The success of ARCEL and SURPASS resins and other NOVA Chemicals Performance Products in 2005 reflects growing market acceptance. We expect the value our customers derive from these products will deliver improved company performance through the industry cycle – and stronger, more stable returns for our shareholders.

NOVA Chemicals sells its Performance Products into high-growth markets. A few examples illustrate how these products deliver more value to customers and endusers, and, as a result, command much stronger margins than standard products.

SPECIALTY FOAM PACKAGING
As direct-to-consumer shipments and global logistics costs continue to dramatically increase, manufacturers require more advanced packaging. ARCEL resin, NOVA Chemicals’ unique interpolymer packaging material, continued to gain market share in 2005. ARCEL virtually eliminates packaging-related product damage and enables shippers to use smaller package sizes, which in turn cuts logistics costs. ARCEL resin sells for more than double the price of standard expandable polystyrene packaging material as it delivers unmatched performance and cost savings to our customers. In 2005, ARCEL gained acceptance as a preferred packaging material for major electronics manufacturers and began to penetrate new growth markets. ARCEL production capacity is expected to increase from 30 million to 100 million pounds per year by the end of 2006.


FOOD SERVICE AND PACKAGING
SURPASS polyethylene resins for thin-wall Injection molding are used in food packaging applications such as margarine lids or ice cream containers. Consumers benefit from the drop-resistance, improved seal and flexibility, while converters find added value in the processability of SURPASS resins. Sales of SURPASS and SCLAIR performance polyethylene products made with Advanced SCLAIRTECH technology grew by more than 50% in 2005.

NOVA Chemicals is a leader in the development of advanced resins for the growing refrigerated and frozen food packaging markets. In 2005, NOVA Chemicals commercially introduced DYLARK FG and ZYLAR EX resins, styrenic co-polymers that extend the temperature range for safe and effective food packaging. DYLARK FG resin is specially designed to deliver high-temperature rigidity and cold-temperature toughness in freezer-to-microwave food packaging. ZYLAR EX resin combines clarity and shatter-resistance at low temperatures for superior refrigerated or frozen food packaging performance.

SURPASS, DYLARK FG and ZYLAR EX resins deliver significant performance advantages – and command significant premiums – compared to standard grades.

HEAVY-DUTY INDUSTRIAL APPLICATIONS
Use of SURPASS Performance Products in heavy-duty industrial applications is growing rapidly due to their superior performance attributes. SURPASS rotational molding resins are designed for three-dimensional applications, such as storage tanks and industrial bins, that require resilience and weight reduction. SURPASS rotational molding resins deliver improved toughness and stiffness versus competitive resins, while offering molders lower processing costs and improved throughput. These SURPASS grades enable converters to make products that can compete with products made from steel, glass, concrete and wood.