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[MORTON LOGO]

1021 W. Birchwood Street
Morton, Illinois 61550

P 309 263-263-3300
F 309 263-3216

www.mortongroup.com

MORTON INDUSTRIAL GROUP, INC.

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[MORTON LOGO]

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MORTON INDUSTRIAL GROUP, INC.

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FULL SERVICE CONTRACT MANUFACTURING

MORTON INDUSTRIAL GROUP, INC.

M I S S I O N

Morton Industrial Group, Inc.'s mission is to own and operate highly respected
contract manufacturing suppliers who have significant relationships with
industrial original equipment manufacturers.

POSITIONING FOR THE FUTURE

Manufacturing has been challenged by the longest economic constriction since the
Great Depression of 1928. Faced with economic uncertainty and global competitive
pressures, American industry has responded by adopting new technology, lean
manufacturing techniques and aligning with only the most efficient members of
the supply network. Morton Industrial Group, Inc. has maintained and grown
market share with our prestigious customer base because, like them, we have
aggressively eliminated non-value added costs while pursuing new technologies
and manufacturing techniques.

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SHAREHOLDER INFORMATION

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:

This annual report contains "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements containing the words "anticipates,"
"believes," "intends," "estimates," "expects," "projects" and similar words. The
forward looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results to be materially different from
any future results expressed or implied by such forward looking statements. Such
factors include, among others, the following: the loss of certain significant
customers; the cyclicality of our construction and agricultural sales; risks
associated with our acquisition strategy; general economic and business
conditions, both nationally and in the markets in which we operate or will
operate; competition; and other factors referenced in the Company's reports and
registration statements filed with the Securities and Exchange Commission. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward looking statements. The forward looking statements
contained herein speak only of the Company's expectation as of the date of this
annual report. We disclaim any obligations to update any such factors or
publicly announce the result of any revisions to any of the forward looking
statements contained herein to reflect future events or developments.

CORPORATE OFFICES

Morton Industrial Group, Inc.
1021 W. Birchwood Street
Morton, Illinois 61550
Phone: (309) 263-3300
Fax: (309) 263-3216

STOCK LISTING

The common stock of Morton Industrial Group, Inc. is quoted on The Nasdaq
Small Cap Market under the ticker symbol MGRP.

ANNUAL MEETING

The Annual Meeting of the Shareholders of Morton Industrial Group, Inc. will
be held at the Bertha Frank Performing Arts Center, located at 350 N. Illinois
Avenue in Morton, Illinois on Tuesday, June 11, 2002 at 10:00 a.m. (CDT).

STOCK TRANSFER AGENT AND REGISTRAR

For inquiries about stock transfers or address changes, Shareholders may
contact:
American Stock Transfer & Trust Co.
59 Maiden Lane
New York, New York 10007
Phone: (800) 937-5449

INVESTOR RELATIONS

Shareholders and prospective investors are welcome to call or write with
questions or requests for additional information. Please direct inquiries to:
Kehoe, White, Van Negris & Company, Inc.
766 Madison Avenue
New York, New York 10021
Phone: (212) 396-0606
Fax: (212) 396-9025

INDEPENDENT AUDITORS

KPMG LLP, Indianapolis, Indiana

COUNSEL

Husch & Eppenberger LLC Peoria, Illinois

ANNUAL REPORT ON FORM 10-K

Additional copies of this Annual Report and the Annual Report on Form 10-K may
be obtained without charge by writing to the Company at the address listed
above. These reports are also available to the public on request as required by
the Securities and Exchange Commission (SEC). These statements have not been
reviewed or confirmed for accuracy or relevance by the SEC.

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MORTON METALCRAFT CO. LOCATIONS

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[MORTON LOGO]

M O R T O N  I N D U S T R I A L  G R O U P , I N C .
is a contract manufacturer of highly engineered components and sub-assemblies
for industrial original equipment manufacturers. Its products include metal
fabrications, thermoformed and injection molded components and assemblies for a
broad range of industry segments which include the construction equipment,
agricultural equipment, aerospace, home appliance, computer equipment and
recreational vehicle industries. Morton's superior competitive strengths have
resulted in strong, focused relationships with its prestigious customer base.
Its twelve manufacturing facilities are strategically located in the Midwestern
and Southeastern United States in close proximity to its customers'
manufacturing and assembly facilities. Morton's principal customers include B/E
Aerospace, Caterpillar Inc., Compaq Computer Corporation, Deere & Company, EMC
Corp., General Electric Company and Honda.

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                          1021 W. Birchwood Street
MIDWEST DIVISION          Morton, Illinois 61550
                          Phone: (309) 266-7176
                          Fax: (309) 263-1866

                          400 Detroit Avenue
                          Morton, Illinois 61550
                          Phone: (309) 263-3299
                          Fax: (309) 263-1854

                          2223 W. Altorfer Drive
                          Peoria, Illinois 61615
                          Phone: (309)589-8550
                          Fax: (309)589-8581

                          2080 E. Williams Street
SOUTHEAST DIVISION        Apex, North Carolina 27502
                          Phone: (919) 363-1630
                          Fax: (919) 363-1103

                          835 Salem Road
                          Welcome, North Carolina 27374
                          Phone: (336) 731-5700
                          Fax: (336) 731-8005

                          534 Corbin Road
                          Honea Path, South Carolina 29654
                          Phone: (864) 369-1800
                          Fax: (864) 369-9022

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MORTON CUSTOM PLASTICS LOCATIONS

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[MORTON LOGO]

                          2360 Grand Avenue, PO Box 65337
MIDWEST DIVISION          West Des Moines, Iowa 50265
                          Phone: (515) 225-6707
                          Fax: (515) 225-9673

