CONSOLTEX INC.
                       (formerly Consoltex Group Inc.)











                               UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION

                                 FORM 20-F











                              CONSOLTEX INC.
                        8555, ROUTE TRANSCANADIENNE
                       SAINT-LAURENT, QUEBEC, CANADA
                                  H4S 1Z6





<PAGE>







                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 20-F

[    ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE
        SECURITIES EXCHANGE ACT OF 1934
                              OR
[  X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	 EXCHANGE ACT OF 1934

          For the fiscal year ended December 31, 1999

                             OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

         For the transition period from  to

         Commission file number:

                                CONSOLTEX INC.
              (formerly Groupe Consoltex Inc./Consoltex Group Inc.

            (Exact name of registrant as specified in its charter)

                             New Brunswick, CANADA

                (Jurisdiction of incorporation or organization)

      8555, route Transcanadienne, Saint-Laurent, Quebec, Canada  H4S 1Z6

                   (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the
Act:

                                     NONE

                               (Title of Class)

Securities registered or to be registered pursuant to Section12(g) of the
Act:
                                     NONE

                               (Title of Class)

Securities for which there is a  reporting obligation pursuant to Section
15(d) of the Act:

                11% Series B Senior Subordinated Notes due 2003

                               (Title of Class)

Indicate the number of outstanding  shares  of each of the registrant's
classes of capital or common stock as of the close of  the period covered
by the annual report:

                                       Issued and Outstanding
          TITLE OF CLASS                AS OF THE DATE HEREOF

        Multiple Voting Shares                 3,140,000
        Subordinate Voting Shares             14,887,551

Indicate  by  check  mark  whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the proceeding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

                          Yes    X                 NO


Indicate by check mark which financial statement item the registrant has
elected to follow.

                       Item 17   X               Item 18




<PAGE>



TABLE OF CONTENTS

EXCHANGE RATE DATA................................................

PART I............................................................

ITEM 1. DESCRIPTION OF BUSINESS...................................
        General...................................................
        Development of the Business...............................
        Business Strategy.........................................
        Business Sectors..........................................
             Polypropylene Operations.............................
             Textile Operations...................................
        Product Development.......................................
           Marketing..............................................
        Raw Materials.............................................
        Equipment and Technology..................................
        Capital Expenditures......................................
        Employees.................................................
        Regulatory Environment....................................
        Environmental Regulation..................................

ITEM 2. DESCRIPTION OF PROPERTY...................................

ITEM 3. LEGAL PROCEEDINGS.........................................

ITEM 4. CONTROL OF REGISTRANT.....................................

ITEM 5. NATURE OF TRADING MARKET..................................

ITEM 6.EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY
       HOLDERS....................................................

ITEM 7. TAXATION..................................................
        Canadian Taxation.........................................
        United States Taxation....................................
          Payment of Interest on the Series B Notes...............
          Sale, Exchange or Retirement of the Series B Notes......
          Market Discount.........................................
          Amortizable Bond Premium................................
          Backup Withholding......................................

ITEM 8. SELECTED CONSOLIDATED FINANCIAL INFORMATION...............


<PAGE>



ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS.................................
        Overview..................................................
        Performance by Sector.....................................
        Results of Operation - Comparison of years 1999 and 1998..
            Sales.................................................
            Textile Operations Sales..............................
            Polypropylene Operations Sales........................
       EBITDA.....................................................
          Textile Operations Sales................................
          Polypropylene Operations Sales..........................
      Foreign Exchange Gain or Loss...............................
      Financing Costs.............................................
      Income Taxes................................................
      Comparison of years 1998 and 1997...........................
          Sales...................................................
          Textile Operations Sales................................
          Polypropylene Operations Sales..........................
      EBITDA......................................................
          Textile Operations Sales................................
          Polypropylene Operations Sales..........................
        Foreign Exchange Loss.....................................
        Financing Costs...........................................
        Income Taxes..............................................
        Liquidity and Capital Resources...........................
        Capital Expenditures......................................
        Financing Activities......................................
        Risks and Uncertainties...................................
        North American Textile Industry...........................
        Raw Material Costs........................................
          Interest Rates and Exchange Rates.......................
          Year 2000 Issue.........................................
          Forward Looking Statements..............................

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT.....................

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS...................
        Stock Option Plan.........................................
        Pension Benefits..........................................
        Management Incentive Plans................................
        Directors.................................................


ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR
         SUBSIDIARIES.............................................

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS...........


<PAGE>


PART II

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED...............

PART III..........................................................

ITEM 15. DEFAULTS UPON SENIOR SECURITIES..........................

ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR
         REGISTERED SECURITIES....................................

PART IV...........................................................

ITEM 17. FINANCIAL STATEMENTS.....................................

ITEM 18. FINANCIAL STATEMENTS.....................................

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS........................

SIGNATURES........................................................

CONSOLIDATED FINANCIAL STATEMENTS.................................

AUDITORS' REPORT..................................................


                                     3



<PAGE>


EXCHANGE RATE DATA

 .....Consoltex Inc. publishes its consolidated financial statements in
Canadian dollars.  All amounts are  expressed, unless otherwise specified,
in Canadian dollars.  Commencing with its consolidated financial statements
for the first quarter of 2000, Consoltex Inc. will start publishing its
Consolidated Financial Statements in United States dollars.

 .....The Company's primary currencies include the Canadian dollar, the
United States dollar and the Mexican peso.

 .....The Canadian dollar is convertible into U.S. dollars at freely floating
rates, and there are currently no restrictions on the flow of Canadian
currency between Canada and the United States.  The following table sets forth
certain exchange rate information (expressed in terms of U.S. dollars per
Canadian dollar)for the five years ended December 31, 1999.  Such rates are the
inverse of the Noon Buying Rate in New York City for cable transfers as certified
for customs purposes by the Federal Reserve Bank of New York (the "Noon Buying
Rate").  On June 21, 2000, the inverse of the Noon Buying Rate was
US$0.6789=Cdn$1.00.

