Tognum and Hug to Found Joint Venture for Exhaust Aftertreatment

• Ground-breaking development of particle filters and SCR systems to be continued
• Joint venture will smooth the way from prototype to standard production and safeguard key technology of the future
• Optimization of costs, installation space and weight

Friedrichshafen, 11 August 2008. The Tognum Group and the Swiss company Hug Engineering AG have agreed on a joint venture for cooperation in the field of exhaust aftertreatment. The new company will be established on October 1, with its headquarters in Switzerland. Specialists from both companies will be cooperating to ensure that large mtu diesel engines in the 2000, 4000 and 8000 series can be fitted with exhaust aftertreatment systems as a standard feature in the future. CEO of the new operation will be Friedrich Köskemeier from MTU Friedrichshafen. "This joint venture will see the coming together of two technological leaders with the twin aims of developing exhaust aftertreatment systems and of setting new standards for pollution removal levels and cost efficiency", said Volker Heuer, CEO of Tognum AG, emphasizing the significance of the strategic investment.

For mtu as a premium provider of engines and drive systems, turbocharging, fuel injection and electronics have always been three key technologies for a clean and economic combustion process. To fulfill the substantially lower limits of future emission requirements, additional technologies will be necessary for engine development. These include, for example, so-called SCR (selective catalytic reduction) systems in which nitrogen oxides are reduced by means of ammonia. MTU Friedrichshafen was among the first to conduct research on diesel particle filters and SCR systems and to run tests on prototypes. Hug has been gathering experience in this specialist field over many years and has developed and supplied around 1000 SCR systems for retrofitting on diesel engines in locomotives, ships and industrial plants.

Setting out the future course, Dr. Gerd-Michael Wolters, Member of the Tognum Board of Management responsible for Technology & Operations explained "In the next few years, we will be working with Hug to develop mtu-specific filter and SCR technologies through to standard-production maturity". The optimization of costs, installation space and weight will play a significant role in this process. "From 2011, we will be ready for standard production."

The joint venture will invest up to six million euros over the next few years. Despite this exclusive strategic arrangement, both companies are free to continue cooperation with other partners. Hug is planning to develop the capacity needed for standard production by 2011.


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Tognum

With its two business units, “Engines” and “Onsite Energy & Components,” the Tognum Group is one of the world’s leading suppliers of engines, propulsion systems and decentralized energy systems. These products are based on diesel engines with up to 9,100 kilowatts (kW) power output, gas engines up to 2,000 kW, fuel cells up to 363 kW and gas turbines up to 45,000 kW.
The product portfolio of the “Engines” business unit comprises mtu engines and propulsion systems for ships, for heavy agricultural, rail and military vehicles, and for the oil and gas industry. The portfolio of the “Onsite Energy & Components” business unit includes decentralized energy systems, fuel-injection systems from L’Orange, and drive shafts from Rotorion. The energy systems comprise diesel engines for emergency power generation, basic and peak load, and cogeneration power plants based on gas engines, fuel cells and gas turbines that generate both electricity and heat.
In 2007, Tognum generated revenue of more than €2.8 billion and employed approximately 8,200 people. With 26 fully consolidated subsidiaries, more than 130 sales partners and 1,100 authorized dealers, Tognum’s sales and service structure has a global reach. The shares of Tognum AG (ISIN: DE000A0N4P43) have been listed in the MDAX share index since 2007.
Disclaimer regarding forward-looking statements et al.:
This report also contains forward-looking statements based on assumptions and estimates of Tognum’s Executive Board of Management. Although we assume that our assumptions and estimates on which we have based these forward-looking statements are realistic, we cannot guarantee that they will in the future prove to be correct. The assumptions and estimates, by their nature, may harbour risks and uncertainties that may cause the actual figures to differ considerably from the forward-looking statements. Factors that may cause such discrepancies include, among other things, changes in the economic and business envi¬ronment, variations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services and changes in corporate strategy. Tognum does not undertake any obligation to update, to review or to confirm the forward-looking statements or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this announcement.