Grace Announces Strategic Evaluation of Its Washcoat Business

COLUMBIA, Md.--Grace Davison, an operating segment of W. R. Grace & Co. announced today that it is reviewing strategic alternatives for its washcoat product line, based in Cincinnati, Ohio. These products are used primarily in the manufacture of automotive emissions control catalysts, an integral component of catalytic converters for combustion engines. The washcoat product line constitutes less than 5% of Grace Davison’s annual sales.

“We are assessing how these products fit into our long-term growth strategy,” said Greg Poling, President, Grace Davison. “Though our washcoat products enjoy a strong business position, with valuable technology, they are not part of our core product portfolio. We are focused on determining the best option for the products, customers and employees of this business.”

Grace has identified a target of the first quarter of 2007 to complete this review.

Grace is a leading global supplier of catalysts and other products and services to petroleum refiners; catalysts for the manufacture of plastics; silica-based engineered and specialty materials for a wide-range of industrial applications; specialty chemicals, additives and materials for commercial and residential construction; and can sealants and coatings for food packaging. With annual sales of more than $2.5 billion, Grace has more than 6,400 employees in nearly 40 countries. For more information, visit Grace's web site at www.grace.com.

This announcement contains forward-looking statements that involve risks and uncertainties, as well as statements that are preceded by, followed by or include the words "believes," "plans," "intends," "targets," "will," "expects," "anticipates," or similar expressions. For such statements, Grace claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results might differ materially from those projected in the forward-looking statements. Factors that could cause actual results to materially differ from those contained in the forward-looking statements include: Grace's bankruptcy and proposed plan of reorganization, Grace's legal proceedings (especially the Montana criminal proceeding and environmental proceedings), the cost and availability of raw materials, especially natural gas and petroleum-based raw materials, Grace's unfunded pension liabilities, costs of environmental compliance, risks related to foreign operations, especially, security, regulation and currency risks and those factors set forth in Grace's most recent Annual Report on Form 10-K, quarterly report on Form 10-Q and current reports on Form 8-K, which have been filed with the Securities and Exchange Commission and are readily available on the Internet at www.sec.gov. Reported results should not be considered as an indication of future performance. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. Grace undertakes no obligation to publicly release any revisions to the forward-looking statements contained in this announcement, or to update them to reflect events or circumstances occurring after the date of this announcement.