Hexion Specialty Chemicals To Boost Local Operations Through Land Purchase, Infrastructure Improvements.

COLUMBUS, Ohio -- As part of an effort to enhance the efficiency of its Edmonton, Alberta operations, Hexion Specialty Chemicals has purchased two parcels of land adjacent to its Edmonton plant and will improve the rail and logistics infrastructure at the site.

The company recently purchased a 1-acre plot adjacent to its current operations in West Edmonton at 12621 156th St. NW. Hexion had previously purchased another, adjacent 2-acre parcel from AEP Industries, which ceased operations at that location last year. Together, the two parcels provide Hexion the space to enhance the flow of inbound and outbound materials through infrastructure improvements that will include new rail, loading and unloading facilities. The total cost of the projects is anticipated to be $4-5 million.

"These land purchases and planned improvements will allow us to continue to enhance service to our regional forest products customers," said Mark Alness, vice president for Hexion's Phenolic & Forest Products Division. "Our business has grown steadily over the years and we had become cramped within the original site footprint. This series of improvement projects will provide better logistics at the site, which in turn will enable us to more efficiently manage the flow of both raw materials and the volume of finished products. More than 900 million pounds of UF and PF resins are produced each year at the Edmonton facility."

In addition, an agreement with CN will enable Hexion to import methanol, a key raw material, to the Edmonton facility. This agreement is vital to the site, as Celanese Corporation has announced it will close its Edmonton, Alberta methanol plant by the end of 2006. CN will play a key role by providing transportation and logistics solutions through the Cargo Flow facility it is establishing at its West Edmonton Bissell rail yard.

Hexion is the world's leading producer of thermosetting resins. It manufactures resins, adhesives and waxes at the Edmonton plant that are used by the forest products industry to produce plywood, laminated veneer lumber, oriented strandboard, particleboard and other engineered wood products. The site, established in 1952, employs 132 people in manufacturing, sales, research and support roles.

Since the mid 1980s, the Edmonton plant has undergone 9 major expansions with a total capital investment of $85 million and is now the premier regional center for resin production in Western Canada, serving 57 customer locations. The company estimates that resins from the Edmonton site are involved in the annual production of almost 11 billion square feet of wood products representing $4.5 billion in customer sales.

The forest products industry continues its steady growth in the region, with almost three billion square feet of additional oriented strand board production capacity expected to be added by 2009, according to industry publications.

The R&D center within the Edmonton complex is a global center of excellence for Hexion's research into advanced resin systems for oriented strandboard production. These resin systems have been a critical part of the company's continued growth, and products resulting from this local research are used by Hexion customers throughout the world.

Hexion also has significant operations in Vancouver, British Columbia, and Laval and St. Romuald in Quebec. These operations all serve the Canadian forest products industry.

"Our customers are growing rapidly in Canada and especially in Alberta and British Columbia," Alness said. "We will continue to invest in the region to serve the industry and our customers."

About Hexion Specialty Chemicals, Inc.

Based in Columbus, Ohio, Hexion Specialty Chemicals is the global leader in thermoset resins. Hexion serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Additional information is available at www.hexion.com.