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HEXION SPECIALTY CHEMICALS PLANS BRAZIL EXPANSION

August 14, 2008
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Hexion Specialty Chemicals Inc. has announced that its Brazilian subsidiary, Hexion Quimica Industria e Comercio Ltda., has begun construction of a formaldehyde and resins manufacturing complex to serve the rapidly growing engineered wood products market in southern Brazil.

Hexion's Board of Directors recently approved the construction of a world-scale formaldehyde and resins manufacturing complex in Montenegro, Brazil, with a rated annual capacity of 450,000 metric tons. Both phenol formaldehyde resins and urea formaldehyde resins will be produced. The facility will include manufacturing technology enabling it to produce leading-edge resins that meet the highest environmental requirements, such as the E-1 and E-0 standards for low-emitting resins. The facility is expected to begin operations in the second quarter of 2009.

"Hexion is a recognized market and technology leader in forest product resins, and this expansion will enable us to efficiently serve our customers as they grow and expand their operations," said Luiz Cintra, vice president, Latin America, Hexion.

Manufacturing of forest products such as particleboard and MDF for furniture and plywood for structural applications is expected to grow rapidly in Latin America over the next five years, Cintra said. Building formaldehyde and resins production capability in the region will enable Hexion to supply resin systems critical to making those products while significantly reducing shipping costs, he added. Hexion currently has three other manufacturing facilities in Brazil, located in Curitiba, Cotia and Paulinia, as well as administrative sales offices in Sao Paulo.

For more information, visit www.hexion.com.

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