Consolidation of Montebello and Southgate, California plants.

INDIANAPOLIS--(BUSINESS WIRE)--March 18, 1997--Lilly Industries, Inc. ("Lilly" - NYSE:LI) announced today that it will commence the final phase of consolidating two Los Angeles area coatings manufacturing facilities. The consolidation will take place over the next six months and involves moving all manufacturing from Lilly's Southgate, California facility to its Montebello facility. Previously, all administrative, technical, sales and marketing functions had been shifted to Montebello from Southgate. Improved efficiencies in raw material procurement, inventory management, manufacturing and customer service will position Lilly as a stronger supplier for the future in the California and greater Southwest markets. This consolidation is a continuation of our ongoing program to improve efficiencies and reduce costs. A third Los Angeles area plant, located in Gardena, manufactures gel coats and related products for the fiber glass reinforced plastics industry.

Lilly ranks among the largest North American manufacturers of industrial coatings and specialty chemical products. Founded in 1865 in Indianapolis, Lilly supplies customers worldwide from plants and sales offices in the United States, Canada, Taiwan, China, Malaysia, Ireland, the United Kingdom, Germany and Singapore.

CONTACT: Lilly Industries, Inc., Indianapolis

Douglas W. Huemme, 317/687-6701