07.26.06

Schumer, Clinton Urge Feds To Designate Schott Lithotec In Poughkeepsie As A Foreign-Trade Subzone

Senators Call On Department Of Commerce To Allow Duty Exemption On Specialized Raw Glass To Eliminate Cost Disadvantage Faced by NY CompanySchott Lithotec USA Employs 80 People In Poughkeepsie And Makes Highly Specialized Glass Products Used By Semiconductor Industry

U.S. Senators Charles E. Schumer and Hillary Rodham Clinton today urged the U.S. Department Of Commerce to designate Schott Lithotec in Poughkeepsie as a ForeignTrade Subzone to help against an import duty exemption on glass that will eliminate a 4.9 percent cost disadvantage for Schott Lithotec. There are no U.S. sources for the special glass substrates imported by Schott Lithotec as a key input, so the company has to import all the raw materials from Japan and Germany. Their primary competitors are also located in Japan, where Schott's competitors can access the raw material locally without duty cost. The industry is highly competitive, and duty costs make a significant impact on a companys ability to be price competitive. This designation will help to level the playing field with competitors without affecting U.S. based suppliers, since there arent any for this particular product.

Schott Lithotec is an exciting, cutting edge business that hopes to expand in Poughkeepsie and New York State, Schumer said. It is important that our local businesses get what they need to thrive and keep their competitive edge. Schott Lithotec and other technology companies are a shot in the arm for the region and will increase local economic development. It makes no sense for us to have a tariff in place when there are no other domestic producers to protect from foreign competition.

Schott Lithotec is a local New York company that is competing with the best of the world. They are also in a unique situation locally, with no domestic producers of their primary component. With 80 employees in Poughkeepsie, Schott Lithotec has made a commitment to the community and hopes to expand that commitment even further. We hope that the Department of Commerce recognizes their individual circumstance and helps us to keep them in business, for their companys future, for their employees and for their community, Senator Clinton said.

Schott Lithotec is a leading supplier worldwide of advanced materials and components with customerorientated solutions for the microlithography market. They employ 80 people in Poughkeepsie, New York, and 400 people worldwide. Currently, Schott Lithotec is the only U.S. based company capable of supplying advanced photomask blanks to the semiconductor industry. They recently invested $20 million in their Poughkeepsie facility and they have future plans to increase investment and jobs in New York State.

The designation as a foreigntrade subzone will allow Schott Lithotec to admit the quartz substrates without the payment of duty, manufacture the substrates using U.S. labor into the photomask blank, and then bring them into the United States market as a manufactured photomask blank, which bears a lower duty rate of 3.7 percent. This is the same tariff rate applied to the photomask blanks manufactured in Japan and imported into the United States. In addition, foreigntrade subzone status will allow Schott to eliminate the payment of U.S. duty on both rejected substrates and substrates manufactured into photomask blanks which are subsequently exported. Exports account for nearly 33 percent of Schotts production.

In a personal letter to Andrew McGilvray, Acting Director of the ForeignTrade Zones Board at the U.S. Department of Commerce, Schumer and Clinton wrote, We believe that retention and growth of Schott Lithotecs photomask blank manufacturing facility is an important component of local economic development efforts in the Hudson Valley region of New York, as well as to the United States as a whole. We respectfully request your approval of their application.



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