FOR IMMEDIATE RELEASE - Spring House, PA - February 23, 2001. Unprecedented producer consolidations and technological changes have and will continue to dramatically change the shape of competition in the polypropylene (PP) industry. The recent formation of BASELL (BASF/Shell's Montell, Targor, Elenac); Dow's acquisition of Union Carbide; and the dramatic reshaping of BP (addition of Appryl and Solvay capacity, the sell-off of Amoco's $1 BIL/yr PP fibers and PP compounds business) are changing this landscape.

The Catalyst Group's (TCG) newly released report entitled, "Polypropylene and its Co-Polymers: Technology Innovation and Strategies to Excel in 2001 and Beyond" is a comprehensive and timely study that addresses the complex technical, legal, strategic and supply/demand issues with which the industry is wrestling. The study points out that the PP industry is characterized by two very strong, opposing forces:

• Global demand is large with 28-29 million metric tons of PP consumed in 2000; and growth is still attractive, expecting better than 5% per year growth through 2005, which has stimulated capacity expansion.
  
  
• Yet, PP supply remains long, and monomer/energy prices are giving producers less than satisfactory margins and earnings - a situation that will persist over the short-term unless capacity is either idled and/or new planned capacity expansions are shelved.

Despite these conditions, the industry is poised to introduce and capitalize on new technologies, as well as new specialty PP copolymers and terpolymers, including functionalized resin systems that enable both engineered and elastomeric PP grades to be produced. Many of these new technologies are the result of new and improved metallocene/single-site catalysts in conjunction with traditional Ziegler-Natta (Z/N) catalyst improvements. While large producers such as Basell, BP, ExxonMobil and Dow are leading the way, it is clear that the PP industry as a whole retains latent and commercially underdeveloped product technology with cost/performance advantage. Access to these technologies will clearly play a role in improving producers' profitability longer-term.

While consolidations and merger/acquisitions have dramatically reshaped the playing field (and captured the press), having size and critical mass alone will not lead to success. Although PP provides a cost/performance advantage over other materials, it is still clearly applications driven, and therefore:

• PP product applications development, diversification and substitution of existing plastics and materials have been and will continue to be a PP producer's lifeline.
  
  
• In addition to the obvious economic benefits derived from consolidation, improved access to technology will broaden the offering of higher value products by larger players.
  
  
• Serious players will pursue value-added product strategies with access to advanced ZN, metallocene and single-site catalysts, which will enable new copolymer grades, e.g. Basell's new Clyrell copolymers and Dow's InspirePerformance Polymers.
  
  
• JVs and licensing agreements will also flourish, enabling others to participate, albeit with freedom to operate controlled by the players.

How producers respond in the short term to these strategic, competitive and technology challenges will sort out who the survivors will be in 2005 and beyond.

For further information about this new report, contact Clyde Payn, CEO, The Catalyst Group: 215-628-4447 or e-mail cfp@catalystgrp.com.

The Catalyst Group is recognized as a leading international technical and business consulting organization providing ongoing services to companies involved in every aspect of the catalyst and process industries. The Catalyst Group's assessment is based on information obtained from the public domain as well as internal sources and industry interviews. TCG's analysis will report factual information, as well as hypotheses/interpretations based on this information, in order to derive a reasonable set of expectations. Factors could cause actual results to differ from our forward-looking statements and The Catalyst Group undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances after the date hereof.