ZCL Composites Inc. Reports Second Fiscal Quarter Results

For Immediate Release

Edmonton, Alberta November 8, 2004... ZCL Composites Inc. (TSX:ZCL) today announced record results for the second quarter ended September 30, 2004. Revenue in the second quarter increased by 39.6% to a record $11.0 million from $7.9 million for the quarter last year. Net income for the quarter increased to a record $1.2 million from $97,000 in 2003, and basic and diluted earnings per share increased to $0.07 from $0.01 for the quarter last year.

For the six-month period, revenue increased by 13.2% to $17.3 million from $15.3 million last year. Net income for the six months increased to $1.3 million from $333,000 in 2003, and basic and diluted earnings per share increased to $0.07 from $0.02 for the period last year.

The outlook for the downstream and upstream sectors of the petroleum industry, as well as other traditional markets, continues to be very positive for this fiscal year. After a slow start, activity and the order backlog picked up during the first quarter and remained strong through the second quarter. The third quarter is also off to a strong start. The steel tank manufacturing business, acquired from Durex Steel & Alloy Industries Ltd. ("Durex") during the first quarter, has been integrated into the overall liquid storage operations and contributed to revenue. Historically, the second and third fiscal quarters have the highest levels of activity, corresponding to the seasonality of the installation of underground liquid storage systems in Canada.

The increase in net income and earnings per share in the second quarter and six-month period as compared to last year was due to the higher revenue. In the second quarter last year, the $880,000 provision for impairment of the agreement receivable from ZCL Enviro systems, Inc. decreased net income by $580,000 or $0.03 per share.

Cash used in operating activities during the second quarter this year was $202,000 ($730,000 for six months), compared to cash flows from operating activities of $1.0 million ($1.6 million for six months) last year. This decrease was largely due to the timing of sales (high sales later in the period with the resulting higher level of accounts receivable at September 30, 2004) and the build-up of inventories this year. Inventories have been maintained at higher levels to meet orders and deliveries in the second and third quarters. The first annual dividend of $0.06 per common share was declared in the first quarter this year and dividends of $1.1 million were paid in the second quarter. The business assets of Durex were purchased for cash of $1.2 million in the first quarter this year.

The Company continues to focus on the development and marketing of the tank lining technologies, as well as other new products. The lining products adapt proven technology from the double wall tank manufacturing processes and leverage core competencies and customer relationships. The development program is on schedule and field trials will commence later this fiscal year. Tank lining is a very large and lucrative international market and, at this time, there are no competitive alternative products in the marketplace. Product development costs of $97,000 (2003 - nil) in the second quarter and $232,000 (2003 - nil) for the six-month period were deferred.

In addition to tank lining, the aboveground storage tank (AGST) market has been targeted for growth. With the acquisition of the business assets of Durex, a full line of products is now offered to existing alliance customers as well as to new customers. This acquisition allows the Company to access the retail AGST market which has eluded it until now.

During the quarter, another significant product milestone was achieved. The Company's home heating oil tank received Underwriters' Laboratories (UL) approval for the USA market. The product previously had Underwriters' Laboratories of Canada (ULC) approval and is currently sold only in Canada. Furnace oil is used for heating in about 8 million households in North America, largely Eastern Canada and North-Eastern USA. A growing concern is leaking tanks and the resulting environmental and liability problems. The Company's product surpassed industry standards and regulations, and offers a new level of security for home owners, insurance companies and lenders.

"The foundation of our success is our commitment and ability to consistently supply the high quality products and services that our customers value," said Ven Côté, President and CEO. "It is with this same commitment that we spotlight the development of our tank lining systems. We are poised to take advantage of this tremendous opportunity with the anticipated marketing of our lining products by the end of this fiscal year."

Mr. Côté added, "We are solidly on target to realize our annual revenue growth objective of 15% to 20%. Notwithstanding the slow start in the first quarter, we achieved a record second quarter and I am confident that we can reach this target again this year."

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.

The unaudited consolidated financial statements of the Company are prepared in accordance with Canadian generally accepted accounting principles. Certain information in this news release may constitute forward-looking statements that are based on current expectations and are subject to risks and uncertainties. Many internal and external factors may cause actual results to differ materially from those expressed or implied. The Company disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events, or otherwise.

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