PVAXX Industries Breaks Ground in Bahrain on World's Largest Pallet Manufacturing Facility

Hamilton, Bermuda: 5 July 2004 - PVAXX Industries W.L.L., a wholly owned subsidiary of PVAXX Limited, the Bermuda-based commercial materials sales corporation, today broke ground on its planned 86,700 square metre facility in the Kingdom of Bahrain for the production of shipping pallets manufactured from a patented composite material - the first of facilities to be established by PVAXX Limited worldwide. At full operational capacity, the Bahrain facility will generate annual revenues of approximately $600 million.

The event, held under the patronage of His Highness, Shaikh Abdulla Bin Hamad Al- Khalifa, Southern Governor and Head of the Public Commission for the Protection of Marine Resources, Environment and Wildlife, marks the start of construction on the $85 million project, which is expected to create more than 300 jobs for Bahrainis and represents the first investment in the newly developed Port and Industrial Area at Hidd.

Commenting on the occasion, His Highness, Shaikh Abdulla, said, "We welcome PVAXX and this new and exciting project to the Kingdom of Bahrain. This project marks an important milestone in the development of the Hidd port facility, which will see Bahrain join the ranks of the world's largest ports. Further, coupled with the economic benefits and job creation opportunities this project will provide, it also serves to underscore the vast competitive advantages the Kingdom of Bahrain has to offer both local and international companies across a broad range of industry sectors."

The manufacturing facility has been designed and is being built by Saudi Consulting Services €˜Saudconsult', the oldest engineering company in Saudi Arabia. Once operational, in March 2005, the factory will be capable of producing composite pallets at a rate of approximately 1 million per week, making PVAXX Industries the largest single site global producer of pallets. While there are many manufacturers in the market, the Hidd facility will have the capacity to output in just one month what its largest competitors produce in one year.

Competitive advantages enable PVAXX to produce a cost effective and environmentally sound alternative to those pallets currently on the market. Specifically, the process in the Kingdom of Bahrain combines Polyethylene (PE) with sand to create a lightweight yet very strong composite pallet. With the lowest cost PE in the world and the availability of large quantities of sand and other necessary materials, the Gulf region serves as an ideal location.

According to John O'Doherty, Chairman of PVAXX Limited, "The establishment of this facility puts both PVAXX and the Kingdom of Bahrain on the map as major suppliers to the world's vast pallet market. Leveraging the competitive advantages of the Kingdom of Bahrain and the Gulf region, we aim to introduce into the market a highly competitive and sought after product. Already, we have seen considerable interest from among the world's largest pallet consumers. With the Kingdom of Bahrain as our flagship facility, we are rolling out further manufacturing facilities that are in close proximity to low-cost raw materials."

PVAXX is currently in discussions with officials in the U.S. state of Rhode Island regarding the construction of a similar facility that would use pulverised fuel ash, instead of sand, in combination with PE to manufacture pallets.

The world demand for pallets continues to grow at a rapid pace driven by a strong global trend to palletise all goods for shipment. This demand is highlighted by the fact that the world's largest manufacturing facility, now being built by PVAXX in the Kingdom of Bahrain, will only meet 0.5 percent of the total world market. Within the Gulf region the composite pallet market continues to grow due to a shortage of wood needed in the production of traditional wooden pallets. In other regions growth is being driven by environmental concerns. For example, studies show that in the U.S. more than 40 percent of the domestic lumber market is used to make wooden pallets that, unlike composite pallets, have a short life expectancy.

About PVAXX Industries and PVAXX Limited:

PVAXX Industries is a wholly-owned subsidiary of PVAXX Limited, a Bermuda-based commercial materials sales corporation, listed on the Bermuda Stock Exchange.

This press release may include forward-looking statements about the Company's revenues and earnings and future plans and objectives. Any such statements are subject to risks and uncertainties that could cause the actual results to vary materially.

For more information about PVAXX Limited, headquartered in Hamilton, Bermuda, please see:

www.pvaxx.com.

For international investor relations' matters, please contact:

investorrelations@pvaxx.com

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