                          7301 Caldwell Road
SOUTHEAST MOLDING         Harrisburg, North Carolina 28075
DIVISION                  Phone: (704) 454-1278
                          Fax: (704) 454-1311

                          130 Morton Drive, PO Box 378
                          St. Matthews, South Carolina 29135
                          Phone: (803) 655-6000
                          Fax: (803) 655-5678

                          5685 Hwy. 49 South, PO Box 579
FABRICATION DIVISION      Harrisburg, North Carolina 28075
                          Phone: (704) 455-5191
                          Fax: (704) 455-5025

                          4287 Stough Road
                          Concord, North Carolina 28075
                          Phone: (704) 455-5191
                          Fax: (704) 455-5025

                          655 Industrial Drive, PO Box 1160
CENTRAL DIVISION          Lebanon, Kentucky 40033
                          Phone: (270) 692-0901
                          Fax: (270) 692-0411

                          OUR TWELVE MANUFACTURING
                          FACILITIES IN THE MIDWESTERN
                          AND SOUTHEASTERN UNITED
                          STATES ARE STRATEGICALLY LOCATED
                          NEAR OUR CUSTOMERS' MANUFACTURING
                          AND ASSEMBLY FACILITIES.

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BOARD OF DIRECTORS

          WILLIAM D. MORTON, 54, served as Chairman, Chief Executive Officer and
          President of Morton Metalcraft Co. from 1989 until its merger into
          Morton Industrial Group, Inc. in 1998. At that time, he became
          Chairman, Chief Executive Officer and President of Morton Industrial
          Group, Inc.

          FRED W. BROLING, 66, served as Chairman of the Board and Chief
          Executive Officer of US Precision Glass Company since 1998. He served
          as Chairman of the Board and Chief Executive Officer of Plastics
          Specialties and Technologies, Inc. from 1983 to 1998 and PureTec
          Corporation from 1995 to 1998. Mr. Broling became a director of Morton
          Metalcraft Co. in 1989, and upon conclusion of the merger, a Morton
          Industrial Group, Inc. director and is a member of the Compensation
          and Stock Option Committee and is a member of the Audit Committee of
          the Board.

          MARK W. MEALY, 45, has been a Managing Director and currently serves
          as Head of Commercial & Industrial Corporate Finance and
          Mergers & Acquisition Group at Wachovia Securities, Inc. Mr. Mealy
          became a director of Morton Metalcraft Co. in 1995, and upon
          conclusion of the merger, a Morton Industrial Group, Inc. director.

          WILLEM F.P. DE VOGEL, 51, has been President since 1982 of Three
          Cities Research, Inc., a firm engaged in the investment and management
          of private capital. Mr. de Vogel became a Morton Industrial Group,
          Inc. director in 1998 and is a member of the Audit Committee of the
          Board.

MANAGEMENT TEAM

          BRIAN R. DOOLITTLE, Vice President of Sales & Engineering, Morton
          Metalcraft Co.

          BRIAN L. GEIGER, Vice President of Operations, Morton Metalcraft Co.

          ROBERT J. JANECZKO, PH.D., President & Chief Operating Officer, Morton
          Metalcraft Co.

          HASKELL G. KNIGHT, President & Chief Operating Officer, Morton Custom
          Plastics

          THOMAS D. LAUERMAN, Chief Financial Officer, Treasurer and Vice
          President of Finance of Morton Industrial Group, Inc.

          DARYL R. LINDEMANN, Secretary, Morton Industrial Group, Inc. and Vice
          President of Finance & Support Services, Morton Metalcraft Co.

          WILLIAM D. MORTON, Chairman and Chief Executive Officer, Morton
          Industrial Group, Inc., Morton Metalcraft Co. and Morton Custom
          Plastics

          CRUGAR B. TUTTLE, General Manager and Vice President, Morton Custom
          Plastics

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TO OUR SHAREHOLDERS AND EMPLOYEES

[PHOTO OF WILLIAM D. MORTON]

          After surviving the 1999 agricultural depression, the 2000
          construction recession, and the 2001 general economic downturn, we
          found ourselves, our customers, and our country responding to the
          national crisis resulting from the 9/11/01 terrorist attacks on New
          York City and Washington D.C. and our corresponding "War on
          Terrorism". Customers have had, in almost all cases, reduced demand
          for their products. Overall, this economic softening has resulted in
          our 2001 revenues being off from 2000 by 15% instead of an expected
          increase of about the same amount.

          In the years prior to this current environment of uncertainty, (during
          1998, 1999 and 2000), we expanded our production capacity in response
          to major customer opportunities and sought attractive strategic
          acquisitions. Today we find ourselves with excellent but
          underutilized assets which are well positioned to respond to the
          economic recovery anticipated in late 2002.

          Across our organization, we have made dramatic improvements in the
          efficiencies of our operations. The management structure has been
          flattened, staffing has been reduced from a peak of 3,000 full-time
          equivalents in early 2000 to a current level below 1,850. At the same
          time, facilities are being consolidated in both our metals and
          plastics businesses.

          Each of our factories has engaged outside resources to lean out their
          respective manufacturing activities with improvements at varying
          stages of implementation. We have utilized Value Added Supply Team
          (VAST) methodology to implement a results oriented cultural change in
          our Midwest locations, lowering our cost structures dramatically. We
          are now implementing 6 Sigma at all company locations which will
          continue to help drive us to world class standards during 2002 and
          beyond.

          Competing in a global economy will continue to be challenging in 2002.
          But we continue to manage for the long term and will emerge from the
          recession with a strong market position, a lower cost structure, a
          talented work force and a superior supplier network. The business
          strategies we are pursuing today will put us in a solid position to
          grow profitably and provide attractive returns for our stakeholders.

          We appreciate your support during this very difficult year.

          /s/ William D. Morton
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          William D. Morton
          Chairman and Chief Executive Officer