The Roth & Rau Group is pressing ahead with the strategic expansion of its activities in its cadmium telluride thin film (CdTe) division. To this end, Roth & Rau AG and its subsidiary Roth & Rau CTF Solar GmbH (CTF) have signed a joint venture agreement with a Chinese company for the construction and operation of systems to manufacture CdTe solar modules in China. In the first stage, a specimen plant with an annual capacity of 80 MW is to be built in Brandenburg, Germany. This will produce CdTe solar modules on a turnkey production line to be supplied by CTF and will act as a reference plant for future operations in China. The order for Roth & Rau’s subsidiary CTF to supply the turnkey line to the joint venture company to be established is expected to be worth
almost € 100 million. However, the terms governing the supply of the turnkey line still have to be negotiated in detail. Performance of the joint venture agreement is subject to the conditions precedent of approval by the relevant bodies at the Chinese joint venture partner and the Supervisory Board of the Roth & Rau AG, the agreement of terms for the supply of a turnkey line by CTF to the joint venture company, approval by the Federal Antitrust Office and the granting of approval by the relevant Chinese authorities for foreign investments.

This joint venture and the planned entry into the Chinese CdTe market represent a milestone in the company’s development. For the operation of the specimen plant, Roth & Rau AG and its contract partner will initially found a joint venture company (limited liability company – GmbH), in which Roth & Rau AG will hold a 49% share of the capital. In line with its shareholding, Roth & Rau will contribute an amount of € 19.6 million to the new company’s capital reserve. Once the specimen plant in Brandenburg is successfully up and running, corresponding production plants are to be developed in China. Roth & Rau will have the opportunity to hold a 32% stake in these. Roth & Rau will be the preferred supplier for equipping the Chinese plants with turnkey lines.

Explanations of the Issuer:
“This joint venture represents a further milestone,” commented Dr. Dietmar Roth, CEO of Roth & Rau AG, “coming as it does less than a year after our takeover of CTF Solar GmbH, which provided us with substantial expertise for our strategic entry into CdTe technology. By setting up a reference production site in Brandenburg, we aim to prove the competitiveness of our new CdTe technology line and expand our market position in the thin film business.”

With production costs of less than € 1.00/Wp (pro Watt peak), CdTe technology is currently notably cheaper than most other thin film technologies and also requires comparatively low investment costs. Moreover, CdTe modules now already achieve efficiency rates of more than 10% in production and more than 16% in laboratory conditions.

About Roth & Rau AG:
Roth & Rau AG, based in Hohenstein-Ernstthal, has been one of the world’s leading suppliers of production equipment and innovative production technologies for the photovoltaics industry for more than 10 years now. In its photovoltaics segment, Roth & Rau focuses on providing antireflective coating systems and turnkey production lines for use in the manufacture of crystalline silicon solar cells. Further products include thermal processing systems also used in the manufacture of crystalline silicon solar cells, as well as coating systems and turnkey production lines for the manufacture of thin film solar modules. Roth & Rau Microsystems, a subsidiary located in the Wüstenbrand district, develops and produces process systems for plasma and ion beam enhanced thin film and surface processing methods tailored to customers’ specific needs. The customers served by this division particularly include companies in the semiconductor industry, R&D departments in various other industrial sectors, research institutes and universities. The portfolio of the Roth & Rau Group is supplemented by software products in the field of systems management, production monitoring and maintenance and service offerings. Roth & Rau posted sales of € 272.1 million in the 2008 financial year. Sales for the first nine months of 2009 amounted to € 159.5 million, with EBIT of € 13.1 million. The Roth & Rau Group had a total workforce of 857 employees as of 30 September 2009.