Prime Tanning Company Announces Facility Consolidation - SNEWS

Prime Tanning Company Announces Facility Consolidation

Prime Tanning Co., Inc. ("Prime") has announced its intention to cease leather finishing operations at its Berwick, Maine leather finishing facility and transition all of Berwick's production volumes into its Hartland, Maine facility. Transition of leathers between the two facilities is already underway, and the Company believes it will have the balance of the leathers transitioned by October 2008.
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BERWICK, Maine -- Prime Tanning Co., Inc. ("Prime") has announced its intention to cease leather finishing operations at its Berwick, Maine leather finishing facility and transition all of Berwick's production volumes into its Hartland, Maine facility. Transition of leathers between the two facilities is already underway, and the Company believes it will have the balance of the leathers transitioned by October 2008. Prime Tanning merged with Cudahy Tanning in Milwaukee, Wisconsin and Irving Tanning in Hartland Maine in November 2007, and since that time has been engaged in an intensive domestic reorganization to improve efficiencies and profitability. As part of this reorganization, the Cudahy facility was closed in May 2008 and its leather volumes successfully transferred into Prime's Hartland finishing facility.

Prime will work with state and local agencies to organize the facility closure, as well as provide ongoing job transition support for the employees involved. While 150 individuals will be affected by closure of the Berwick finishing operations, employment levels at the Hartland facility will rise as a result of the increased production there. Prime will continue to use its Berwick offices as its temporary headquarters while it seeks a sale of the facility.

Prime's CEO Robert Moore commented: "This was a very difficult but necessary decision for Prime as we work to streamline our domestic operations and improve profitability. Like many manufacturing businesses in the U.S., we have been adversely and negatively affected by unprecedented increases in the cost of energy and chemicals and the general economic slowdown. These unforeseen developments have hastened our need to eliminate excess costs and overhead, and our success as a company depends upon our ability to act decisively to achieve that result. We continue to believe the very best way to serve our loyal customers is as a stable, profitable, and consistent supplier, and this reorganization will ensure that we continue to meet that objective."

On March 31, 2008, Prime announced its intention to merge with Shanghai Richina Leather Co., Ltd. ("SRL") to form Prime Leather International, which will form one of the leading suppliers of leather worldwide. This transaction is still expected to close in the fourth quarter of this year.

About Prime Tanning
Prime Tanning Company, Inc. operates the largest vertically integrated wet blue and side-leather finishing tanneries in North America, with annual capacities of 125 million feet and 35 million feet after the Berwick closure, respectively. The Company produces side-leather for the largest and best known leather brands in the world, with products that serve high quality footwear, handbag, upholstery, and specialty markets worldwide, as well as the U.S. Military. The Company operates facilities which are ISO 9001, ISO 14001, and includes the first BLC Silver Medal certified wet blue tannery in the world.

About Prime Leather International
Prime announced on March 31, 2008 its intention to merge with Shanghai Richina Leather Co. Ltd ("SRL") to form Prime Leather International, a leading supplier to the world's top leather brands. SRL finishes over 96 million feet of leather annually at its facility in Shanghai, China and is a leading supplier to the bovine shoe, lambskin garment, and automotive leather markets. SRL has consistently provided quality and environmental compliance leadership in the Chinese tanning industry and it is ISO 14001 certified as well as BLC Silver Medal certified. The combined business will have global capacity to finish over 130 million feet of finished leather for customers in the U.S. and Asia, as well as end-to-end environmental stewardship second to none in the leather industry. Prime and SRL executed a management agreement on May 1, 2008 that combined their global management, marketing, sales, and customer service teams into one entity to deliver significant synergies to the global customer base immediately. The two companies expect to finalize their legal merger in the fourth quarter of 2008.

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