<TABLE>
<CAPTION>

<S>                                                       <C>      <C>
</TABLE>
<TABLE>
<CAPTION>
	                               Years ended December 31
                                    -----------------------
<S><C>                      <C>      <C>      <C>      <C>      <C>
                           1995     1996     1997     1998     1999
Exchange rate at
end of period             0.7323    0.7296   0.6997   0.6534  0.6929

Average exchange rate
during period(1)          0.7307    0.7334   0.7233   0.6720   0.6712

Highest exchange rate
during period             0.7462    0.7526   0.7487   0.7067   0.6929

Lowest exchange rate
during period             0.7096    0.7212   0.6945   0.6378   0.6522
</TABLE>

(1)   Average of the exchange rate on the last day of each month during the
      applicable period.


 .....IN THIS REPORT ON FORM 20-F, UNLESS THE CONTEXT OTHERWISE REQUIRES,
THE "CORPORATION" REFERS TO CONSOLTEX INC. AND "CONSOLTEX" OR THE "COMPANY"
REFERS TO CONSOLTEX INC. TOGETHER WITH ITS SUBSIDIARIES AND DIVISIONS AND
THEIR RESPECTIVE PREDECESSORS.

                                     6



<PAGE>

                                  PART I

ITEM 1 -  DESCRIPTION OF BUSINESS


GENERAL

 .....Consoltex is a North American textile and packaging company.  Its
activities are divided between the Polypropylene and Textile Operations
located in the United States, Canada, Mexico and Costa  Rica.  Consoltex is
vertically integrated, from the production of yarn, in its Polypropylene
Operations, through to weaving, dyeing, printing, finishing and coating and
production of end products such as large bulk bags and small bags.  It also
conducts its own research and development and maintains its own sales and
marketing network.  Consoltex has 20 manufacturing plants and employs
approximately 7,100 associates.  Consoltex supplements production from its
20 manufacturing facilities with fabric converted in the United States as
well as raw materials and fabric imported from Asia and Europe.

 .....The Polypropylene Operations includes LINQ Industrial Fabrics, Inc.
("LINQ") in South Carolina, Marino Technologies, Inc. ("Marino") in Florida,
New Jersey, Illinois and Texas, Rafytek, S.A. de C.V. ("Rafytek"), Marino
Technologies de Mexico, S.A. de C.V. ("Marino Mexico") and VeraPak, S.A.
de C.V. ("VeraPak")in Mexico and Rafytica, S.A. ("Rafytica") in Costa Rica.
The Polypropylene Operations a) extrudes polypropylene yarn and  weaves,
finishes, and distributes polypropylene-based fabrics for flexible
intermediate bulk containers ("FIBC"), agrotextiles, woven and non-woven
geotextiles, primary carpet backing and cotton bale and fibre wrap and
b)manufactures end products such as FIBC bags for the chemical, agricultural
and food industries and small bags for sugar, fertilizer, flour, animal feed,
and other uses.

 .....The Textile Operations includes Consoltex Inc. in Canada, The Balson-
Hercules Group, Ltd. ("Balson-Hercules")in the United States and Royalton
Mexicana, S.A. de C.V. ("Royalton") in Mexico.  The Textile Operations
manufactures, converts and imports a diverse range of man-made broad woven
fabrics.  In Canada it manufactures primarily polyester, polyester rayon,
voile and nylon based fabrics in its Fashion, Home  Furnishings, Outerwear
and Industrial divisions. In the United States it operates as an importer
and converter for its Craft Home Sewing, Apparel Linings, Seatex, and John
King divisions of Balson-Hercules Group.  Royalton Mexicana, S.A. de C.V.
("Royalton")in Mexico makes garments primarily for the United States and
Mexican markets.

 .....The registered office of Consoltex Inc. is at 44 Chipman Hill, 10th
Floor, Saint John, New Brunswick, E2L 4S6 and its principal office is at
8555, route Transcanadienne, Saint-Laurent, Quebec, Canada, H4S 1Z6.

 .....The following chart sets forth the name and jurisdiction of
incorporation of the material subsidiaries of the Corporation as of the date
hereof, all of which are wholly owned.

                            [CHART OMITTED]



<PAGE>


DEVELOPMENT OF THE BUSINESS

 .....Consoltex Inc. (formerly Consoltex Group Inc.) was incorporated under
the Canada Business Corporations Act by Certificate of Incorporation dated
September 16, 1992.  By Certificate of Amendment dated December 17,1992,
the existing authorized share capital of the Corporation consisting of an
unlimited number of common shares was modified to (i) create an unlimited
number of Multiple Voting Shares, without par value, an unlimited number of
Subordinate Voting Shares, without par value, an unlimited number of First
Preferred Shares, issuable in series, without par value and an unlimited
number of Second Preferred Shares, issuable in series, without par value,
(ii)convert the 4,000,000 common shares then outstanding into 4,000,000
Multiple Voting Shares on a one-for-one basis and (iii) remove the
authorized class of unissued common shares. Consoltex Inc. was continued
under the Business Corporations Act, New Brunswick on December 16, 1999
and changed its name from Consoltex Group Inc. to Consoltex Inc. on
January 3, 2000.

    In March 1993, the Corporation completed a $55 million  initial public
offering of Subordinate Voting Shares in Canada and in September 1993  the
Corporation and  its  subsidiary, Consoltex (USA) Inc. (collectively, the
"Issuers"), completed an offering in  the  United  States  of  Series A 11%
Senior  Subordinated Notes due in the year 2003 (the "Series A Subordinated
Notes") for  proceeds of US$120 million which were used to acquire LINQ and
to pay off Consoltex's  fixed  rate  and working capital indebtedness.  The
Series A Subordinated Notes are guaranteed  by  the Corporation's principal
subsidiaries.

 .....On May 20, 1994, the Issuers completed an Exchange Offer in respect of
the Series A Subordinated Notes, whereby the Issuers  exchanged  such notes
for Series B 11% Senior Subordinated Notes (the "Series B Subordinated
Notes") which are identical in all material respects to the Series A
Subordinated Notes, except that the Series B Subordinated Notes are
registered under the Securities Act of 1933 (U.S.).

