Isola to Close Pendleton Facility

La Crosse, Wisconsin, July 29, 2002 – Isola Laminate Systems, a business unit of Isola AG the world’s leading manufacturer of electronic interconnect materials, announced plans today to permanently close its Pendleton, SC manufacturing facility by early 2003. Isola manufactures the base materials for multilayer, high performance and broadband printed circuit boards used in electronics applications including computers, telecommunications, industrial controls, automotive and consumer applications.

“The Pendleton plant was originally designed and built for high volume rigid material production. With the market changes in material usage and the significant decline in the electronics marketplace, particularly in the US demand for single and double-sided as well as CEM-1, production at this site is no longer viable. We will continue to support our customers’ needs for single, double-sided and CEM-1, by sourcing volume quantities from our production sites in Europe and Asia,” said Denny Ford, President of Isola Laminate Systems. “Specialty and quick-turn orders of these materials will be transitioned to our other US-based manufacturing sites over the next several months,” he added.

“While the Pendleton plant has been a mainstay to our business for a number of years, changes in global competition and in the US marketplace necessitate this difficult decision. This action will however allow Isola Laminate Systems to become more cost competitive in rigid materials while also allowing us to place our US production focus on high-end multilayer materials.” said Ford.

“The US market demand for rigidboard products has dropped 50% over the last two years and the long-term projection indicates further decline. While we are committed to this market, now is the right time for Isola to re-focus its US capacity on the high-end multilayer market,” said Michael Kowalski, CEO of Isola AG and Speaker for the Board of Directors.

Approximately 175 people, in addition to 78 who are currently on lay-off, will lose their jobs as a result of closing the Pendleton manufacturing site. This number includes both hourly and salaried employees. Isola Laminate Systems employs approximately 700 people in the U.S.

Headquartered in Duren, Germany, Isola AG currently has twelve production facilities worldwide, and a workforce totaling approximately 2,860 people. Isola facilities are located in Duren, Germany; Cumbernauld, UK; Bottegone, Italy; Fremont, California; Chandler, Arizona; Hoosick Falls, New York; Ridgeway and Pendleton, South Carolina; Suzhou, China; Taipei, Taiwan; Singapore; and Santo Tomas, Philippines.

29 July 2002

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