NOVA Chemicals took aggressive action and made structural changes in 2005 to drive substantial and lasting bottom-line improvement in the Company’s Styrenics Business.

The global styrenics industry has endured several difficult years, and the resulting performance of our Styrenics Business has been disappointing. NOVA Chemicals anticipates improving margins from both its recent actions and from the expected tightening of supply/demand throughout the styrenics chain in the 2006 – 2008 timeframe.

ACTION IN EUROPE
Due to excess industry capacity and low operating rates, the European Styrenics Business accounted for an average of $30 million in annual EBITDA losses since 2000. On October 1, 2005, NOVA Chemicals combined its European Styrenics assets in a cashless transaction with those of Innovene to form NOVA Innovene. The 50:50 joint venture will generate cost synergies, which are expected to deliver $60 million per year by 2008.

STYRENE MONOMER BALANCE
NOVA Chemicals has been obligated to buy higher-cost styrene monomer due to two long-term purchase contracts, while our more cost-effective plants ran at less than optimal rates. Had we been able to run at higher operating rates, EBITDA losses would have been reduced by an average of $30 million per year during the last five years. The option to terminate these contracts in 2006 and 2007 will enable NOVA Chemicals to use its own, low-cost styrene monomer production.

MANUFACTURING FOCUS ON PERFORMANCE PRODUCTS
In order to reduce costs, NOVA Chemicals continued to re-align its styrenic polymer production assets in 2005, focusing each site on a smaller range of products. Early in 2006, the Company announced plans to close our Chesapeake, Virginia, manufacturing facility by the end of 2006 – an action that will improve utilization rates at other plants and reduce fixed costs by $15 million per year. Upgrades to the Belpre, Ohio, site enabled the Company to move production of select Performance Products to Belpre from other sites to improve overall manufacturing productivity.

During the last two years, the Styrenics Business focused its technical development and capital resources on growing its Performance Products portfolio. These products include ARCEL, DYLARK and ZYLAR polymers as well as efforts to capture downstream value in the construction and packaging markets. We added 70 million pounds of styrenics Performance Products capacity in 2005, to support the expected growth for these high-value materials.

NOVIDESA IN MEXICO
In October 2005, NOVA Chemicals partnered with GRUPO IDESA, a leader in the Mexican petrochemical market, and formed NOVIDESA, a 50:50 joint venture. This joint venture will leverage NOVA Chemicals’ production technology, proprietary construction application designs, and value-added polymer products in Mexico’s rapidly growing construction and packaging markets.