 .....On March 19, 1996, Consoltex refinanced all its senior bank debt  with
a  US$85  million  bank  facility including a US$50 million working capital
revolving line of credit and a US$35  million five year term loan (the
"Senior Bank Facility").  The proceeds of the new facility were used to
repay all indebtedness at March 19, 1996  except the Series B Subordinated
Notes. This refinancing had no effect on the Series B Subordinated Notes.

 .....On  January 13, 1997, the Corporation issued, through a private
placement, 3.4 million Subordinate Voting Shares to Clairvest Group Inc.
("Clairvest") for $6.1 million.  The net proceeds from this share issue
were used to repay a portion of Consoltex's term bank debt.  At the same
time, Les Gantiers Holding B.V., the controlling  shareholder, converted
860,000 Multiple  Voting  Shares on a one-for-one basis into Subordinate
Voting Shares and sold these shares to Clairvest.

 .....On October 20, 1999, (and subsequently by way of the compulsory
acquisition provisions of the CANADA BUSINESS CORPORATIONS ACT) AIP/CGI
NB Acquisition Corp. ("AIP") acquired 100% of the Subordinate Voting Shares
of Consoltex Inc. (the "AIP Acquisition") for $5.60 per share.  As a result,
100% of the Consoltex Inc. Subordinate Voting Shares, previously listed on
the Montreal and Toronto stock exchanges, are now held by AIP. Consoltex Inc.
accordingly ceased to be a reporting issuer with Canadian securities
regulatory authorities.  Consoltex Inc. is still controlled by Les Gantiers
Holding B.V. through its ownership of 100% of Consoltex Inc.'s Multiple
Voting Shares. For more information on share ownership, refer to "Item 4-
Control of Registrant" of this Form 20-F.


<PAGE>


 .....On  January  1,  2000,  the  former  subsidiary  of  the  Corporation,
Consoltex Inc. (as it was then known) was wound up into the Corporation in
that the Corporation acquired all of the assets and assumed all of the
liabilities of the former Consoltex Inc.  The former Consoltex Inc. is to
be dissolved.

 .....Consoltex's  sales grew from $446.9 million for the year ended December
31, 1995 to  $510.3 million for the year ended December 31, 1999. This
growth was principally the result of the acquisitions (the "Acquisitions")
of certain assets of N. Erlanger Blumgart & Co., Inc. ("Erlanger Blumgart")
on May 1, 1996, Royalton on February 26, 1999, Marino on July 1, 1999 and
the assets of Atlas Bag on October 1, 1999.  The Marino and Royalton
acquisitions were by way of share purchase and the Atlas acquisition was the
acquisition of the operating assets of Atlas Bag, Inc. by Marino, to become
a division of Marino.  The Company financed these acquisitions through
additional term loans totalling US$43 million from its Senior Bank facility.

 .....Earnings from operations increased slightly from $31.5 million for the
year ended December 31, 1995 to $32.2 million in for the year-ended December
31, 1999.  From 1998 to 1999, earnings from operations decreased from $39.2
million to $32.2 million.  The Company reported a loss of $5.1 million in 1999
compared to a profit of $5.5 million in 1998.

 .....The decrease in the Company's 1999 earnings is principally caused by
a) $4.4 million in shareholder value enhancing costs incurred as part of
the process which resulted in the Company going private in 1999, b)  2.5%
decrease in sales (excluding the effect of the Royalton, Marino and Atlas
acquisitions) resulting from increased import competition on certain apparel
product lines, c) the negative impact of intense price competition in the
Polypropylene Operations, and d) the increase in both depreciation expense
on capital expenditures, and amortization charges relating to additional
goodwill and deferred financing expenses.

BUSINESS STRATEGY

 .....Consoltex believes there are significant opportunities to expand its
market share and develop new businesses in the North American textile
industry. Consoltex's business strategy is three-fold: to emphasize high
quality differentiated and specialty man-made fabrics; to increase
penetration of fabric and fabric packaging in the United States; and to
continue growth through globalization.

 .....EMPHASIZING HIGH QUALITY DIFFERENTIATED AND SPECIALTY MAN-MADE FABRICS.
Consoltex focuses its manufacturing, marketing and research and development
on high quality differentiated and specialty man-made fabrics which typically
have higher profit margins than commodity products.  As a result of its
state-of-the-art technology, flexible manufacturing processes and experience
in developing specialized products, Consoltex's product lines are well-
positioned to capitalize on future growth in new and existing markets for
man-made fabrics.  These fabrics are less susceptible to import competition
due to the significant level of customer interaction required to develop
fabrics of this type.  In addition, these fabrics tend to be ordered in small
quantities and are well suited to the Company's short run capabilities.

 .....Technological advances have resulted in man-made fibers outperforming
competing fabric types.  This has resulted in the opening of many new markets
in  environmental,  military, safety, medical, construction, packaging,
transportation, industrial and technically driven end-use markets.


<PAGE>

 .....Through research and development and through licensing and other
agreements, Consoltex is manufacturing and supplying unique proprietary-
type fabrics for specialized industrial and domestic uses and seeks to
continue to expand in this area.

 .....INCREASED PENETRATION OF FABRIC AND FABRIC PACKAGING IN THE UNITED
STATES. Consoltex is actively  pursuing increased penetration of the
substantially larger U.S. market from its  subsidiaries  in both Canada and
Mexico.  This  strategy  capitalizes  on Consoltex's vertical integration,
strong converting network, growing Mexican manufacturing capacity and
improving international sourcing contacts which provides Consoltex with
cost and service advantages in the U.S. market.

<PAGE>

 .....This  business strategy has been enhanced by the Free Trade
Agreement  ("FTA") and  North  American Free Trade Agreement ("NAFTA")
which came into effect in 1989 and 1994, respectively. The FTA provided
for a decreased level of import  tariffs  for  Canadian exports to the
United  States. Consequently, the FTA permitted Consoltex to compete
against U.S. manufacturers and converters on a more equitable basis while
providing a major  advantage for Consoltex over exporters from most
other countries to the U.S. market.  The FTA  was  expanded  by NAFTA which
enlarged the trading zone to include Mexico.  As a result of the  FTA's
staged duty reductions, which continued  under  NAFTA, Consoltex's Canadian
exports to the United States were duty free effective  January 1, 1998, for
NAFTA origin goods, while imports into the United States  from  most other
countries were assessed a 16.2% duty in 1999.  Duty on Mexican polypropylene
fabric exports to the United States,  which were subject to a 2.6% duty rate
in 1998 ceased to exist on January 1, 1999.

