Höganäs AB buys American iron powder manufacturer

3/7/2000 3:08 AM EST

As a further step in its establishment strategy for the North American
market, Höganäs AB has entered into an agreement with Zemex Corporation
whereby Höganäs is to acquire Pyron Corporation, a subsidiary of Zemex.

Pyron Corp. produces both atomized and sponge iron powders. Atomized iron
powder is used principally for component manufacture. Pyron Corp.'s sponge
iron powder has unique properties and is used mainly in a number of
special applications including production of friction materials. Pyron
Corp. holds a share of about 8% of the North American iron powder market.
The company's principal base of operations is at Niagara Falls, NY, and it
has a blending facility in St. Mary's, PA. The total number of employees
is about 120. The company is in need of investment for continued ex-
pansion.

In addition to giving a significant boost to Höganäs' market share in
North America, this acquisition is expected to yield substantial synergy
effects, e.g. through technology transfer and utilization of Höganäs'
international marketing organization to sell Pyron Corp.'s unique
products. Further synergies will be achieved by coordination of Pyron
Corp.'s planned investments with conversion of the recently acquired
FirstMiss Steel mill into a high-efficiency production facility for
atomized powder.

The transaction will also involve Zemex's subsidiary Pyron Metal Powders
Inc., which will be sold in a related transaction to ACuPowder
International, LLC. Pyron Metal Powders' principal products are copper and
bronze powder, which are manufactured at two plants in Tennessee.

The value of the combined transactions will be about MUSD 41 subject to
closing adjustments. Pyron Corp.'s operations are expected to make a
positive contribution to the Höganäs Group's pre-tax profits for the year
2000, and the acquisition will not generate any goodwill. The purchase is
subject to approval by the American antitrust authority.

Toronto 6 March 2000


Claes Lindqvist
President and Chief Executive Officer