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ISSUE 113

November 15th, 2012

On October 20, Bluestar executive VP Zhang Lijun and Elkem CEO Helge Aasen visited Bluestar Silicon Materials (Yongdeng, Lanzhou) for a field

survey. Zhang learned about the safety performance, cost control, materials acceptance, market development, IT infrastructure development, renovation of the 4#/5# furnaces and team building activities of the factory and expressed his expectations for related activities.

Zhang emphasized that safety is the cornerstone of business operations and safety management is an important way to protect the life and health of employees and the corporate assets from loss, noting the need to help employees become safety minded through safety culture initiatives and training efforts.

Zhang noted that as the source of Bluestar’s silicon value chain, Bluestar Silicon Materials (Yongdeng, Lanzhou) cost position and product quality have a great bearing on the whole value chain, especially the per unit consumption of power, machinery and materials in the production process and the quality of raw materials and products, which are immediate determinants of the competitiveness of its silicon products in the marketplace.

The visitors first came to the production line to learn about the operational status of the electrode automatic control system for the #1 furnace and the integrated control system, customized by Elkem experts, which combines automatic batching, refining, data acquisition and analysis. Zhang stressed that the automation rate is an indicator of the automatic control level of plants and the global best practices represented by BASF and Dow

Zhang Lijun visits Bluestar Silicon Materials (Yongdeng, Lanzhou)

Chemical include an automation level of over 90%. Elkem is a world leader in automation, and the factory is expected to benchmark itself against Elkem for improved automation level, production efficiency and reduced operational fluctuation, added Zhang.

On the site of the #4 and 5# furnaces, now being renovated, Zhang told the director of the factory that the head office had invested heavily in the renovation project despite the unfavorable economic landscape and Elkem provided generous technical support, expecting the factory to make full use of the project budget, implement the Elkem technology sufficiently, complete the renovation project to the qualitative and quantitative requirements and to the world-class level of construction, maintenance and operation of Elkem electric furnaces, so as to build the two furnaces into nationally or even internationally competitive plants.

Lian Wentao

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On October 12, a group of visitors, comprising of Elkem Shanghai employees and their family members, visited Xinghuo Plant. During the observation, the visiting group developed a deeper

understanding of the past, present and future of Xinghuo Plant as well as greater confidence in the prospects of the plant by watching the corporate profile video, observing the safety education room, the factory-owned gallery of history and the 200,000 t/a silicone plant project site.

Elkem Shanghai’s employees and family members visit Xinghuo Plant

Du Yanqing, Hu Minchang

Bluestar Dongda achieves good operational performance in the first three quarters

Despite the worldwide economic downturn, Bluestar Dongda managed to keep its sales revenue in the first three quarters of this year at the same level as

last year while increasing its profits by 14% and production output by 20% year on year, keeping its leadership in the industry in terms of output and sales volume of polyether and profitability.

The marketing department of the company managed to increase its operational efficiency and improve the decision-making and risk forecasting capabilities following a marketing strategy based on market position and profitability, through the following measures: sharing

information with other departments in time to ensure coordination between planning and shipment; exchanging marketing information with peers to inform the market forecasting efforts; adjusting marketing strategy and inventory timely to the changing market conditions; intensifying sales personnel training and management; introducing a competitive mechanism.

The company endeavors to reduce costs and improve product quality strictly according to the market conditions. The epoxy propane plant’s capacity was increased by 90,000 tons while being renovated to reduce steam consumption and improve the competitiveness of polyether products. More efforts have been made in R&D, and one result is that the sales volume of high-value-added products has been increasing, with some products entering the high-end domestic market. The SHE management system has been strictly implemented, resulting in a higher level of safety and environmental protection.

Zhao Minghua

Bluestar Beijing successfully develops compartment made from composite materials

Recently, China’s first conceptual self-loading vehicle of 8.6 meters in length equipped with a compartment made exclusively from composite

materials was unveiled, marking the successful completion of the first phase of the lightweight truck development project undertaken by BlueStar Beijing. This vehicle- incorporates exclusively Bluestar-made compartment of carbon fiber composite materials.

The R&D team comple ted the const ruc t ion o f modeling, structural design and stress analysis. A new material called poly-dicyclo pentadiene (PDCPD) was

introduced to improve the performance of the surface adhesion layer of the composite materials. This project has produced considerable proprietary intellectual property, with 12 patent applications and 9 utility model patent applications pending. The first sample vehicle will soon be delivered to the customer and the roadway, heavy-duty tests and test data accumulation are currently underway on the test field of North Benz.

Zhang Li

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Thanks to our parents

Who gave birth to us? Our parents. Who feeds us? Our parents. To whom are we supposed to be most grateful in our life? Our parents.

Who is most concerned when we fall ill? Also our parents.

After giving birth to us, our parents have made enormously painstaking efforts to raise us. They simply could not love us more. Every one of my classmates is an only child, so they always have everything they want. Why do our parents work so hard every day? Simply to give us a better life. All parents love their children like crazy; maybe there are times when they set high standards for us, but they do so simply for our sake. What are we supposed to give back? Should we talk back? Quarrel or be disobedient? Are we supposed to do any of these things? Perhaps we feel annoyed or frustrated when our parents teach us lessons. But we are never supposed to talk back. We can tell them in a soft voice if we think they are wrong. How heartbroken they feel when we quarrel or talk back to them! Sometimes, although we know this, we

simply can’t keep ourselves under control. Thinking they are in menopause at this very moment is indeed unwarranted. We have also found that our parents grow old fast, with gray hairs growing in ever greater numbers, all because of their concern for us. Because of our growing desire for more, our parents make every possible effort to meet our needs. Yet we make them concerned about us all the time, so we should learn to stand on our feet and give our parents peace of mind.

We should learn to thank our parents, be committed children and do everything we can to ease their burden, such as cleaning and housekeeping and if possible, fix a dinner, for the purpose of letting them relax and enjoy life, with more peace of mind and less effort. These are sufficient to slow down their aging process. Our parents grow older while we grow up. We are supposed to become their walking staff for the rest of their life.

Let us be grateful to our parents, love our parents and do everything we can for our parents.

Zhang Shuxin, a child of a Bluestar Dongda employee.

4BlueStar Communication Chinese Editor: Jiang Bo E-mail: jiangbo@bluestar.chemchina.com Tel:+86-10-61958815 English Editor: Xu Lili

A visitor takes photo of a shed piled up by corns during an exhibition of agricultural production in Xinjiang county, North China's Shanxi province. Oct 12, 2012. Xinjiang county has embraced a good harvest this year.

Farmers harvest in apples in Yan'an city, Shaanxi province on Oct 13, 2012.

Farmers dry newly-harvested corns in Xinjiang county, Shanxi province on Oct 13, 2012

A farmer dries persimmons in Yangcheng county, Shanxi province on Oct 13, 2012.

Farmer Guan Erwa picks raw cotton from a field in Jinjing Town, Yuncheng City of north China's Shanxi Province, Oct. 15, 2012. As one of the largest cotton production areas in north China, Yuncheng has witnessed cotton harvest this year.