 .....Consoltex also obtains some benefits from the comprehensive U.S. quota
system which establishes quotas on the import  of various fabrics from many
low cost countries into the United States, thereby  limiting access of many
other  countries to certain of Consoltex's target markets.  These  benefits
will,  however, diminish as a result  of   the  January   1,  1995  Agreement
on  Textiles  and  Clothing (the "Transition Agreement")concluded  during
the  Uruguay  Round  of the General  Agreement on Tariffs and Trade ("GATT").
The agreement provides that, at the end of the ten-year transition period
created for the integration of textiles and clothing into GATT rules,
the United  States  (and  any  other GATT member countries presently  having
quotas)  shall  no  longer have such  quotas  in  place. However,   as
indicated  under  "Regulatory   Environment  -  Transition Agreement"
of  this  Form  20-F, Consoltex believes that it will be able to withstand
any increase in competition caused by regulatory changes.

 .....CONTINUED GROWTH THROUGH GLOBALIZATION. Consoltex no longer
operates purely in a North American marketplace, but rather a global
marketplace,  and  Consoltex  is adjusting its strategy in acknowledgement
of this reality.  This concept of a global marketplace presents some threats
to the Canadian and U.S. textile industry,  but  it  also  affords
opportunities  for growth.   The  increase in  globalization means that
textile companies are facing new competitors on a daily  basis.  Today,
most  countries produce textiles  and apparel for a world market that has
grown moderately  in the last 20 years.   The  low  cost  of skilled and
semi-skilled labour in many countries is causing these countries  to  become
major forces in the global economy. These foreign textile companies have
the  ability  to produce low cost,  quality  commodity  textiles  and
garments,  but do not necessarily understand or have easy access to
the U.S. market.  Consoltex, on the other hand,  has  developed  a
strong  sales, marketing and distribution  system throughout the NAFTA
marketplace.


<PAGE>


 .....There are several ways for Consoltex  to  enhance its global presence.
These   include   licensing,  franchising,  direct  imports   or   exports,
contractual arrangements,  joint  ventures,  investments  and  sourcing and
selling fabrics in countries with low cost labour. Consoltex  seeks such
global  opportunities  that  would  provide it with the  ability to use its
strengths, being modern production  facilities, technological  expertise,
strong  management and  a strong sales, marketing    and   distribution
network   in   North  America. The "globalization"  of  Consoltex  is
taking  place as Consoltex's activities include both expanding sales offshore
and searching  offshore  for purchase of raw materials, such as polypropylene
resin, fabrics, and FIBC  bags  and nylon,  polyester  and  other  synthetic
yarns  and  semi-finished  greige fabrics.  Activities  also include
importing finished fabric to supplement Consoltex's production capacity as
a service to Consoltex's North American customers.  Consoltex is also
sourcing  and  shipping  fabric  off shore to destinations where garments
and other end products are being assembled  for shipment to the United
States.



<PAGE>


BUSINESS SECTORS

 .....The following chart sets forth the structure of Consoltex:


                              [CHART OMITTED]



 .....Consoltex has two operations, namely, the Polypropylene Operations and
the  Textile  Operations.   Each  of  these  two operations functions as an
independent business unit responsible for its  own  strategy,  research and
development,  production,  marketing  and sales.  The following table  sets
forth  each  operation,  together  with  its  major  product  lines,  major
customers, end uses and sales for the years  ended  December  31,  1999 and
1998.


<PAGE>



<TABLE>
<CAPTION>
                                               Sales for     Sales for
                                               year ended    year ended
                                               Dec. 31,      Dec. 31,
                                                1999         1998
                                              ----------    ----------
<S> <C>          <C>            <C>             <C>          <C>
</TABLE>
<TABLE>
<CAPTION>

Major
Product         Major           End          Amount         Amount
Lines           Customers	  Uses         $million/     $million/
                                             percentage    percentage
<S>             <C>             <C>           <C>               <C>

Polypropylene
Operations
=============
Woven           FIBC            Containers     $193.2/37.9%   $166.6/34.6%
fabrics         manufacturers,  for dry
for             construction    flowable
FIBC            suppliers,      goods,
bags,           carpet          construction
geotextiles,    manufacturers,  supplies,
agrotextiles,   nurseries,      carpets,
cotton          cotton          landscaping,
bale            growers,        cotton bale
wrap,           chemical,       and fiber
primary         and             wrap, mesh
carpet          agricultural    bags for
backing,        companies,      fruits and
non-            sugar           vegetables,
woven           and flour       bulk bags
fabrics         producers       and small
for	          and		  bags for
geotextiles,    fertilizer      chemicals,
FIBC	          manufacturers   bulk
bags,		                    foodstuff,
small		       	        agricultural
bags,                           and fertilizer
valve	 			        products
bags
and
fiber
boxes

Textile
Operations
==========

Polyester      Apparel         Men's and       317.1/62.1%     314.7/65.4%
and            manufacturers   ladies
polyester      and designers,  slacks,
blend          home            suits,
fabricss,      furnishings     skirts,
high           manufacturers,  coordinates,
twist          retailers       suites
polyester,     Fabric          and dresses;
microfiber     wholesalers,    children's
nylon          industrial      sportswear;
and            and sport       curtains,
polyester,     manufacturers   draps,
jacquard,      and             bedspreads
wide width     retailers,      and
polyester      home sewing,    home
voile,         crafts and      accessories
nylon and      quilt           Winter
acetate        industries      outerwear,
fabrics                        skiwear,
and                            outer
blends,                        jackets,
acetate,                       rainwear,
cotton and                     men's
polyester,                     and
craft                          women's
home                           suit
sewing                         linings,
printed                        printed
fabrics                        fabrics,
                               non-
                               apparel
                               and
                               industrial
                               nylon and
                               polyester
                               specialized
                               fabrics,
                               fabrics for
                               sports,
                               military,
                               medical,
                               industrial
                               and
                               recreational
                               products
								  -------------  -------------
TOTAL								  $510.3/100.0% $481.3 100.0%
                                                  ============================

</TABLE>



 .....POLYPROPYLENE OPERATIONS

 .....The  Polypropylene  Operations is comprised of LINQ in South Carolina,
Marino in Florida, New Jersey,  Illinois  and  Texas,  Rafytek, Marino
Mexico  and  VeraPak  in  Mexico  and  Rafytica  in Costa Rica.

