( 100 ndash1000 t a )

( 1ndash100 t a )

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

GHS labeling thinsp

Mixturesthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Directive

Transitional period

damage

Product Stewardship

Masonry

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

Goals and Outlook

NewthinspGoal

Outlookthinsp

Prevention

2010 2009 2008

88 00 thinsp 105

NPCAFCST thinsp

Incident Management

2010 2009 2008

Site Incident

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Site Incident

thinsp

CologneGermany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Zhangjiagang China

thinsp

Burghausen Germany

Employees

Goals and Outlook

NewthinspGoals

Outlookthinsp

Employees

2010 2009 2008

Employees

2010 2009 2008

Employees

2010 2009 2008

53 53 thinsp 50

Trainees

Employees

Focus Program

Successor planning

Coaching

Age 15 35 55 75

thinsp

000510152025303540

early age

Life and Career

Employees

2010 2009 2008

Employees

2010 2009 2008

1 No data available

Employees

2010 2009 2008

Employees

Health Protection

2010 2009 2008

SicknessthinspRate1

Employees

Society

Goal and Outlook

NewthinspGoal

Outlookthinsp

Society

Neighbors

Schools

Society

Universities

Society

Politics and NGOs

Children

Society

Disaster Aid

Further Information

GRI Statement

Further Information

Page No

Governance

GRI Index

Page No

Economicthinsp

Environmental

Aspect Materials

Aspect Energy

Aspect Water

Aspect Biodiversity

thinsp thinsp 49 50

Further Information

Page No

Aspect Compliance

thinsp thinsp 36

Aspect Employment

thinsp thinsp 97 98

HumanthinspRights

thinsp thinsp 36 37

Aspect Child Labor

Page No

Society

Aspect Community

Aspect Corruption

Aspect Compliance

thinsp thinsp 61 65

thinsp thinsp 61

Aspect Compliance

thinsp thinsp 36

C C + B B + A A +

Further Information

Glossary

Further Information

WACKER at a Glance

About this Report

Table of Contents

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

Results Return

Sales 47484 37193 42981

EBITDA1 11945 6067 10552

EBITDA margin 2 ( ) 252 163 246

EBIT 3 7646 268 6479

EBIT margin 2 ( ) 161 07 151

ROCE ( ) 248 09 257

Total assets 55012 45419 46251

Equity 24468 19424 20828

Equity ratio ( ) 445 428 450

Employees

WACKER at a Glance

About this Report

Further Information

True Neighbors

Feature

On the Right Track

Feature

Milestones

About WACKER

Germany

18thinspFranceLyon

20thinspItalyMilan

23thinspSwedenSolna

26thinspUkraineKiev

Europe

About WACKER

Legal Structure

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

wwwwackercom

22 SILTRONIC

About WACKER

Germany thinsp

The Americas thinsp

Asia thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

Goals and Outlook

NewthinspGoals

Outlookthinsp

Corporate Policies

Business Principles

Responsible Carereg

Organization

EHS 1 and PS 2

Strategy Meeting

Functions

2010 2009 2008

Location Company

2010 2009 2008

0 1 2 3 4 5

+ndash

Transport routes

Product safety

ActionthinspMatrix

Goals and Outlook

NewthinspGoal

Outlookthinsp

20101 2009 2008

Recycle HCI

Recycle HCl

Chlorine

Methanol

Fine chemicals

Silicon wafers

Tetrachlorosilane

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

TWh 2010 2009 2008

8 hydropower 2

55 fossil fuels 3

31 nuclear energy

Energy

t 2010 2009 2008

AirthinspPollutants

t CO2 e2 CO2

2009 2008

2010 2009 2008

t 2010 2009 2008

Waste1

Sony thinsp

Goals and Outlook

NewthinspGoal

Outlookthinsp

Product Safety

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

( gt 1000 t a )

( 100 ndash1000 t a )

( 1ndash100 t a )

