August 7, 2006

Dear Valued Customer:

Our industry continues to see unprecedented price increases from all suppliers of our basic raw material components such as benzene, styrene, ethylene glycol, fiberglass, film, and other petrochemicals. Each of these is critical in the manufacture of Fiberglass Reinforced Panels (FRP). After a comprehensive review of rising market trends, an imbalance in supply, elevated demand for these raw materials, and the increased costs associated with the manufacture of FRP, it has become apparent that these costs will continue to rise at an alarming rate until capacity issues in the petrochemical industry are resolved. At this time, we do not see an end to demand outpacing supply in many of our required petrochemicals.

In the past 18 months, we have been able to absorb price fluctuations and increases supported by our efficient purchasing, Six Sigma, and ISO 9000 practices. However, after continuing to absorb most of these additional raw material increases, we must pass along a portion of these to our customers.

As a result of factors mentioned above, Glasteel is implementing a price increase of 8% on FRP panels, moldings and accessories effective on orders September 4, 2006. Please contact your Regional Sales Manager or Customer Service representative with any questions or concerns.

Thank you for your business and cooperation during this volatile period. Please be assured that Glasteel will continue to provide you with quality products at the most competitive price.

Sincerely,

Javier Vasquez
Vice President Sales & Marketing