There is a silver lining to the very poor business conditions we've experienced. Industry leaders, whether they work for well-financed major oil companies or weakened independent chemical companies, have made very few plans for expansion. It will take a while for confidence, corporate priorities and balance sheet strength to come together to allow major new investments in capacity. Even Middle East companies have been slowed down by political and military risks.

Because it takes 3 to 5 years to site and build a petrochemical/plastic resin complex, there will be very little new capacity brought onstream in our industry for quite some time. If the economic recovery is as strong as economists are now forecasting, we could see a relatively long and strong recovery in our segment of the chemical industry.

All NOVA Chemicals' employees have worked hard to build the right risk/reward balance for our shareholders. We are more excited about our company's future each day and we are certainly ready for the recovery. However, we will not forget how necessary it is for a commodity chemical company to manage the risks and volatility inherent in our business. We will not allow our enthusiasm to get ahead of reality, and we must be ready to deal with a continuation of difficult conditions if that is what comes our way in 2004.

I know we would not be in the position we are in today without the ongoing support of our customers, suppliers, Board of Directors, bankers and investors. We truly appreciate how important they are to our company and understand that difficult conditions require as much from them as they do from each of us.

We look forward to the rewards associated with the strong recovery, whenever it comes. We are committed to continue to improve our company under any economic condition and to deliver on our outstanding potential.

Sincerely,

Jeffrey M. Lipton
President and Chief Executive Officer

February 2, 2004