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

GHS labeling thinsp

Mixturesthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Directive

Transitional period

damage

Product Stewardship

Masonry

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

Goals and Outlook

NewthinspGoal

Outlookthinsp

Prevention

2010 2009 2008

88 00 thinsp 105

NPCAFCST thinsp

Incident Management

2010 2009 2008

Site Incident

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Site Incident

thinsp

CologneGermany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Zhangjiagang China

thinsp

Burghausen Germany

Employees

Goals and Outlook

NewthinspGoals

Outlookthinsp

Employees

2010 2009 2008

Employees

2010 2009 2008

Employees

2010 2009 2008

53 53 thinsp 50

Trainees

Employees

Focus Program

Successor planning

Coaching

Age 15 35 55 75

thinsp

000510152025303540

early age

Life and Career

Employees

2010 2009 2008

Employees

2010 2009 2008

1 No data available

Employees

2010 2009 2008

Employees

Health Protection

2010 2009 2008

SicknessthinspRate1

Employees

Society

Goal and Outlook

NewthinspGoal

Outlookthinsp

Society

Neighbors

Schools

Society

Universities

Society

Politics and NGOs

Children

Society

Disaster Aid

Further Information

GRI Statement

Further Information

Page No

Governance

GRI Index

Page No

Economicthinsp

Environmental

Aspect Materials

Aspect Energy

Aspect Water

Aspect Biodiversity

thinsp thinsp 49 50

Further Information

Page No

Aspect Compliance

thinsp thinsp 36

Aspect Employment

thinsp thinsp 97 98

HumanthinspRights

thinsp thinsp 36 37

Aspect Child Labor

Page No

Society

Aspect Community

Aspect Corruption

Aspect Compliance

thinsp thinsp 61 65

thinsp thinsp 61

Aspect Compliance

thinsp thinsp 36

C C + B B + A A +

Further Information

Glossary

Further Information

WACKER at a Glance

About this Report

Table of Contents

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

About this Report

Further Information

True Neighbors

Feature

On the Right Track

Feature

Milestones

About WACKER

Germany

18thinspFranceLyon

20thinspItalyMilan

23thinspSwedenSolna

26thinspUkraineKiev

Europe

About WACKER

Legal Structure

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

wwwwackercom

22 SILTRONIC

About WACKER

Germany thinsp

The Americas thinsp

Asia thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

Goals and Outlook

NewthinspGoals

Outlookthinsp

Corporate Policies

Business Principles

Responsible Carereg

Organization

EHS 1 and PS 2

Strategy Meeting

Functions

2010 2009 2008

Location Company

2010 2009 2008

0 1 2 3 4 5

+ndash

Transport routes

Product safety

ActionthinspMatrix

Goals and Outlook

NewthinspGoal

Outlookthinsp

20101 2009 2008

Recycle HCI

Recycle HCl

Chlorine

Methanol

Fine chemicals

Silicon wafers

Tetrachlorosilane

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

TWh 2010 2009 2008

8 hydropower 2

55 fossil fuels 3

31 nuclear energy

Energy

t 2010 2009 2008

AirthinspPollutants

t CO2 e2 CO2

2009 2008

2010 2009 2008

t 2010 2009 2008

Waste1

Sony thinsp

Goals and Outlook

NewthinspGoal

Outlookthinsp

Product Safety

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

( gt 1000 t a )

( 100 ndash1000 t a )

( 1ndash100 t a )

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

GHS labeling thinsp

Mixturesthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Directive

Transitional period

damage

Product Stewardship

Masonry

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

Goals and Outlook

NewthinspGoal

Outlookthinsp

Prevention

2010 2009 2008

88 00 thinsp 105

NPCAFCST thinsp

Incident Management

2010 2009 2008

Site Incident

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Site Incident

thinsp

CologneGermany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Zhangjiagang China

