Zagis USA To Build Cotton Processing Facilities In Louisiana

Lacassine, La.-based Zagis USA – a newly formed enterprise between majority owner Grupo Zaga S.A.
de C.V., a Mexico-based conglomerate, and several North Carolina textile executives – has begun
construction on the first of two new textile mills it will operate in Louisiana to produce cotton
sales yarn.

In all, Zagis plans to invest $75 million in the two facilities – the first of which will be
located in a 200-acre industrial park in Jefferson Davis Parish in southwest Louisiana – and employ
160 workers. According to the Louisiana Economic Development Department (LED), the project is the
first substantial cotton-processing-related investment to be made in the state in many years.

“Zagis chose Louisiana because of its location relative to raw material, its infrastructure –
interstate, rail, ports – and the strong entrepreneurial support from Louisiana departments of
Economic Development and Agriculture,” said Dan Feibus, COO, Zagis USA.

LED notes that those advantages will enable the new company to have among the lowest
manufacturing costs both in the United States and worldwide. In addition, the company will export a
value-added product made from Louisiana-grown cotton.

“This represents a significant shift for the cotton industry, particularly here in
Louisiana,” said Stephen Moret, secretary, LED. “Historically most of Louisiana’s cotton has been
shipped out of state in raw, unprocessed form, headed for export markets. Once phase two is
complete, the Zagis mills could utilize up to 15 to 20 percent of Louisiana’s cotton crop to spin
cotton yarn right here at home.”

Phase one  of the Zagis project is expected to be completed by late fall 2008, and the
second phase is planned to begin in early 2009.

June 24, 2008