  .PRODUCT RANGE.   The  Polypropylene  Operations designs, manufactures,
distributes and sells polypropylene-based woven  and  non-woven  industrial
textiles  for  specialty  and  commodity  applications.   The Polypropylene
Operations specialty industrial textiles consist  of  FIBC fabrics and bulk
bags, agrotextiles and geotextiles.  The Polypropylene  Operations  has a
leading market share in each of its three specialty textile segments.   Its
commodity industrial textiles include primary carpet backing; cotton bale
and fibre wrap; small bags for sugar, fertilizer, flour, animal feed and mesh
bags for fruits and vegetables.

 .....FIBC  fabric  is used in the production  of large, flexible, woven
polypropylene bags. FIBC bags are used to transport  virtually  any dry
flowable product.  FIBC bags offer  significant  cost  savings  and  enhanced
performance  compared  to alternative products because of their size  and
ease  of  use.   FIBC bags significantly  decrease  material handling costs
for users as (i) one  FIBC bag holds approximately the  same  amount of
material as 4.5 steel or fiber drums;  (ii)  FIBC  bags  eliminate the  need
for  pallets,  strapping or stretchwrap; and (iii) a single  large  FIBC  bag
can  be  used instead of numerous  smaller  bags.   FIBC  bags  provide
superior moisture and dust infiltration reduction compared to alternative
products.  FIBC bags can be recycled, reused and easily reshipped once the
contents of  the bag have been emptied.

 .....Geotextile  products  are  woven  and  non-woven  fabrics  used in the
construction industry to a) stabilize and prolong surface life of roads and
sidewalks,   b)   enhance   drainage   protection   to   maintain  flow  of
drains, and  septic  systems,  c) contain and control  soil  during
excavations,  d)  provide strength for soil  reinforcement,  e)  assist  in
exposure control, and f) help contain environment waste in landfills.

 .....Agrotextile  products   are  woven  fabrics  used  for  ground  cover,
winterization, and landscaping.  Agrotextiles are primarily used to prevent
weed growth and allow water penetration.   Needle-punched landscape fabrics
are  designed  to prevent the penetration of sunlight  while  allowing  the
absorption of water into the underlying soil.

 .....Primary carpet  backing  is  a  woven fabric used in the production of
household and industrial tufted carpeting.  The carpet fiber is tufted into
a layer of this primary carpet backing.

 .....Cotton bale wrap is a woven ultraviolet-stabilized fabric used to wrap
cotton  bales  and  synthetic  fibers.   Since   the   early  1980s,  woven
polypropylene bale wrap has replaced jute as the primary means for wrapping
cotton.  Polypropylene provides superior protection from moisture, dirt and
other contaminants, thereby improving the quality of the  cotton to the end
user.

 .....The Polypropylene Operations' Mexican operations produce woven
polypropylene  bags  (also  referred  to  as  small  bags)  for the  sugar,
fertilizer, flour, chemical and agricultural industries.  Products  include
25 to 50 kilogram sacks for packaging sugar, fertilizer and flour and  open
mesh  sacks used for agricultural produce.  Other product lines ("Specialty
Products")  include postal service bags, open mesh sacks, fiber boxes (cube
shaped bags for packing fiber), valve bags, FIBC bags and FIBC fabric.


<PAGE>

 .....CUSTOMER  BASE. The Polypropylene Operations' fabric customers are
comprised of  both  fabricators and distributors who resell the Polypropylene
Operations' products  to end-users such as producers and manufacturers of
agricultural and industrial products.  The Polypropylene Operations  sells
FIBC fabric to more than 15 bag manufacturers in the United States and Mexico
who cut and sew the fabric into  FIBC  bags.  The  Polypropylene Operations
also makes and sells its own FIBC  bags  for  sale  to chemical,agricultural
and industrial companies. The Polypropylene Operations provides geotextiles
to construction supply companies and contractors through  an  extensive and
well-developed distributor network.  Agrotextile fabric is sold to
distributors in  rolls. The fabric is then cut into smaller quantities for
sale to nurseries, do-it-yourself  retailers and landscaping stores. Customers
for commodity products are large carpet manufacturers,  suppliers  to cotton
gins as well as, agricultural, sugar, fertilizer, flour and chemical producers.
The Polypropylene Operations has over 1,000 customers located in the United
States, Mexico, Central and South America.  The Polypropylene Operations's
largest customer accounted for 4% of the total  sales  in  the Operations
during 1999 while the top five customers accounted for approximately 15% of
the Operations's total sales.

 .....COMPETITION.  In the U.S. market, as a manufacturer  of polypropylene-
based woven and non-woven industrial textile products, LINQ  is  one of the
top  three  or  four  manufacturers  in  terms of sales in four of its five
product lines.  In its FIBC fabric, cotton  bale  wrap  and  primary carpet
backing  lines, LINQ competes primarily with Amoco Fabrics and  Fibers  Co.
("Amoco").  In FIBC fabrics, LINQ has the leading market share.  In cotton
bale wrap, LINQ  is one of only two major suppliers of polypropylene fabric
in this market.  In  geotextiles,  LINQ  is  one  of  the  four significant
producers.   In  agrotextiles,  LINQ  is  within  the  top  three  of  five
significant  producers  but is a market leader in woven landscaping fabric.
In primary carpet backing, LINQ's market share is now approximately 1% in a
market  dominated  by three  significant  producers.   In  FIBC  bags,  the
combined operations of Marino and Rafytek give the Polypropylene Operations
the leading market share in the fabrics market.  Certain of the Polypropylene
Operations' U.S. competitors, including Amoco and Synthetic Industries, are
significantly larger and have substantially greater resources.  The pricing
policies of the Polypropylene Operations' competitors have at certain times
in the past limited the Polypropylene Operations' ability  to increase its
prices or have caused it to lower the prices of certain of its products.

