BAD HOMBURG, Germany--(BUSINESS WIRE)--ALTANA Chemie AG, the specialty chemicals business of ALTANA AG (NYSE:AAA) (FWB:ALT), announced today that it has formed an exclusive global partnership with Nanophase Technologies Corporation (Nasdaq:NANX), a technology leader in nanomaterials and nanoengineered products. The companies intend to start product co-development in a defined field of application comprising paints, coatings and plastics and expect initial market introductions of developed products in the course of 2004. In addition, ALTANA Chemie has invested US $10 million in Nanophase common stock, trading of which will be restricted for a period of two years. The current stake of 7% will make ALTANA Chemie the largest industrial investor of Nanophase.

The partnership will collaborate in developing nanomaterials for use in, for example, general industrial coatings, architectural coatings, coil coatings, automotive OEM and refinish coatings, printing inks, duroplastics and thermoplastics, consumer goods packaging, and electrical insulation applications. Based on the agreement, ALTANA Chemie will have exclusive access to Nanophase's technology within the field of application. The agreement has a term of eight years.

ALTANA Chemie's technology driven specialty chemicals businesses are focussing primarily on managing surface properties, which are achieved and controlled by taking benefit from both chemical and physical effects. To this end, nanotechnology will open up a whole new dimension of innovative, tailored solutions for our target industries.

"With this strategic investment we are taking a significant step into the field of nanotechnology. Nanocomposites will be a key driver in the future for innovative products in coatings, plastics or electrical insulation applications and will help to safeguard the leading competitive positions of our business units," said Dr. Matthias L. Wolfgruber, Memberof the Management Board of ALTANA AG and CEO of ALTANA Chemie AG.

"We are delighted to become a development and market partner with a company of ALTANA's caliber," commented Joseph Cross, Nanophase's President and CEO. "Based on market studies, the demand for nanocomposites in coatings is expected to be a significant growth market. Nanophase's technologies, coupled with ALTANA's expertise and market access, are a solid combination in this area."
ALTANA Chemie intends to bolster and expand its leading position in all major markets with innovative solutions for customers. Therefore R&D expenses, which are already higher than the industry average, will be increased from currently 5% to 6% of sales and have more than doubled in the last ten years. Almost 20% of all employees work in research, development and technical service laboratories.

About Nanotechnology

Nanotechnology describes different types of research and development where structures with dimensions of typically less than 100 nanometers strongly influence properties of materials. In chemistry nanotechnology can be used to manufacture tailor-made products with unique performance attributes.

About Nanophase

Nanophase Technologies (NANX), www.nanophase.com, provides innovative nanoengineered solutions for multiple industrial product applications. Using a platform of patented and proprietary integrated nanomaterial technologies, the company creates products with unique performance attributes from two ISO 9001:2000 facilities. Nanophase delivers commercial quantity and quality nanoparticles, coated nanoparticles, and nanoparticle dispersions in a variety of media. The company has 23 United States patents and patent applications and 27 foreign patents and patent applications.

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