MC² Market & Competitive Convergence

New owners to expand product line to home furnishings industry
CHARLOTTE, N.C., June 26, 2002 - BASF and McKinnon-Land-Moran, LLC (MLM) announced that they have signed an agreement for MLM to purchase BASF's Basofil heat and flame resistant fiber business. Terms of the agreement were not disclosed.

The purchase includes the intellectual property, inventories, machinery and equipment related to the Basofil fiber manufacturing operation located at the Enka, N.C., site.

MLM, based in Charlotte, will continue to operate the Basofil fiber production plant at Enka. No job losses at Enka are anticipated as a result of the sale. Approximately 16 employees work at the Basofil operations.

BASF first introduced Basofil, a unique, flame resistant melamine fiber, in the mid-1990s for use in fire-blocking fabrics for commercial aircraft seating. In recent years, Basofil fiber applications have been expanded to include fire-blocking fabrics for firefighter turnout gear and industrial protective work wear.

"After assessing the future of the Basofil fiber business, it was apparent that BASF needed a strategic partner to fully capitalize on the potential of Basofil in additional market segments such as furniture and mattress fire blocking fabrics," said Jack Dellinger, General Manager of BASF's Enka, N.C., and Clemson, S.C., sites. "As part of our customer-supplier relationship, BASF identified MLM as a partner to assist with expanding the Basofil product line into these segments. This partnership has been successful.

"For BASF, melamine-based Basofil fibers offer limited synergy with other value chains," Dellinger continued. "Sale of the Basofil operation to MLM maintains jobs at the Enka location and provides opportunities for growing the business. In addition, this event takes us another step along the journey to the vision that BASF put forth several years ago of having an industrial park for Western North Carolina on the Enka Site."

During the International Sleep Products Association's "ISPA 2002 EXPO" held in March in Denver, Colorado, MLM introduced Alessandra ™ patented flame resistant yarn technology. The Alessandra flame barrier yarn and fabric technology is utilized to make ticking fabric for mattress and box spring sets and as an interliner barrier fabric for both mattresses and upholstered furniture. Basofil fiber was included as a significant component of selected Alessandra yarn products previewed at the Expo.

"With Alessandra yarn and Basofil fiber, we have created an exciting new mattress ticking product with superior flame resistance," said Bob McKinnon, MLM Chairman and Chief Executive Officer. "In addition to providing effective resistance to open flames, it is also soft and comfortable. The purchase of the Basofil fiber business will allow us to further develop and expand our product line with woven ticking products, interliner products, and nonwoven, high-loft products that achieve the desired flame resistance and at the same time retain comfort." Also of utmost importance, these products are inherently non-toxic since no harmful chemicals are utilized topically, or as a backcoating. To further add to its desirability, they are a cost effective solution as a "drop-in" replacement for fibers and fabrics currently used.

"After 15 years of developmental study and work, the combination of Alessandra and Basofil provide the solution to a problem the home furnishings industry has struggled with for years," explained Frank Land, MLM President and COO.

"This patented technology enables us to produce products that not only meet existing open-flame standards but also pass California's Test Bulletin (TB) 129 and Boston IX-XI standards in various mattress constructions, and the upcoming more stringent codes that are part of an ongoing national effort to reduce injuries and deaths attributed to fires," Land said. "Following further evaluation of market capacity, due diligence will begin regarding expansion of a Basofil fiber plant."

Corporate offices for MLM, along with the newly formed Basofil Fibers, LLC, will be located in the former business and marketing offices of Basofil in Charlotte, N.C.

BASF Corporation: Helping Make Products Better™
BASF, the world's largest provider of chemicals and related products, is recognized for innovation in helping its customers make products better for consumers. The company is an industry leader in environmental protection, safety and health, and social responsibility. Headquartered in Mount Olive, N.J., BASF Corporation is the North American affiliate of BASF AG (Ludwigshafen, Germany). BASF AG had sales of approximately $29 billion in 2001 and employs more than 90,000 people worldwide. BASF AG shares are traded on the stock exchanges in New York (BF), Frankfurt (BAS), London (BFA), Zurich (BAS), and Paris (BA). In North America, BASF had sales of $6.9 billion in 2001 and employs more than 14,000 people at approximately 50 locations. For more information www.basf.com/usa. Register to receive BASF Corporation news releases by e-mail at www.basf.com/newsreleases.

For more information, contact:
Phyllis D. Vance, BASF Corporation, Tel: (704) 423-2351, E-mail: vancep@basf.com
John M. Moran, McKinnon-Land-Moran, LLC, Tel: (704) 423-2244, E-mail: johnmmoran2@aol.com