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Elementis PLC (ELM)

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Tuesday 16 October, 2001

Elementis PLC

Trading Statement

Elementis PLC
16 October 2001

16 October 2001





                     ELEMENTIS plc TRADING UPDATE



At the time of the interim results announcement at the beginning of August,
Elementis indicated that market conditions were in line with those of the
first half of the year, but that the outlook for the US economy, and the 
resulting impact on the global economy, was the most significant factor in 
determining short term prospects for the Group.

Since that announcement, trading conditions have worsened, particularly in the
US.  Sales for the three months ended 30 September 2001 were 5 per cent lower
in sterling terms than in the comparable period last year, the stronger US
dollar masking lower underlying trading performance. On a constant currency
basis, sales for the quarter declined by 7 per cent. These figures reflect a
further weakening of the US economy in August and a sharp reduction in
business activity since the tragic events of 11 September, resulting in lower
profitability for the quarter than previously anticipated.

The outlook for the final quarter of 2001 and beyond is very difficult to
predict, but it is likely that profit before goodwill amortisation and
exceptionals for the second half of the year will be less than half the level
achieved in the first six months.  This takes into account current sales
levels, higher manufacturing costs per unit resulting from lower short-term
production levels necessary to reduce inventories (particularly affecting
Elementis Pigments) and higher pension costs.  An actuarial valuation of the
Group's UK pension fund as at 30 September 2001 is being undertaken; this is
likely to result in higher pension costs in the fourth quarter of this year.

Increasingly tight controls over working capital and capital expenditure
should ensure that net borrowings at the end of 2001 will be well below that at 
the half year stage.

The usual pre-close period trading update will be given in December.

                                   - Ends -

Enquiries

Elementis plc                                             020 7398 1400
Jonathan Fry            Chairman
George Fairweather      Group Finance Director
Anna Passey             Head of Corporate Communications

Brunswick Group Ltd                                       020 7404 5959
Andrew Fenwick
Rupert Young

Elementis plc
One Great Tower Street
London EC3R 5AH
Telephone: +44 (0) 207 398 1400
Facsimilie: +44 (0) 207 398 1401