ITWTF Americas

July 11, 2003 - ITWTF Americas

To our colleagues & customers in the ttr industry,

Our market faces continuing challenges, including soft demand and financial pressures throughout the supply chain. Regrettably, some recent public pronouncements by Sony Chemical seem to have fueled these challenges by signaling an intent to price its competitors out of the market. Statements attributed to Sony Chemical include:

• "Through aggressive pricing strategies we believe we can cut our competitor numbers from 19 or 20 down to five."
• "Every morning, people in this industry wake up realizing they are not making money. But nobody leaves. The only way to correct the problem is for stronger companies to drive some of the smaller players from the market."
• SCCA reduced prices by 11% in 2002. …And Oliverio said the company will reduce its prices another 11% in the first six months of 2003.

Scan - The Data Capture Report, December 27, 2002

Then, on May 30, IIMAK filed an antidumping petition with the U.S. government claiming that imports of certain types of thermal transfer ribbons from France, Japan and Korea are unfairly priced and injuring IIMAK and other U.S. producers -- including Sony Chemical. As one of the targets of IIMAK's petition, ITW Thermal Films firmly believes the allegations by IIMAK are unfounded in several critical respects. We believe our sales are priced fairly and we further believe that IIMAK has mischaracterized the U.S. industry, which should properly include our own production in Michigan. In light of IIMAK's actions and Sony's recent statements, we urge you to consider carefully the policies and practices of your auto-ID consumables vendors/partners.

Changes will undoubtedly continue to occur in our market. One thing that will not change, however, is that ITW Thermal Films will always strive to provide the highest level of quality and performance possible to our distribution partners and customers. ITW Thermal Films and our Chicago-based parent company Illinois Tool Works remain committed to our central business philosophy - Leadership in a Rapidly Changing Market. ITW's proven track record of performance and customer service is built on a tradition of excellence & integrity. Our financial position remains very strong, and we are steadfast in our commitment to the North American market and to your success in it.

Please find enclosed a copy of recent correspondence on the antidumping matter from our General Manager, Pete Gallette. Rest assured that ITW will respond fully to the IIMAK lawsuit, and we will continue to keep you informed of relevant developments in the case. Please visit the "Latest News" section at www.itwthermalfilms.com for updates. In addition, please do not hesitate to contact Pete or me directly with any questions or concerns.

Sincerely yours,

Kent Kisselle
Business Unit Manager
ITW Thermal Films - The Americas

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