BAT's Subsidiary, Ultra-Force Battery Co., Has Secured Worldwide License With DAUG to Manufacture Batteries.

BURBANK, Calif.--(BUSINESS WIRE)--Oct. 7, 1997--B.A.T. International's (OTC:BAAT) subsidiary, Ultra-Force Battery Co. (UFBC), has recently signed a worldwide license agreement with DAUG, a research joint venture of DaimlerBenz and Volkswagen, to use an advanced fiber nickel electrode technology for battery manufacturing.

DAUG fiber nickel electrode batteries are now used commercially in the most demanding situations in the world, including F-16 Fighters, Apache Helicopters, missiles and in commercial airline applications such as the McDonnell Douglas MD90 and Boeing 777. UFBC will be using the same advanced technology to manufacture a low-cost, high-performance nickel cadmium and nickel metal hydride battery for electric vehicle, telecommunication and industrial markets.

UFBC has developed and filed patents on a technology called SEALER that allows the battery to be fully sealed using industrial battery production techniques. This allows UFBC to manufacture a sealed, no-maintenance battery at approximately the same cost as a vented battery that requires maintenance and releases gases.

When DAUG fiber electrodes are combined with the SEALER technology, the batteries have very long life (15 years in electric vehicle (EV) applications) and very low cost ($350/kWh, 4-5 cents/mile in EVs). The SEALER overcomes one of the biggest problems plaguing nickel metal hydride electric vehicle batteries, thermal control and plate imbalance resulting in dryout, while also providing a battery monitoring and charge control capability.

The combination of DAUG and SEALER technology will also open up opportunities in the traditional industrial market of $2.5 billion for railroad, uninterruptable power supplies and stationary stand-by power batteries. In telecommunication applications, the fiber nickel electrode battery can be installed and forgotten for a long period of time with no service making it an ideal backup power supply for fiber optic installations. Industry estimates of market demand for these batteries is billions of dollars annually.

UFBC has formed a joint venture with a battery company, HBL Limited, in India, to provide immediate production capacity for world markets. HBL is the largest specialized battery manufacturer in India and is involved in production of a variety of industrial and military batteries including nickel cadmium, lead acid, silver zinc, lithium and other types.

UFBC's joint venture, Ultra-Force Battery Limited, now has building and infrastructure in place, and has initiated equipment planning and installation and will start production in early 1998. UFBC will control worldwide marketing of batteries, with HBL in charge of marketing in India and other designated countries.

The HBL group is also manufacturing battery chargers and selling integrated battery/charger systems. UFBC has a marketing agreement to distribute all batteries and chargers now manufactured in HBL facilities in target markets including the United States.

All products manufactured at HBL have low production costs due to efficient production layout and low labor costs. UFBC will have all charger and SEALER manufacturing occur at the plant in India.

UFBC has hired a management team consisting of a world renowned group of battery development and production experts. UFBC is in planning stages to establish a manufacturing facility in the United States to enter into high volume production (150,000 kWh) for automotive, telecommunication and industrial markets. UFBC's preferred site is New York state, with plant start up in fall 1999.

This will be timed to coincide with implementation of zero emission vehicle (ZEV) mandates in New York state, where 7,800 ZEVs will have to be sold in 1998, 1999 and 2000. By 2003, approximately 150,000 ZEVs will have to be sold in New York, California and Massachusetts. Assuming 20 kWh per vehicle, UFBC future production of 150,000 kWh, would be fully utilized by just 1998 New York state mandates of 7,800 vehicles. This would generate $55 million in annual sales revenue.

DAUG has done extensive development work over a 20-year period to produce fiber nickel electrode technology, including testing in electric and hybrid electric vehicles and commercial use in industrial and aerospace applications. Independent testing of these batteries has resulted in the following data:

Long Life: 3,000 cycles at 100-percent depth of discharge (DOD)

(25 deg. C), 9,000 cycles at 60-percent DOD (10 deg. C),

17,000 cycles at 35-percent DOD (10 deg. C) Cold Climate: No loss of capacity at 0 deg. C, 5-percent loss at

-18 deg. C, 30-percent loss at -40 deg. C Warm Climate: No degredation after testing at +50 deg. C and +65 deg. C

The combination of DAUG nickel electrodes and UFBC SEALER technology results in a battery with very long life that requires no maintenance, is fully sealed, can operate in cold and hot climates with little loss of capacity and can be quickly charged or discharged with no damage.

Energy density is also very high, due to the ability to adopt the DAUG nickel fiber technology to larger plate areas and to use plastic case materials, as opposed to small plate areas and heavy stainless steel cases. The production nickel metal hydride battery is expected to have an energy density of 75-85 Wh/kg, which translates into a range of 120-180 miles per charge for a typical family sedan. The quick charge and discharge capability also makes it ideal for use in the hybrid electric vehicle applications.

CONTACT: B.A.T. International, Burbank

Joseph LaStella, 818/565-5555

fax: [phone]

e-mail: [e-mail]

URL: www.baat.com