Avery Dennison Annouces New Investments in China

Company celebrates 10th anniversary of operations in China; plans to open new research & development center to serve Asia

KUNSHAN, Jiangsu Province, China - May 26, 2005 - At an event marking 10 years of operating in China, Avery Dennison Corporation today announced additional investments to expand operations in the country. Avery Dennison said that it plans to invest approximately $100 million to expand its businesses in China over the next five years. The new investments include the construction of a new research and development center and an additional plant to manufacture specialty tape products, as well as several new plants to produce tags and tickets for the retail and apparel industries.

"Just 10 years after our initial investment, we are delighted to continue expanding in China," said Dean A. Scarborough, president and chief executive officer of Avery Dennison, at a gathering of customers, employees and government officials. "China is one of our most successful markets in the world. We have been growing by more than 20 percent annually for the past six years and now we are the country's largest producer of pressure-sensitive label materials and tags and tickets for the retail apparel markets."

The new research and development facility, which will be known as the Avery Dennison Asia Technical Center, will eventually employ up to 50 research professionals. Located in Kunshan, the state-of-the-art research and development center will support new product development for all Avery Dennison businesses operating in Asia.

The new specialty tape manufacturing site will also be located in Kunshan, and will produce a full array of Avery Dennison brand adhesive tape products for the medical market and other industrial applications.

Avery Dennison has invested approximately $175 million in China since it started operations in the country ten years ago. The Company expects its total investment in China to total more than $275 million by 2010.

With an initial investment of $30 million, Avery Dennison entered China market in 1995 with its first pressure-sensitive adhesive materials manufacturing facility in Kunshan. The Company steadily expanded its China-based operations, opening additional manufacturing plants, as well as sales and distribution centers. In addition to the Kunshan site, the Company currently has operations located in Shanghai, Guangzhou, Tianjin, Beijing, Chengdu, Wuhan, Nansha, Fuzhou, Qingdao, Taiwan and Hong Kong. Operations at the Company's campus in Kunshan have continually expanded and the property is now fully developed. Nearly all of Avery Dennison’s key businesses in pressure-sensitive and graphics materials, retail information services, office products, specialty tapes, reflective materials and performance polymers are now represented locally in China.

In 2000, Avery Dennison opened the world’s first training facility for label printers and converters in Kunshan. The Avery Dennison Self-Adhesive Label Converting College offers technical training to label printers and converters throughout the Asia Pacific region. Offered free of charge, training sessions at the Converting College enable Avery Dennison to share skills and knowledge in self-adhesive label printing and converting with participants in order to help them improve their technical capabilities and grow their businesses. More than 700 label printers from across Asia have completed training at the facility in the five years since it opened.

"We look forward to a long and successful future in China," said Scarborough. "We will continue to invest in expanding our operations in China to keep pace with the rapidly growing demand for our products. As a result of our anticipated growth, we plan to hire up to 1,500 new employees over the next several years in China and we are committed to the professional training and development of the Company's future leaders in China."

Avery Dennison is a global leader in pressure-sensitive labeling materials, office products and retail tag, ticketing and branding systems. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 company with 2004 sales of $5.3 billion. Avery Dennison employs approximately 21,400 individuals worldwide who apply the Company’s technologies to develop, manufacture and market a wide range of products for both consumer and industrial markets.

Products offered by Avery Dennison include Avery-brand office products and graphics imaging media, Fasson-brand self-adhesive materials, peel-and-stick postage stamps, reflective highway safety products, labels for a wide variety of automotive, industrial and durable goods applications, brand identification and supply chain management products for the retail and apparel industries, and specialty tapes and polymers.

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