Further to our US survey

18 September 2001

In answer to your questions: We have consolidated all of our US based tannery operations into our Paul Flagg Leather plant in Sheboygan, WI, to help us improve our efficiencies and control costs. The companies have not merged. Both Midwest and Paul Flagg product lines will be produced in the Sheboygan plant. Paul Flagg Leather has not been sold. Wells Lamont, through our joint venture, Austins Marmon Ltd, has had a presence in Asia for more than 20 years. With the continuing shift of manufacturing to this part of the world, and with the growth of the Chinese economy, our emphasis has certainly grown. All you have to look at is the number of shoe manufacturing plants that are left in the US to realize that the most recent decline in demand for US leather in the US is not a temporary occurrence. However, we also believe that the strong, efficient and innovative producers will find their niches and prosper well into the future. You ask if I think that the move away from the US to Asia is a sign of things to come. I believe it's already here. Allen J Glubka

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