Avery Dennison Announces $40 Million Investment to Expand in China.

Business Editors

PASADENA, Calif.--(BUSINESS WIRE)--Feb. 22, 2000

Avery Dennison Corp. (NYSE:AVY) (PCX:AVY) today announced that it will invest more than $40 million to expand its operations in China.

At a news conference in Shanghai, China, Avery Dennison senior managers said the company will build three new facilities in China over the next two years, expand its existing Kunshan manufacturing plant and open a professional training center for label printers and converters.

"In the past five years, Avery Dennison's core materials business in China has grown by more than 35 percent each year, exceeding our initial projections and making us the leading pressure-sensitive materials supplier in China today," said Philip M. Neal, president and chief executive officer of Avery Dennison.

"We achieved these excellent results despite the economic slow down in China during 1998 and 1999."

"China is now our largest market in Asia and it is expected to keep growing at the same pace, if not faster," said Neal. "We need to expand our capacity in this important region in order to meet growing demand."

According to Neal, growth in demand for pressure-sensitive materials is increasing in China due to the acceptance and use of self-adhesive labels on consumer products in a wide range of industries, including personal care, food, pharmaceutical and beverages. These consumer products markets are expanding rapidly in China.

The Asia Pacific region's label printing industry represents a key growth opportunity for pressure-sensitive materials. Businesses in the region recognize the need to upgrade their label materials and printing technologies to compete in the global marketplace, and are rapidly improving their operations.

In order to help develop the label printing industry in the region, Avery Dennison is creating the first-ever, state-of-the-art training facility for label printers and converters, located at its existing pressure-sensitive materials manufacturing plant and finishing center in Kunshan, China.

The Avery Dennison Self-Adhesive Label Conversion College, which will officially open its doors tomorrow, will offer technical training to label printers from across the Asia Pacific region and beyond, including Australia, New Zealand, Singapore, Malaysia, Philippines, Indonesia, Thailand, Korea, Japan, India, Russia and China.

The training center was established by Avery Dennison, along with a number of co-partner firms that are key suppliers to the label printing industry.

The new Conversion College will provide leading-edge expertise on the latest printing equipment and other converting technologies. Avery Dennison and its co-partners will provide key skills and operating knowledge to their customers leading to improved operations and growth in the Asia Pacific label printing industry.

As well as offering professional training to label printers and converters, the Conversion College will also hold end-user seminars on self-adhesive label applications for consumer products manufacturers.

With an initial investment of $30 million, Avery Dennison entered the Chinese market in 1994 with a manufacturing facility in Kunshan, Jiangsu province, located north of Shanghai. With administrative headquarters in Shanghai, the Avery Dennison China Operation has four sales, manufacturing and distribution centers in China, located in Guangzhou, Tianjin, Chengdu and Hong Kong.

"With the ongoing recovery of Asian economies, and our ability to offer professional training to current and new label printers, we look forward to the continued growth of our businesses in this important region," said Dean A. Scarborough, group vice president, Fasson Roll Worldwide at Avery Dennison.

"In addition to our growth in China, we are expanding further in the region by increasing our manufacturing capacity in Thailand and strengthening our distribution in India, Malaysia, Japan, Korea and the Philippines."

Avery Dennison is a global leader in pressure-sensitive technology and innovative self-adhesive solutions for consumer products and label materials. Based in Pasadena, Calif., the company had 1999 sales of $3.8 billion. Avery Dennison develops, manufactures and markets a wide range of products for consumer and industrial markets, including Avery-brand office products, Fasson-brand self-adhesive materials, peel-and-stick postage stamps, battery labels, reflective highway safety products, automated retail tag and labeling systems, and specialty tapes and chemicals.

Forward-Looking Statements 

Certain information presented in this news release may constitute "forward-looking" statements. These statements are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to availability of raw materials, foreign exchange rates, worldwide and local economic conditions, fluctuations in consumer demand affecting sales to, and production and inventory levels at, customer companies and other matters referred to in the company's SEC filings.