Engineering News

Pioneer Announces an Agreement to Sell Its
Chlorinated Paraffins Business

Friday June 3, 4:00 pm ET

HOUSTON, June 3 /PRNewswire-FirstCall/ -- Pioneer Companies, Inc. announced that its Canadian operating subsidiary, PCI Chemicals Canada Company, has entered into an agreement providing for the sale of Pioneer's chlorinated paraffins business to Dover Chemical Corporation. In a related transaction, Pioneer's U.S. operating subsidiary, Pioneer Americas LLC, has agreed that at the time of closing of the sale, it will enter into an agreement to supply Dover with chlorine in support of its future manufacturing requirements. Additional terms of the two agreements were not announced. Pioneer does not expect a significant gain or loss associated with the transaction.

PCI Chemicals Canada Company currently manufactures chlorinated paraffins at its plant in Cornwall, Ontario. Dover will supply the needs of the customer base that it is acquiring from Pioneer from its existing chlorinated paraffins manufacturing operations in Dover, Ohio and Hammond, Indiana. After the sale, PCI Canada will cease production of such products at its Cornwall plant. Pioneer's sale of the business follows the recent transfer of its Canadian bleach production operations from the Cornwall facility to PCI Canada's plant in Becancour, Quebec.

It is anticipated that the transactions with Dover will be completed in June 2005, following the satisfaction of certain required conditions to closing, including the consent of the holders of PCI Canada's 10% Senior Secured Guaranteed Notes due 2008 and Pioneer Americas' Senior Secured Floating Rate Guaranteed Notes due 2006 and Senior Floating Rate Term Notes due 2006. Pioneer plans to make arrangements to terminate all operations at Cornwall following the closing.

Pioneer, based in Houston, manufactures chlorine, caustic soda, bleach, hydrochloric acid and related products used in a variety of applications, including water treatment, plastics, pulp and paper, detergents, agricultural chemicals, pharmaceuticals and medical disinfectants. Pioneer owns and operates four chlor-alkali plants and several downstream manufacturing facilities in the United States and Canada.

Certain statements in this news release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. Forward- looking statements relate to matters that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, the non-satisfaction of the conditions to closing the sale and the risks and uncertainties described in Pioneer's filings with the Securities and Exchange Commission. Actual outcomes may vary materially from those indicated by the forward-looking statements.

Source: Pioneer Companies, Inc.

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