Press release

AVGOL sells 20% stake to Israel Petrochemical and announces expansion to Russia

Tel-Aviv, Israel, July 25, 2006 (Press Release) - In June, AVGOL Nonwovens Industries completed the sale of 20% of the company's outstanding shares to Israel Petrochemical Enterprises "IPE," who also owns a 50% stake in Carmel Olefins, a PP and PE resin producer in Israel. Mr. Nir Peleg, CEO, reports that the partnership with IPE further enables Avgol to "globalize the Avgol brand." In addition, Mr. Peleg confirms Avgol's next factory expansion is underway in Eastern Europe to serve the emerging markets in Eastern Europe, Russia, the Ukraine and "Stan" countries. The factory will start operations by 4q07 and operate the company's 10th Reicofil spunmelt nonwovens line. Avgol prefers to maintain confidentiality of the specific location and will publicly reveal at some later date.

Mr. Peleg is pleased to report that the company's sales in 2006 are on pace to reach USD$220MM, up from USD$160MM in 2005, with increasing net profit resulting from full utilization of its 3rd Reicofil line started up in its North Carolina factory in October 2005. AVGOL attributes these increases for 2006 to the robust demand for the company's ultra lightweight spunmelts produced across Avgol's nine Reicofil lines in Israel, China and the USA.

Mr. Peleg states that although we are a relatively small company, we are doing our best to emulate the multi-national companies' philosophy of "think global and act local." We continue to leverage our competitive advantage of efficiently employing young Reicofil spunmelt assets with innovation, execution and hands-on management across strategic geographies for consumer and industrial product applications. By combining our technical and production know-how with targeted marketing and servicing of our bundle of quality spunmelt products, our organization has become a very reliable material supplier for our global and regional customers.