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Headwaters Incorporated Joint Venture Brings Additional Production Capacity for Hydrogen Peroxide Plant in Korea

Posted on: Monday, 14 January 2008, 12:00 CST

HEADWATERS INCORPORATED (NYSE:HW) and Evonik Industries AG (formerly Degussa AG) have substantially increased production capacity for hydrogen peroxide at the facility operated by their joint venture in Ulsan, Korea. HeadwatersEvonik acquired this facility from the Finnish company Kemira Oyi, Helsinki, in 2006. Using proprietary technology from Evonik, it has more than doubled capacity from the original level of 34,000 metric tons p.a. within a year.

The hydrogen peroxide (H2O2) produced in Ulsan will be supplied to customers in Korea and to the adjacent facility operated by the Seoul-based company SKC. Dr. Bing Zhou, Ph.D., Vice President of Headwaters Technology Innovations Group, commented, "The start-up of the additional production capacity for hydrogen peroxide in Korea brings us a good deal closer to providing a platform for the future commercialization of our direct synthesis technology."

In the next few months, SKC will start up one of the world's first production facilities for propylene oxide (PO) based on the HPPO process. Hydrogen peroxide and propylene are the starting products for this low-cost, environmentally friendly method of producing propylene oxide, which is used in the manufacture of polyurethane. Polyurethane is used primarily for cushioning and instrument panels for automobiles. SKC has acquired a license for the HPPO process, which was developed by Evonik and Uhde, Dortmund, Germany.

Dr. Thomas Haeberle, Head of Evonik's Industrial Chemicals Business Unit, stated, "Joint development of innovative technologies enables us to enter new areas of business in collaboration with established partners. One example is industrial use of the bleaching and oxidation agent hydrogen peroxide in chemical synthesis reactions." To provide a long-term basis for this strategy, HeadwatersEvonik is currently working on a new catalytic direct synthesis route for the production of hydrogen peroxide.

Evonik Industries

Evonik Industries AG is the creative industrial group which operates in three highly profitable, promising business areas: Chemicals, Energy and Real Estate. Evonik is a global leader in specialty chemicals, an expert in power generation from hard coal and renewable energies, and one of the largest private residential real estate companies in Germany. Evonik Industries is active in over 100 countries around world. In fiscal 2006 it employed approximately 43,000 employees and generated sales of €14.8 billion and operating profit (EBIT) of over €1.2 billion.

About Headwaters Incorporated

Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. Headwaters is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building materials businesses, the Company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

Forward Looking Statements

Certain statements contained in this report are forward-looking statements within the meaning of federal securities laws and Headwaters intends that such forward-looking statements be subject to the safe-harbor created thereby. Forward-looking statements include Headwaters' expectations as to the managing and marketing of coal combustion products, the production and marketing of building materials and products, the licensing of technology and chemical sales to alternative fuel facilities, the receipt of product sales, license fees and royalty revenues, which are subject to tax credit phase out risks, the development, commercialization, and financing of new technologies and other strategic business opportunities and acquisitions, and other information about Headwaters. Such statements that are not purely historical by nature, including those statements regarding Headwaters' future business plans, the operation of facilities, the availability of tax credits in an environment of high oil prices and potential tax credit phase out, the availability of feedstocks, and the marketability of the coal combustion products, building products, and synthetic fuel, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and our future results that are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Actual results may vary materially from such expectations. Words such as "expects,""anticipates,""targets,""goals,""projects,""believes,""seeks,""estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances, are forward-looking. In addition to matters affecting the coal combustion product, alternative fuel, and building products industries or the economy generally, factors which could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the captions entitled "Forward-looking Statements" and "Risk Factors" in Item 7 in Headwaters' Annual Report on Form 10-K for the fiscal year ended September 30, 2007, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses.

Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that our results of operations will not be adversely affected by such factors. Unless legally required, we undertake no obligation to revise or update any forward-looking statements for any reason. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Our internet address is www.headwaters.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our reports can be accessed through the investor relations section of our web site.

Source: Business Wire

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