From: travis.mccullough@enron.com
To: julia.murray@enron.com, anne.koehler@enron.com, dan.lyons@enron.com, richard.sanders@enron.com
Date: 2000-08-05 10:45:00+00:00
Subject: FYI -- Kafus Press Release Friday afternoon

Kafus Cash Crunch
VANCOUVER, B.C.--(BUSINESS WIRE)--Aug. 4, 2000--Kafus Industries Ltd. 
(AMEX:KS - news) reported today that its Board of Directors has accepted the 
resignations of Mr. Randal Maffett, Enron North America Corp.'s 
representative, Mr. Christopher Carl the President of The CanFibre Group Ltd. 
for conflict of interest reasons, and Mr. Peter Schlesinger and Ms. Lee Ann 
Wolfin MacKenzie for personal reasons, as Directors of the Company. 
Kafus is now experiencing a critical shortage of working capital primarily 
attributable to: 
The losses still being incurred by and the continuing cash requirements of 
its subsidiary's CanFibre Riverside plant which in turn is primarily 
attributable to the delays in the start-up of the plant as a result of 
problems with Stone & Webster Engineering Corporation and their subsequent 
bankruptcy. 
The losses being incurred due to the delayed achievement of full production 
levels of its subsidiary's Bio-Composites Indiana plant. 
Losses sustained by and continuing cash requirements of its subsidiary with 
respect to kenaf related products. 
Corporate overheads and costs. 
Additionally, Enron North America Corp. has informed the Company that it does 
not intend to provide any further funding for the Company. In light of the 
current financial difficulties, the Kafus Board of Directors has implemented 
the following measures: 
Immediate search for an investment banking firm/advisor able to advise Kafus 
on corporate reorganization and refinancing which could include the sale or 
spinoff of its subsidiaries and/or a takeover of Kafus. 
An immediate cutback on operating overheads to the minimum required to 
sustain Kafus as an operating entity. 
An immediate cutback on all expansion activities. 
Closure of all Kafus offices with the exception of its Vancouver 
headquarters. 
Acceptance of the resignations of Mr. Mike McCabe, President and Mr. Tony 
Valentine, Chief Financial Officer. 
Search for a new Chief Executive Officer. 
Further, in the event that Kafus is unable to obtain additional financing, it 
may be forced to take action to protect its business. 
As well, the Company has been informed by AMEX that it no longer meets the 
exchange's continued listing guidelines. As such, there can be no assurances 
that the listing will be maintained. 
Kafus is an emerging global manufacturer of superior materials produced from 
sustainable resources. 
The foregoing contains forward-looking statements which are subject to 
contingencies and uncertainties. Such forward looking statements are not 
guarantees of future performance, and are based on numerous assumptions about 
future conditions that could prove to be inaccurate. Actual events, 
transactions, and results may differ materially from anticipated events, 
transactions or results described in such statements. Material uncertainties 
about the future of the company exist. Kafus is subject to a number of risks 
and uncertainties which are set forth in its filings with the Securities 
Exchange Commission. 




Travis McCullough
Enron North America Corp.
1400 Smith Street EB 3817
Houston Texas 77002
Phone:  (713) 853-1575
Fax: (713) 646-3490