 .....In the Mexican market for small bags, Rafytek has  over  a dozen local
competitors.   Rafytek  is the largest manufacturer and supplier  of  small
bags in Mexico.

 .....In the area of Specialty  Products  in  Mexico, Rafytek has four other
major competitors but it is usually able to differentiate  itself  from its
competition through its technical, service and marketing capabilities.

 .....TEXTILE OPERATIONS

 .....The  Textile  Operations  is  comprised  of  Consoltex Inc. in
Canada  including  its Fashion, Home Furnishings, Outerwear and  Industrial
Divisions, Balson-Hercules  in  the  United States including its John King,
Seatex, Apparel Linings and Craft Home  Sewing  Divisions  and  Royalton in
Mexico.

 .....PRODUCT  RANGE.  The Textile Operations specializes in the design  and
manufacture of a diverse range of high quality, specialty fabrics made with
nylon and nylon  blends,  polyester  and  blends of polyester and rayon.  A
variety of products are developed by using  specialized  yarns  to  produce
unusual  two  and three color yarn dye effects and utilizing looms equipped
with dobby attachments  to  create  intricate  patterns.   With  the recent
addition  of  narrow  and wide-width jacquard looms, the Textile Operations
can produce intricate jacquard designed fabrics.


 .....The Textile Operations also converts and imports a wide range of basic
nylon and specialized fabrics  for  cold  and wet-weather apparel, athletic
wear, sports and recreation uses, medical uses,  military  uses  and
various  industrial  applications.   It  also  operates  as  a converter of
apparel  lining  fabrics  such  as acetate and Bemberg rayon for men's  and
women's wear, and sells printed acetate,  polyester  and  cotton fabrics to
the  home  sewing  market.  A converter is a purchaser of unfinished  goods
from a weaving mill  who  subcontracts  the  dyeing, printing and finishing
required  for  such goods to a commission dyer and  printer.   The  Textile
Operations also  operates as an importer of finished and unfinished fabrics
into the United States  from  Asia  and  as a distributor of fabrics within
Asia and Europe to low cost labour countries where fabrics are cut and sewn
into  garments and exported to the United States.   Royalton  manufactures
brand name outerwear garments in Mexico for sale in Mexico and private label
garments for distribution to the  Textile Operations' existing  customer
base in the United States.


 .....For  the home furnishings market, the Textile Operations pioneered the
production  of wide-width voile in North America using polyester high twist
yarns and produces  various  weights  and constructions of polyester, sheer
and  poly-rayon  blends  with a variety of  finishing  techniques  such  as
"burnout" and "crushing".  Wide-width voile is a curtaining fabric used for
large windows.  It enables  the  fabric to be used sideways, avoiding seams
in curtains.

 .....CUSTOMER BASE.  Textile Operations' customer base consists primarily
of U.S. and Canadian skiwear, rainwear, golf bag, recreational and fashion
apparel manufacturers, with major end-uses being outerwear, skiwear,
industrial, military  uniforms, women's, men's and children's-wear
manufacturers of sportswear, coordinates,  pants,  suits  and dresses.  The
Textile  Operations  also  sells  to the home furnishings market  where  it
supplies U.S. and Canadian wholesale  distributors  and  manufacturers  who
supply  or  make  draperies,  tablecloths,  curtains,  bedspreads  and home
accessories.  The Apparel lining business sells its products principally to
the  major  men's  clothing  manufacturers in the United States as well  as
large retailers for the cut and  sew market.  The Textile Operations serves
a wide customer base with over 1,500 customers in Canada and over  4,000
customers in the United  States. The  Textile Operations' largest customer
accounted for 3.1% of the Textile Operations' total  1999  sales while the
top five customers accounted for approximately 13.4% of the Textile
Operations' total sales.

 .....COMPETITION.  The Textile Operations' competition in nylon and
technical fabrics and polyester-based apparel-fabric markets is fragmented.
U.S. converters, large  U.S. mills and imported fabric manufactures are the
Company's primary competitors.   Imported  garments also compete indirectly
with certain of the divisions as they displace  consumption of the products
of  Consoltex's  North  American  customers  thereby  reducing  demand  for
Consoltex's  fabrics.   The  competition  in high quality wide-width  voile
fabrics is mainly from European producers while  competition for other home
furnishings  fabrics  and accessories are from a wide  range  of  Canadian,
Mexican and U.S. manufacturers.


PRODUCT DEVELOPMENT

 .....Textile manufacturers  generally  engage in product development rather
than basic research.  The Textile Operations' product development is carried
out on a divisional basis with specialists  who focus their efforts on
process and product development to meet the specific needs of customers.
Product development involves ongoing plant trials, product  testing, sample
preparations,  reviews and fine-tuning with customers, suppliers  and  end-
users.

 .....Textile  Operations'  emphasis  on  new  product  development  extends
throughout  its   manufacturing   operations  where  special  equipment  is
dedicated  to making sample runs and  product  trials  are  given  priority
status on weaving and finishing equipment.

 .....In the Fashion and Home Furnishings divisions, in approximately 90% of
cases, the Company  develops fabric patterns and finishes with the customer
selecting colours.  The  plants  have  their own product development center
for the development and testing of new fabrics, dyes and finishes.  Product
development  works  closely  with  the merchandising  department  which  is
responsible for researching fashion trends and developing new product lines
each season based on expectations of  consumer  preferences.   Pattern  and
finish  combinations  are  analyzed  by the product development group which
determines whether the plants have the capability to manufacture the fabric
and at what cost.  These determinations,  combined  with an estimate of the
size of the market and expected selling price, enable  management to decide
if  the  product  is  worth  producing.   In  the Outerwear and  Industrial
divisions,  new  products include improved waterproof  breathable  fabrics,
wicking fabrics, mechanical  and  LYCRA{<reg-trade-mark>}  stretch fabrics,
fire  retardant  apparel fabrics, medical fabrics and anti-static  fabrics.
For example, the Company  has  developed  a static-proof camouflage netting
for the military to protect radar installations.