thinsp

Burghausen Germany

Employees

Goals and Outlook

NewthinspGoals

Outlookthinsp

Employees

2010 2009 2008

Employees

2010 2009 2008

Employees

2010 2009 2008

53 53 thinsp 50

Trainees

Employees

Focus Program

Successor planning

Coaching

Age 15 35 55 75

thinsp

000510152025303540

early age

Life and Career

Employees

2010 2009 2008

Employees

2010 2009 2008

1 No data available

Employees

2010 2009 2008

Employees

Health Protection

2010 2009 2008

SicknessthinspRate1

Employees

Society

Goal and Outlook

NewthinspGoal

Outlookthinsp

Society

Neighbors

Schools

Society

Universities

Society

Politics and NGOs

Children

Society

Disaster Aid

Further Information

GRI Statement

Further Information

Page No

Governance

GRI Index

Page No

Economicthinsp

Environmental

Aspect Materials

Aspect Energy

Aspect Water

Aspect Biodiversity

thinsp thinsp 49 50

Further Information

Page No

Aspect Compliance

thinsp thinsp 36

Aspect Employment

thinsp thinsp 97 98

HumanthinspRights

thinsp thinsp 36 37

Aspect Child Labor

Page No

Society

Aspect Community

Aspect Corruption

Aspect Compliance

thinsp thinsp 61 65

thinsp thinsp 61

Aspect Compliance

thinsp thinsp 36

C C + B B + A A +

Further Information

Glossary

Further Information

WACKER at a Glance

About this Report

Table of Contents

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

Further Information

True Neighbors

Feature

On the Right Track

Feature

Milestones

About WACKER

Germany

18thinspFranceLyon

20thinspItalyMilan

23thinspSwedenSolna

26thinspUkraineKiev

Europe

About WACKER

Legal Structure

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

wwwwackercom

22 SILTRONIC

About WACKER

Germany thinsp

The Americas thinsp

Asia thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

Goals and Outlook

NewthinspGoals

Outlookthinsp

Corporate Policies

Business Principles

Responsible Carereg

Organization

EHS 1 and PS 2

Strategy Meeting

Functions

2010 2009 2008

Location Company

2010 2009 2008

0 1 2 3 4 5

+ndash

Transport routes

Product safety

ActionthinspMatrix

Goals and Outlook

NewthinspGoal

Outlookthinsp

20101 2009 2008

Recycle HCI

Recycle HCl

Chlorine

Methanol

Fine chemicals

Silicon wafers

Tetrachlorosilane

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

TWh 2010 2009 2008

8 hydropower 2

55 fossil fuels 3

31 nuclear energy

Energy

t 2010 2009 2008

AirthinspPollutants

t CO2 e2 CO2

2009 2008

2010 2009 2008

t 2010 2009 2008

Waste1

Sony thinsp

Goals and Outlook

NewthinspGoal

Outlookthinsp

Product Safety

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

( gt 1000 t a )

( 100 ndash1000 t a )

( 1ndash100 t a )

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

GHS labeling thinsp

Mixturesthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Directive

Transitional period

damage

Product Stewardship

Masonry

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

Goals and Outlook

NewthinspGoal

Outlookthinsp

Prevention

2010 2009 2008

88 00 thinsp 105

NPCAFCST thinsp

Incident Management

2010 2009 2008

Site Incident

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Site Incident

thinsp

CologneGermany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Zhangjiagang China

