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Visteon and Kafus Environmental Sign Agreement

12 January 1999

Ford Motor Company's Visteon Automotive Systems and Kafus Environmental Industries Sign Agreement To Jointly Develop Natural Fiber Composites for the Auto Industry

                 Ford and Kafus Lead Industry with Initiative
                  to Create More Eco-Friendly Car Interiors

    BOSTON, Jan. 12 -- Kafus Environmental Industries (Amex: KS)
and Visteon Automotive Systems today announced the signing of an agreement
under which the two organizations will collaborate on the development and
production of natural fiber composite materials for use in automobile
interiors.  The decision to use natural fiber composites is a first for
Visteon in the North American market.
    Under the terms of the agreement, Kafus Bio-Composites, a wholly owned
subsidiary of Kafus Environmental Industries, will work in concert with
Visteon to develop various non-woven mats and panel products made from a
combination of kenaf and other natural fibers.  Kafus Bio-Composites will
manufacture proprietary composites under Visteon trademarks.  Visteon will
then produce and market finished components such as door panels, seat backs
and package trays for Ford Motor Company and other auto makers.
    "This agreement with Visteon is the first major step toward Kafus' long
term goal of becoming a global leader in the bio-composites field," stated
David Agneta, Kafus Bio-Composites president.  "By combining various polymers
with kenaf fiber from our fields in South Texas, we can produce stronger,
lighter and safer components for the automobile industry.  We also see
significant applications for this technology in furniture manufacturing,
building and construction, packaging and, eventually, the aerospace industry."
    Stephen M. Delaney, vice president of interior systems for Visteon,
stated:  "Automotive customers are looking for 'green' products and Visteon
takes environmental stewardship and customer service seriously.  Natural fiber
composites offer weight savings, performance enhancements and remarkable
recycling capabilities.  Kafus Bio-Composites will help Visteon accomplish our
environmental and product development objectives."
    Kafus Environmental Industries, through its subsidiary, Kenaf Industries
of South Texas, is North America's leading grower, processor and developer of
kenaf.  This fast-growing, drought-resistant relative of hibiscus is capable
of growing 14 feet in seven months, without the extensive use of pesticides or
herbicides.  The outer bast fibers of the kenaf plant are an ideal substitute
for fiberglass in the production of reinforced plastics.
    Kafus Bio-Composites will blend bast fiber with various polymers to create
flexible non-woven mats.  Visteon will then form these mats into rigid
three-dimensional automotive trim components in a one-step molding process
that is expected to cut current production times in half.  Kafus is currently
planning a multi-million dollar North American facility that will include
fiber blending machinery, a mat line and a fully equipped R&D facility.  The
new factory has a design capacity of 50 million square feet of mat annually.
Kafus plans to strategically develop similar facilities throughout the world.
    Kafus Environmental Industries is led by its chairman and founder, Ken
Swaisland.  "We are committed to becoming a world leader in the manufacturing
of superior commodity materials made from sustainable resources," stated
Swaisland.  "In addition to this venture, our current projects include the
world's first medium density fiberboard plants able to use 100% recovered
urban wood waste; the production of tree-free newsprint and other paper
products; the manufacturing of a cement/fiber alternative to wood and metal
siding; and the conversion of animal and food processing waste into feed and
organic fertilizer."
    "We are building a major international company by changing the status quo
of commodity production," Swaisland added.  "Instead of depleting natural
resources to produce building materials, Kafus is manufacturing superior
commodities made from sustainable agricultural and recycled resources.  We
transform major environmental problems into practical economic solutions for
the long-term benefit of our customers and the public at large."
    Kafus Environmental Industries currently has more than $500 million in
domestic and international projects under development.  The company's
strategic partners include Merrill Lynch, Enron Capital and Trade Resources,
Stone & Webster Engineering, Temple-Inland and Timber Products Company.