Brembo aims to mass produce carbon-ceramic brakes with new joint venture

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New technologies always cost the early adopters big bucks. But higher demand leads to increased supply, and costs eventually go down to the level accessibly by the common man. So while carbon-ceramic brakes might be a big ticket item right now – often dipping into five figures as optional equipment on European exotica – Brembo has formed a new joint venture with carbon-fiber supplier SGL Group with the specific goal of mass-producing the brake technology for widespread application.

Carbon-ceramic brakes offer several major benefits over cast-iron discs -- specifically light weight and the ability to dissipate heat quickly, preventing fade -- with few drawbacks. The only downside is that the extant manufacturing process is labor-intensive, driving the cost up, which is why they're currently only available on high-end exotic supercars. Brembo SGL Carbon Ceramic Brakes, however, which just began operations at its Milan headquarters on the first of this month, aims to streamline the production of the rotors so that they can be implemented across the industry. (That's a good thing.) Scope out the press release below the fold for more details

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PRESS RELEASE:

Brembo and SGL Group Join Forces in Carbon Ceramic Brake Discs

Brembo and SGL Group sign a full-fledged joint venture
in carbon ceramic brake discs for the passenger car and commercial vehicle markets
The new company will be leader in the development of carbon ceramic brake systems
as well as production and sale of carbon ceramic brake discs for the premium segment
Significant synergies in technological development, operations and marketing
Development of next generation carbon ceramic brake discs for larger scale automated production as medium-term target

Stezzano / Wiesbaden, May 28, 2009. Brembo S.p.A. – a world leader in high performance brake
systems – and SGL Group – The Carbon Company – announced today the contract closing of a
joint venture, in the area of carbon ceramic brake discs, with each parent company owning a 50%
share in the new entity. For this purpose, the current subsidiaries Brembo Carbon Ceramic Brake
Systems SpA and SGL Brakes GmbH will combine their activities. The joint venture operates
under the name "Brembo SGL Carbon Ceramic Brakes" and will become operational effective June
1, 2009. The new headquarter will be in the Milan area. The merger of activities has already been
approved by the relevant authorities.

The objective of the joint venture is to further develop carbon ceramic brake systems as well as to
produce and market carbon ceramic brake discs, exclusively for the passenger car and commercial
vehicle markets. The joint venture will also focus on the automated production of the next
generation of carbon ceramic brake discs for the broader car market.

With approximately 350 employees at its sites in Meitingen (Germany) and Stezzano (Italy), the
joint venture expects sales of approximately € 70 million in 2009. Brembo S.p.A. and SGL Group
announced their intent in April to merge their respective carbon ceramic brake disc activities into a
joint venture. The joint venture will be headed by two General Managers, Antonio Braiato from
Brembo and Bruno Toniolo from SGL Group, who both have extensive management experience
within each respective parent company.

The current customer base includes, among others, Aston Martin, Audi, Bentley, Bugatti, Daimler,
Ferrari, General Motors, Lamborghini and Porsche.

The merger of activities and the formation of the joint venture involved the following steps: firstly,
SGL Technologies GmbH subscribed € 30 million for new shares in Brembo Ceramic Brake
Systems S.p.A., as part of a reserved capital increase, thus acquiring 50% of the company. The
new joint venture, renamed Brembo SGL Carbon Ceramic Brakes S.p.A., then resolved to
purchase for € 30 million all the shares in SGL Brakes GmbH, the SGL group company dedicated
to the production of carbon ceramic discs.


A 5 year lock-up agreement has been agreed between the parts.

Robert Koehler, CEO of SGL Group, comments: "Brembo SGL Carbon Ceramic Brakes will be the
worldwide benchmark in technology, design, development and production of carbon ceramic brake
discs for sports and luxury cars. After intense efforts made in recent years, the carbon ceramic disc
technology is now ready to be applied on a wider scale. Brembo is the ideal partner for SGL Group
to bring this innovative product to the next level of industrialization and commercialization. The joint
venture is in line with our Carbon Fibers & Composites growth strategy to cooperate in the down-
stream businesses with established industry partners to bundle know how and to better utilize the
market potential by offering superior solutions to the customers."