 .....New fabrics sold by Consoltex's U.S. converting business are developed
by Consoltex's in-house stylists and through collaboration with third-party
weaving mills and finishing plants.  Having  the  ability  to  choose among
third-party  mills  or  finishing  plants  to develop a new fabric for  its
customer provides Consoltex with a unique competitive advantage.  Consoltex
also works actively with third-party Asian companies to develop new fabrics
for the U.S. sports, outdoor and recreational markets.

 .....The Polypropylene Operations continues  to  develop new products based
on market needs. LINQ's recent innovations include  reinforced circular and
anti-static fabrics for the FIBC market, needle-punch  non-woven geotextile
fabrics, agrotextile fabrics with lower light transmissivity  (resulting in
reduced  weed  germination)  and fabric for recreational vehicles.   LINQ's
current product development projects  include  new FIBC products, non-woven
fabrics and lightweight cotton bale wrap fabrics.   LINQ  strives  to  be a
technical  leader  in  product  development  and has successfully developed
products such as CROHMIQ{<reg-trade-mark>}-Blue.

 .....Electrostatic hazards range from simple nuisance shocks to major fires
and  catastrophic  explosions.   With  CROHMIQ{<reg-trade-mark>}-Blue,  the
practical   application   of  FIBC  bags   in   hazardous
environments is now possible.   CROHMIQ{<reg-trade-mark>}-Blue is a second-
generation product that evolved from  the  success  of  Baxon  Blue  fabric
(originally  introduced  by  Exxon  Chemical Company).
CROHMIQ{<reg-trade-mark>}-Blue  contains  a  new  anti-static fiber jointly
developed by LINQ and E.I. Dupont de Nemours and Company.

 .....LINQ  has  a  small  full-time  in-house  staff dedicated  to  product
development.   This  staff  is  supplemented  by  third-party   specialists
contracted in areas where LINQ wishes to develop new products.

 .....Marino and Atlas product development focus is on manufacturing  better
FIBC   bags   and   developing   new   applications  for  such  bags.   New
applications for our Marino and  Atlas FIBC bags include bags
for transportation of liquids, trees, pipe  sacks,  and  slings  for
unloading freight from freighters.

 .....Rafytek  focuses  its  product  development  on  finding  new uses for
existing  products,  determining  customers'  needs  for  new products  and
developing  new  products  to  replace  traditional  packaging methods  and
materials.   Specifically, Rafytek has added printed designs  on  packaging
and liners that  increase  the  efficiency  and  aesthetics  of products to
accommodate  their  customers'  needs  and has developed new packaging  for
transportation of potatoes.

 .....Consoltex's research and development expenditures totaled $3.7 million
in 1999, $3.5 million in 1998 and $2.5 million in 1997.


MARKETING

 .....The Textile Operations markets its  products in Canada through its own
salesforce, operating from branch offices  in  Montreal,  Toronto, Winnipeg
and Vancouver.  U.S. sales are handled by a combination of  Consoltex sales
representatives and independent selling agents located in New  York,
California, Georgia and Utah.  Latin  American  sales  are handled through
independent selling  agents located  in  Mexico, Brazil and Chile. European
sales are handled through agents in the United Kingdom. Consoltex's sales
associates  sell  only Consoltex products and are trained in technical areas
specific to their products.  Independent agents offer Consoltex's products
alongside those of other non-competing companies and provide the Company with
representation over a wide geographic area.

 .....The Polypropylene Operations  has  a dedicated sales force for each  of
its  product lines.  The end users for each  product  operate in distinct
industries and require a high level of customer service.  The Polypropylene
Operations also markets its products through a direct sales force and through
a  network  of independent third party representatives in the United States
and Mexico.  Marino markets and sells its FIBC bags through Smurfit Stone
Container Corporation.  Rafytek markets its product through a direct sales
force with sales  offices  located  in  Mexico  City  and several key local
markets  throughout Mexico.  Export sales from Mexico are  handled  by  the
sales office in Mexico City and in conjunction with LINQ in South Carolina.


RAW MATERIALS

 .....Yarn is the main raw material sourced by the Textile Operations and is
important  in  the production of cost-competitive and quality products.  To
achieve the variety and quality required for its specialized product lines,
the Textile Operations  source yarns from major producers in North America,
Asia and Europe. The major  yarn  types  used by the Textile Operations are
nylon, polyester, acetate and a variety of  fancy rayon, cotton and acrylic
blended yarns.

 .....The Textile Operations has shifted a  major  part  of its yarn sourcing
from Asia and Europe to North American suppliers to satisfy the NAFTA rules
of origin criteria which require the use of North American yarns for Canadian
produced fabric exports to qualify for tariff and quota free access to the
U.S. market. This has resulted in U.S. yarn sourcing increasing from 29% of
Consoltex Inc.'s total yarn purchases in 1990 to 53% in 1999. Canadian
sources represented 22% of Consoltex Inc.'s yarn supplies in 1999 while
European and Asian producers accounted for the remaining 25%.

 .....Other raw materials used  by the  Textile  Operations  include greige
fabrics, dyes and chemicals. Consoltex Inc.  purchases  significant
quantities of chemicals and  dyestuffs  for its manufacturing processes and
is supplied by major producers.

 .....Polypropylene resin, an inert plastic  derived  from petroleum, is the
basic raw material used in the manufacture of polypropylene products and is
supplied by petrochemical companies.  Polypropylene resin  is  obtained  in
pellet form and it is extruded into various types of yarns that are used to
manufacture  woven  fabrics.   Polypropylene  resin  purchases  account for
approximately  30% of the Polypropylene Operations' cost of sales for 1999.
The price of polypropylene resin fluctuates based on North American and
international  supply  and  demand for this product. There was a substantial
increase in polypropylene resin prices which started in 1994 and peaked in
August 1995 and subsequently settled at a relatively lower price in early
1996.  The price then rose again from early 1996 peaking in August 1996 and
has come down gradually from that date to July 1999.  Since then it has risen
significantly,  due in part to the rapidly increasing  price of  oil.  Based
on the significant announced polypropylene resin capacity expansions over the
next few years and the expectation of gradually decreasing oil prices,
management  does not currently expect prices of resin to rise significantly
over the next year.