thinsp

Burghausen Germany

Employees

Goals and Outlook

NewthinspGoals

Outlookthinsp

Employees

2010 2009 2008

Employees

2010 2009 2008

Employees

2010 2009 2008

53 53 thinsp 50

Trainees

Employees

Focus Program

Successor planning

Coaching

Age 15 35 55 75

thinsp

000510152025303540

early age

Life and Career

Employees

2010 2009 2008

Employees

2010 2009 2008

1 No data available

Employees

2010 2009 2008

Employees

Health Protection

2010 2009 2008

SicknessthinspRate1

Employees

Society

Goal and Outlook

NewthinspGoal

Outlookthinsp

Society

Neighbors

Schools

Society

Universities

Society

Politics and NGOs

Children

Society

Disaster Aid

Further Information

GRI Statement

Further Information

Page No

Governance

GRI Index

Page No

Economicthinsp

Environmental

Aspect Materials

Aspect Energy

Aspect Water

Aspect Biodiversity

thinsp thinsp 49 50

Further Information

Page No

Aspect Compliance

thinsp thinsp 36

Aspect Employment

thinsp thinsp 97 98

HumanthinspRights

thinsp thinsp 36 37

Aspect Child Labor

Page No

Society

Aspect Community

Aspect Corruption

Aspect Compliance

thinsp thinsp 61 65

thinsp thinsp 61

Aspect Compliance

thinsp thinsp 36

C C + B B + A A +

Further Information

Glossary

Further Information

WACKER at a Glance

About this Report

Table of Contents

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

True Neighbors

Feature

On the Right Track

Feature

Milestones

About WACKER

Germany

18thinspFranceLyon

20thinspItalyMilan

23thinspSwedenSolna

26thinspUkraineKiev

Europe

About WACKER

Legal Structure

WACKER BIOSOLUTIONS

WACKER SILICONES

WACKER POLyMERS

WACKER POLySILICON

SILTRONIC

Business Divisions

wwwwackercom

22 SILTRONIC

About WACKER

Germany thinsp

The Americas thinsp

Asia thinsp

Groupthinspthinsp

thinsp 9486

thinsp 10082

thinsp 8529

thinsp 13628

thinsp 1256

thinsp 42981

Goals and Outlook

NewthinspGoals

Outlookthinsp

Corporate Policies

Business Principles

Responsible Carereg

Organization

EHS 1 and PS 2

Strategy Meeting

Functions

2010 2009 2008

Location Company

2010 2009 2008

0 1 2 3 4 5

+ndash

Transport routes

Product safety

ActionthinspMatrix

Goals and Outlook

NewthinspGoal

Outlookthinsp

20101 2009 2008

Recycle HCI

Recycle HCl

Chlorine

Methanol

Fine chemicals

Silicon wafers

Tetrachlorosilane

Electrical power

Rock salt

Hyperpure silicon

Sodium hydroxide

Silica

TWh 2010 2009 2008

8 hydropower 2

55 fossil fuels 3

31 nuclear energy

Energy

t 2010 2009 2008

AirthinspPollutants

t CO2 e2 CO2

2009 2008

2010 2009 2008

t 2010 2009 2008

Waste1

Sony thinsp

Goals and Outlook

NewthinspGoal

Outlookthinsp

Product Safety

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

thinsp thinsp

thinsp

( gt 1000 t a )

( 100 ndash1000 t a )

( 1ndash100 t a )

DecDec

REACH takes effect

Jun JunJun Jun

Preregistration 2

Registration1

Jan 1 2009 Dec 1 2010 June 1 2015

Substances thinsp

GHS labeling thinsp

Mixturesthinsp

GHS labeling thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

thinsp

thinsp thinsp

Transitional period

GHS regulation

Directive

Transitional period

damage

Product Stewardship

Masonry

Insulation board

Reinforcing mortar

Glassshyfiber mesh

Reinforcing mortar

EIFS plaster

Screw anchor

Goals and Outlook

NewthinspGoal

Outlookthinsp

Prevention

2010 2009 2008

88 00 thinsp 105

NPCAFCST thinsp

Incident Management

2010 2009 2008

Site Incident

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Site Incident

thinsp

CologneGermany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Burghausen Germany

thinsp

Zhangjiagang China

thinsp

Burghausen Germany

Employees

Goals and Outlook

NewthinspGoals

Outlookthinsp

Employees

2010 2009 2008

Employees

2010 2009 2008

Employees

2010 2009 2008

53 53 thinsp 50

Trainees

Employees

Focus Program

Successor planning

Coaching

Age 15 35 55 75

thinsp

000510152025303540

early age

Life and Career

Employees

2010 2009 2008

Employees

2010 2009 2008

1 No data available

Employees

2010 2009 2008

Employees

Health Protection

2010 2009 2008

SicknessthinspRate1

Employees

Society

Goal and Outlook

NewthinspGoal

Outlookthinsp

Society

Neighbors

Schools

Society

Universities

Society

Politics and NGOs

Children

Society

Disaster Aid

Further Information

GRI Statement

Further Information

Page No

Governance

GRI Index

Page No

Economicthinsp

Environmental

Aspect Materials

Aspect Energy

Aspect Water

Aspect Biodiversity

thinsp thinsp 49 50

Further Information

Page No

Aspect Compliance

thinsp thinsp 36

Aspect Employment

thinsp thinsp 97 98

HumanthinspRights

thinsp thinsp 36 37

Aspect Child Labor

Page No

Society

Aspect Community

Aspect Corruption

Aspect Compliance

thinsp thinsp 61 65

thinsp thinsp 61

Aspect Compliance

thinsp thinsp 36

C C + B B + A A +

Further Information

Glossary

Further Information

WACKER at a Glance

About this Report

Table of Contents

About WACKER


Legal Structure






Corporate Policies

Business Principles


Organization






Product Safety

Product Stewardship


Prevention

Incident Management


Employees


Life and Career



Health Protection

Society

Neighbors

Schools

Universities

Politics and NGOs

Children

Disaster Aid

Further Information

GRI Statement

GRI Index

Glossary

Documents

Sustainability Report AG 2009/2010