Alberto Bombassei, CEO of Brembo S.p.A., remarks: "I am especially proud to announce this joint
venture, which will give a critical boost to the next generation of carbon ceramic brake discs. The
combination of our expertise in top level brake systems and carbon ceramic disc application with
SGL Group's outstanding knowledge of the materials will allow this type of product to be applied in
a broader market segment. "Brembo SGL Carbon Ceramic Brakes" marks a further step in
Brembo's development towards systems with even greater performance and lightweight that meet
the changing requirements of the automotive world, including respect for the environment."


Synergies in materials, processes and product development

The complementary skills of both companies will result in the release of synergies in areas such as
materials, processes and product development. Brembo, a leader in the development and
production of high performance brake systems for car and motorbike applications, has developed
carbon and carbon ceramic materials for F1 and street applications, and will contribute its expertise
in automated production as well as its brake system know-how. SGL Group has comprehensive
experience in carbon fiber based materials and is the only European integrated supplier covering
the entire value chain, ranging from precursor and carbon fiber production, to fabrics, preforms and
prepregs, as well as composite components. The combined capabilities will enable Brembo SGL
Carbon Ceramic Brakes to serve OEMs as their development partner, which will be a key success
factor for carbon ceramic brake systems in the marketplace. Joint R&D investments will ensure the
efficient utilization of resources and lower development costs by avoiding duplicate work in similar
areas.


Large scale production is medium-term objective

Carbon fiber reinforced ceramic materials have been used in aerospace applications since the
1990s. In 2001, the first cars were equipped with carbon ceramic brakes on a commercial basis,
with Brembo Carbon Ceramic Brakes Systems and SGL Brakes establishing their current plants at
this time. Both manufacturing facilities have sufficient production capacities to meet current market
demand. Despite the present slow-down in the automotive mass market, the significant untapped
growth potential for carbon ceramic brakes in the premium segment offers a potential triple digit
million Euro market. However, current production technology is still characterized by several
manual and semi-automated process steps. Efforts will therefore continue to develop and launch
new products based on automated processes suitable for larger scale production. Ultimately, these
developments aim to significantly reduce manufacturing costs to a level that justifies future
investment in a new large scale production facility.


Carbon Ceramic Discs: Green performance

Compared to traditional cast iron discs, carbon ceramic discs offer significant weight reduction – up
to 50% – and therefore lower fuel consumption. This product is more environmentally friendly, with
lower CO2 emissions, a longer life span, greater corrosion resistance, avoidance of fine particle
dust and performance advantages, as well as a very high level of thermal stability (fading
resistance).


About Brembo S.p.A.

Brembo S.p.A. is the world leader and acknowledged innovator of the brake disc technology for automotive
vehicles. Brembo supplies high performance brake systems for the most important manufacturers of cars,
commercial vehicles and motorbikes worldwide, as well as clutches, seats, seat belts and other components
for racing only. Moreover, Brembo is also a leader in the racing sector and has won more than 200
championships. Today the company operates in 14 countries of 3 continents, with 33 production and
business sites, and a pool of about 5.800 employees, 8% of whom are engineers and product specialists
active in the R&D. 2008 turnover is € 1 billion. Brembo is the owner of the Brembo, Breco, Marchesini,
Sabelt brands and operates through AP Racing brand.


About SGL Group – The Carbon Company

SGL Group is one of the world's leading manufacturers of carbon-based products. It has a comprehensive
portfolio ranging from carbon and graphite products to carbon fibers and composites. SGL Group's core
competencies are its expertise in high-temperature technology as well as its applications and engineering
know-how gained over many years. These competencies enable the Company to make full use of its broad
material base. SGL Group's carbon-based materials combine several unique properties such as electrical
and thermal conductivity, heat and corrosion resistance as well as high mechanical strength combined with
low weight. Due to the paradigm shift in the use of materials as a result of the worldwide shortage of energy
and raw materials, there is a growing demand for SGL Group's high-performance materials and products
from an increasing number of industries. Carbon and graphite products are used whenever other materials
such as steel, aluminum, copper, plastics, wood etc. fail due to their limited properties. Products from SGL
Group are used predominantly in the steel, aluminum, automotive, chemical and glass/ceramics industries.
However, manufacturers in the semiconductor, battery, solar/wind energy, environmental protection,
aerospace and defense industries as well as in the nuclear energy industry also figure among the
Company's customers.

With 40 production sites in Europe, North America and Asia as well as a service network covering more than
100 countries, SGL Group is a company with a global presence. In 2008, the Company's workforce of
around 6,500 generated sales of €1.6 billion. The Company's head office is located in Wiesbaden/Germany