ZCL Composites Inc. Reports First Quarter Results

August 19, 2002

Edmonton, Alberta August 19, 2002.... ZCL Composites Inc. reports a net loss of $93,000 for the first quarter ended June 30, 2002, down from net earnings of $387,000 for the quarter last year. Basic and diluted loss per share were $0.03 for the first quarter, as compared to net earnings of $0.02 per share for the quarter last year, after adjusting for costs of the convertible subordinated debenture.

Revenue for the quarter ended June 30, 2002 was $4.9 million, down from record levels of $6.6 million for the quarter last year.

Notwithstanding the economic slowdown and uncertainty in the past year, the North American petroleum industry is recovering and many companies continue to forecast major capital expenditures for the remainder of this year. Revenue decreased from record levels last year, as the reduced level of activity in the latter part of 2002, where various upgrade and new installation programs in both the upstream and downstream sectors of the petroleum industry were deferred, continued into the first quarter. Measures taken over the past several years to reduce costs have diminished the impact of a general slowdown in business.

"With the anticipated upturn in our primary markets, we expect to sustain our earnings in our core business over the next year," says Ven Côté, President. "We have a solid core liquid storage systems business in Canada. Profitable growth will result from related products, such as tank lining systems, introduced into existing and new markets. The recently announced acceptance of the financing proposal from ARC Financial Corporation is an important step to implement this growth strategy and provides the funds we need to repay our debenture."

ZCL Composites Inc. trades on the Toronto Stock Exchange under the symbol "ZCL" and is Canada's largest manufacturer of fiberglass underground storage tanks. ZCL's complete fuel storage systems marketed under the "Prezerver" trademark carry a $2 million warranty against pollution.

For further information, please contact:

Venence G. Côté President & CEO ZCL Composites Inc. (780) 466-6648 ven.cote@zcl.com

Tony G. Barlott VP Finance & CFO ZCL Composites Inc. (780) 466-6648 tony.barlott@zcl.com