Canhorn Chemical Corporation -- Company Announcement.

TORONTO--(BUSINESS WIRE)--April 3, 1997--Canhorn Chemical Corporation ("CanChem") (TSE:CNH) announced today that they have reached definitive terms of agreement to acquire two existing chemical manufacturing businesses from a major U.S. corporation.

This possible acquisition was first announced on September 30, 1996. A formal Letter of Intent was negotiated during December, 1996, followed by a comprehensive due diligence review during the last three months.

Completion of the transaction is subject to arranging financing, regulatory approval and final approval of both parties' Board of Directors. CanChem is presently negotiating to arrange a combination of debt and equity financing of up to C$20 million to accommodate a closing within 60-90 days. Until closing, CanChem is bound to confidentiality by a Secrecy Agreement.

The acquired operations will be transferred from their present location to Decatur, Illinois where CanChem is presently operating an 18,000 square foot plant for the production of flavour and fragrance and electronic chemicals. About the same size plant addition will be constructed during the second half of 1997 to fully integrate this new activity which is compatible and provides for marketing synergy. The businesses are being acquired for US$10.5 million including $1 to $1.5 million of inventory and fixed assets. The plant and equipment addition and transfer costs are estimated at US$2.35 million. The balance of the funds will be used for additional working capital and the cost of this transaction.

The acquired businesses had sales during calendar year 1996 of US$18.204 million with a gross profit of US$3,542,000.

CanChem's Annual Meeting of Shareholders will be held at the King Edward Hotel in Toronto, Ontario on Thursday, the 10th day of April, 1997 at 11:00 a.m.

CONTACT: Canhorn Chemical Corporation

Herman Becker-Fluegel, 718/351-1214

Michael D. Coulter, 416/368-3332

or

Riba Corporation

Richard Barra, 217/429-7422