Hexcel’s industrial segment records sales of our products to a wide range of applications and markets. The largest of these markets is for recreational products. In 1999 the fashion-dependent ski and snowboard business entered a period of stability, resulting in Hexcel experiencing some modest growth in this segment. Hexcel remains the main supplier and partner for winter sports customers due to our full product offering (prepreg, honeycomb, laminates, polyurethane systems) and the constant development of new products within the range. The market for tennis racquets is also strong and Hexcel’s prepreg business is growing in this area. Likewise, the launch of a new prepreg resin system has also enabled us to successfully re-enter the golf shaft market, which is both price competitive and technically demanding. Our strong position in the market for composite bikes was maintained, particularly in the US, where we are the sole source composite materials supplier to Trek, whose bike was ridden to victory in the 1999 Tour de France.

Other industries have begun to recognize the benefits of composites and are incorporating them in their latest product designs. Consequently, Hexcel is steadily growing and is involved in significant long-term development programs in all areas of surface transportation--road, rail and sea.

Sales to the rail industry continue to grow over time, with applications diversifying to include composite structures in addition to the interior panels business. Applications for advanced composites in cars and trucks are in their infancy, but Hexcel is well positioned to develop significant new business in the automotive industry. Our products offer cost-effective solutions to many of the challenges that the industry is facing, from increased safety to improved fuel efficiency. For example, our honeycomb products have found recent application in energy-absorbing headliner materials for several major automobile platforms.

Growing industries like wind energy are also taking advantage of the unique properties of composites in their product design. Companies in this market are using our materials to develop powerful and efficient wind turbine blades for a new growing source of “green,” renewable energy. Hexcel materials are also found in a broad array of other applications like fabrics used for window blinds, architectural facings and soft body armor. As industrial uses for Hexcel materials grow over time they will become larger contributors to the company’s revenues.