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EM Asia: What significance does the acquisition of National Starch hold for Henkel in Asia, especially in the electronics segment? Kuhnert: When we look at the global competitive landscape in the industrial adhesives business, this acquisition actually merges the No.1 and 2 players in the market. The National Starch product range is the perfect complimentary fit for Henkel in terms of market segments, technology and regional diversification. In the electronics sector, close to 70 percent of National Starch’s sales is in Asia, and at Henkel’s adhesives division, our current setup brings in 13 percent of sales in the region. Together, this is a big step forward for Henkel’s regional allocation of sales in Asia Pacific and it narrows the gap between our sales in the region and the overall importance of Asia Pacific in our relevant market segments. EM Asia: How is Henkel integrating its operations with that of NationalStarch? Kuhnert: Globally, we have five key priorities when it comes to the integration of National Starch. Firstly, we want to retain key talents from their company and not lose any key personnel from their top management, which will be a great asset for our combined organization. Secondly, we want to retain our key customers and continue to serve them in the best possible way. Here, we have taken a rather detailed and comprehensive approach where we have assessed the amount of risk involved in losing customers to our competitors as a result of the integration. Subsequently, we have identified strategies on how to prevent this from happening, customer by customer, and we are now in the implementation phase. Thirdly, we wanted to make sure that there were no disruptions and smooth operations from Day 1 of the legal merger in key areas like sales, marketing, operations and HR, and that we continue to service our customers like any normal working day. We have achieved this. The fourth priority is to secure our key purchasing agreements. We have evaluated Henkel’s and National Starch’s key suppliers and reviewed contracts with them in order to secure our supply and service agreements. Last but not least, we want to realize our offensive and defensive synergies. We have communicated to capital markets worldwide that we expect to invest roughly 250 million euros to integrate both businesses. We also stated that we are aiming for the same amount (250 million euros) of annual savings by 2011. Breaking down this global target to the Asia Pacific region, we have come up with detailed projects and programs country by country, identifying areas we can improve including new business opportunities, and products that we can leverage through our national distribution networks. We are also making use of this unique opportunity to re-check our organization to come up with a lean and efficient organization that optimally supports our combinedbusiness. EM Asia: Are you expecting a bigger injection of R&D investment resulting from the integration? Kuhnert: The merger with National Starch provides us with a unique opportunity in terms of critical mass. In Henkel Adhesives, roughly 3 percent of our sales revenue is allocated for R&D. If we take this percentage and apply it to an 8 billion euro business, this will easily come up to 250 million euros which we can invest in R&D. Therefore, we are very confident now that will be able, even better than in the past, to serve our customers with innovative solution to their problems. EM Asia: How is Henkel Adhesives coping with the current global economic situation? Kuhnert: It is quite clear that, at the moment, we are facing a challenging economic environment. Our main issue is strong increases in raw material costs, which has put a lot of pressure on our profit margin. In line with our competitors, we have no choice but to increase prices. Fortunately, with our strong position in the adhesives segment we provide value-added services so that our relationship with our customers is that of a technology partner rather than just a supplier. All of this helpsus to preserve our margins. | 
