FORT SASKATCHEWAN, ALBERTA, CANADA - The Westaim Corporation will rapidly grow its high-potential technology businesses in 1998, shareholders were told today at the company’s Annual Meeting of Shareholders.

“We have exceeded every performance milestone that we set for 1997,” said Westaim President and CEO Kevin Jenkins. “We have three profitable industrial businesses and three high-potential technology businesses – two of which are entering the commercial marketplace this year. The fundamentals and the leadership are in place to quickly grow our technologies into businesses that will create significant value for Westaim shareholders.”

During the past year, Westaim has simplified its operations to increase the profitability of its industrial businesses and to focus only on emerging businesses with high potential.

“A company with nearly a $700-million market cap cannot play in small industries with small potential,” said Jenkins. “We are aggressively growing our three technology driven businesses and expect that each one of them will be a significant company in five years. We will maximize the potential of our three technologies through internal growth, acquisitions, or joint ventures.”

In 1997, Westaim sold its money-losing cobalt and battery powders businesses, leaving three industrial businesses – coin blanks, chemicals and aerospace materials. In total, the three remaining industrial businesses generated revenues of almost $90 million in 1997, with operating profit of more than $21 million.

Technology Businesses

Westaim’s three emerging technology businesses are Westaim Biomedical, Westaim Surface Engineered Products and Westaim Advanced Display Technologies. In 1997, each unit was transformed into a separate business unit with its own President and management.

“Each of our technology businesses will become more independent and more focused as they enter into the marketplace,” said Jenkins. “New opportunities will be identified and we will move quickly to capture significant market share for each of our technologies.”

Westaim Biomedical is the first of the new technologies to enter the marketplace with the launch of Acticoat® antimicrobial barrier for burn patients in March during the American Burn Association conference. Ongoing clinical studies with burn patients using Acticoat® dressings have established credibility with the medical community, and new clinical studies involving other applications of the technology are slated to begin.

Acticoat® biomedical coating technology uses thin, soluble silver films to release an effective concentration of antimicrobial silver for several days. Silver is well known for its ability to fight infection. Studies have demonstrated the product’s effectiveness in killing bacteria. Initially used with burn wound dressings, other potential uses include chronic wound care for diabetic, venous stasis and pressure ulcers and infection control in catheters and orthopedic devices. Westaim chose the burn wound market as the initial target for Acticoat® technology because the risk of infection is very serious in large, high severity wounds.

Westaim Surface Engineered Products will be the second Westaim technology-driven business to enter the marketplace when its new commercial production facility in Edmonton opens in the fall of 1998. It is expected to be profitable by the end of 1999. The initial market for Westaim’s coating technology will address the $2-billion problem of coke build-up in the ethylene industry.

The first product line, called CoatAlloy-I, will consist of standard commercial-alloy steel tubes and fittings whose inner walls are coated using Westaim’s technology. The selected tubes and fittings, which will be sourced from major producers in Japan, Europe, Canada and the United States, have an established performance record in an uncoated condition. When coated, they provide significant value-added performance to the end user. CoatAlloy-I can increase the capacity of ethylene plants by 2% to 8%, and lead to lower unit production costs and increased profitability for ethylene producers. Westaim has completed three commercial furnace retubes in three different furnace types.

Building on its color breakthrough in 1997, Westaim Advanced Display Technologies is expected to continue advancing the technical development of its solid state displays with an 8.5-inch display expected by mid-1998, and a 14 to 17-inch monitor-sized display by year end. Westaim Advanced Display Technologies will also assess potential markets for its flat panels and develop a plan on how to quickly enter into the most viable and profitable markets.

The Westaim Corporation’s portfolio of technology businesses are biomedical coatings, surface engineered products and solid state flat panel displays. Its industrial businesses produce coin blanks, aerospace materials and chemical products. A TSE 300 company, Westaim’s common shares are listed on The Toronto Stock Exchange, The Alberta Stock Exchange and the Montreal Exchange under the trading symbol “WED”.

For more information contact:

Tony Johnston
Senior Vice President, Corporate Affairs
(403) 234-3103
tjohnsto@westaim.com
website: www.westaim.com