World's State-of-the-Art Facility Includes
Advanced Research & Testing Center

BOSTON, MA Oct 4, -/E-Wire/-- Kafus Bio-Composites Inc., a subsidiary of Kafus Industries Ltd. (AMEX: KS), announced that on October 1, 1999 its subsidiary, Indiana Bio-Composites LLC, began commercial operations at its natural fiber composites manufacturing facility located in Elkhart, Indiana.

Construction of the 55,000 sq.ft. facility located on a 10 acre greenfield site began in February of this year and was completed on time and under budget in mid-September.
Kafus Bio-Composites Inc. have begun shipments under existing purchase commitments for the majority of its production capacity from three Tier1-automotive suppliers. They, in turn will us Kafus Bio-Composites’ Flexform mats to manufacture finished interior automotive trim components in automobiles and trucks for the big three and other US automotive OEM manufacturers for the next three model years.

Current applications for Kafus's; natural fiber components include red deck trays, full door panels, bolsters, trunk liners, door trim, headliners and related components.

The Kafus Bio-Composites’ manufacturing line blends natural fibers with polymers to produce a lightweight, lower cost substrate for compression molding applications. The main natural fiber used in manufacturing at Elkhart is kenaf, which is grown at Kafus’ kenaf operations in Lasara, Texas.

Kafus natural fiber composites are designed as an alternative to traditional composite materials such as fiberglass reinforced plastics. Marketed as Flexform mats and panels, Kafus’ bio-composites can be recovered, reused and recycled. Additionally, they offer higher strength with lower weight and they are less likely to shatter upon impact or warp under extreme temperature changes. Most importantly, the use of natural fiber composite panels dramatically reduce the molding time of 3-D parts; lower the emissions of toxic V.O.C.’s and reduce weight while improving the performance of end products.

Kafus’ Indiana Bio-Composite plant is designed to produce over 100 million sq. ft. annually of natural fiber based Flexform mats and panels for the automotive building and furniture industries. The plant is designed to meet multiple product specifications and designs using highly automated equipment. Initially the Elkhart facility will operate on a single line producing 55 million sq.ft. of Flexform fiber composite mats designed specifically for automotive use. Kafus’ planned construction of a second line will increase production to its full design capability of over 100 million sq.ft. annually.

Kafus Bio-Composites Inc. is continuing to develop new bio-composite based component applications for Visteon Automotive Systems, an enterprise of Ford Motor Company7, under an existing joint development agreement and for other customers in the trucking and recreational vehicle industries. Kafus also believes that their natural fiber composites have significant applications in the furniture, aeronautical, packaging and interior design industries.

Kafus’ Elkhart facility contains a state-of-the-art research, development and testing laboratory with complete ASTM testing capabilities and large-scale compression molding press line. These facilities will permit Kafus Bio-Composites and its customers to design and test new product applications for Kafus’ unique Flexform natural fiber composite mats and panels. This facility ensures Kafus’ position as a global leader in the development of natural fiber components as replacement for traditional composite materials.

An emerging global manufacturer of superior materials produced from sustainable resources.

The foregoing contains forward-looking statements, which are subject to contingencies and uncertainties. Such forward looking statements are not guarantees of future performance and are based on numerous assumptions about future conditions that could prove to be inaccurate including without limitation, the assumption that Kafus will be able to raise the necessary financing to develop its projects and that there is market acceptance for its products. Actual events, transactions and results may differ materially from anticipated events, transactions or results described in such statements. Material uncertainties about the future of the company exist. Kafus is subject to a number of risks and uncertainties which are set forth in its filings, with the Securities Exchange Commission.

SOURCE: Kafus Industries Ltd.

Tony Francel, Manager, Investor Relations,
(888) 333-5377, Fax: (941) 698-8920,
or David Agneta, President,
Kafus Bio-Composites,
(781) 326-5001, Fax (781) 326-5105