EQUIPMENT AND TECHNOLOGY

 .....The Textile  Operations'  strategic  focus  is  on  being  a short-run
manufacturer  of  high margin, specialty fabrics.  The majority of  fabrics
sold are manufactured  when  the order is received.  Textile Operations has
invested in modern equipment and  has  an  experienced,  flexible workforce
which permits it to manufacture a variety of fabrics through the innovative
use of many different yarns and the development of new weave patterns while
minimizing   product  change-over  down-time.  The  Company  has   acquired
technologically advanced and versatile high-speed air jet weaving equipment
controlled by computerized dobby systems with quick change capabilities and
state-of-the-art  high-speed  jacquard  looms.   Further fabric variety and
special  effects  are  achieved  through advanced cross-dyeing  techniques,
specialized  finishing  and  coating   applications,  customized  prints
and, crushing and burn-out techniques.   Significant  investments  have
also  been  made  in  technologically  advanced  batch dyeing machines with
microprocessor  controls.   These investments have substantially  increased
the number of product lines Consoltex  is  able to offer and have permitted
the   introduction  of  many  new  fashion,  home  furnishings   and
technically   difficult   industrial   fabric   blends,  while  maintaining
manufacturing efficiencies, quality and cost-competitiveness  and improving
customer response time.

 .....The Textile Operations' primary manufacturing facilities are located in
Canada. Consoltex's manufacturing processes include air texturizing, twisting,
beaming, weaving, dyeing, finishing and coating plants, and two cut and sew
garment manufacturing plants in Mexico which were part of the Royalton
acquisition in February 1999.  Its manufacturing processes are specialized
to meet the production needs of each division, however, flexibility and
versatility are the prime requirements in equipment purchases.  This enables
the Textile Operations to provide quick turnaround for short runs, repeat
orders and specialized niche products.  It has also enabled the Company to
use equipment from one division to service another division's  customers
depending on margins, available capacity and timing.

 .....The Textile  Operations'  weaving  facilities  include  a  variety  of
machinery  types.   The  Company's looms include air jet, water jet, rapier
and jacquard. The majority  of  its weaving output comes from modern, high-
speed, shuttleless looms.  The Textile Operations produces both regular and
wide-width fabrics ranging from 60  to 90 inches for apparel fabric markets
and 120 inches and 135 inches for certain  wide-width  applications such as
curtaining  fabrics.  Many  of  its  looms  are  equipped  with  electronic
attachments which allow a wide range of specialized patterns  to  be  woven
into  the  fabric. In addition, each weaving facility has computerized loom
monitoring systems  which  provide  real  time  information  and facilitate
production planning.

 .....The Textile Operations' dyeing technologies include jet, beam, jig and
pad  dyeing  processes,  and  specialized  wide-width  dyeing and finishing
equipment.   The  dyeing  operations  are  computer-controlled   and   have
computerized shade  matching systems which permit colour consistency within
very stringent standards.   Lot  sizes  range  from  500  metres  to 10,000
metres, providing important flexibility and enhancing Consoltex's servicing
capabilities.   Dyeing   and  finishing  operations  are  also  specialized
according to divisional product/market  characteristics but are centered on
batch processing technologies.

 .....The  Textile  Operations'  finishing  operations  employ  a  range  of
specialized equipment to achieve specific fabric  effects  and  appearances
such   as  brushed,  sueded,  sanded,  crinkled  and  burnout  looks.  This
specialized   equipment   also  enables  it  to  perform  advanced  coating
operations which achieve very sophisticated performance capabilities in its
products,  including fire-retardant,  waterproof,  shock  resistant,  radar
impenetrable or breathable characteristics.

 .....The  Polypropylene   Operations'  manufacturing  capabilities  include
extrusion, beaming, weaving,  needle-punching  and  finishing  and,  in its
converting  operations,  also  include  cutting,  stitching and printing of
small   bags,   valve  bags  and  FIBC  bags.   All   U.S.   fabric
manufacturing is  performed  by  LINQ  and  is  done  in Summerville, South
Carolina within a single facility.  Two Mexican facilities  in Rafytek also
produce fabric.  The remaining 10 facilities manufacture  small
bags, valve bags, mail bags and FIBC bags.

 .....The   Polypropylene   Operations  is  vertically  integrated  and  its
operations  are  extremely  flexible,   as   there  is  a  high  degree  of
interchangeability among its equipment.  Equipment  used  to  manufacture a
particular product line can be readily shifted into the manufacture of most
of its other product lines. LINQ's finishing operations include  rewinding,
slitting, extrusion, coating, tentering (heat setting), and  needle-
punching.   LINQ's  various finishing operations enable it to convert goods
into customer-specific  products.   Each  of  the Polypropylene Operations'
extruders is capable of manufacturing yarns for  most of its product lines,
allowing  for flexible production and efficient yarn  inventory  balancing.
LINQ's flat looms are capable of achieving full-width production ranging up
to 210 inches.   It also has a number of large circular looms which produce
tubular fabric for  the manufacture of FIBC bags.  It is transferring these
large circular looms  to  Rafytek in 2000 as these looms are generally more
labour intensive to operate  and  can  generate  better  returns  by  using
Polypropylene Operations' Mexican labour force.  In 1998, LINQ also added a
new  needle-punch  non-woven  manufacturing  line for use in the geotextile
market.

 .....The Polypropylene Operations' manufacturing in Mexico is performed by
Rafytek, VeraPak and Marino Mexico and in Costa Rica by Rafytica. Rafytek's
manufacturing operations, which include VeraPak, are vertically integrated
from the production of yarn through extrusion, beaming, weaving, rewinding,
slitting, extrusion coating and cutting, sewing and printing of fabrics into
small bags and FIBC bags. Rafytek's weaving facilities include 130 to 159
inch width flat looms and a few large and many small circular weaving looms.
Marino has one Mexican plant  and  four U.S. plants specializing in cutting,
sewing, printing and  refurbishing  of  FIBC bags.  Rafytica is a small
operation which sources its fabrics from Rafytek then performs the cutting,
sewing and printing of small and FIBC bags for sale in Costa Rica.


CAPITAL EXPENDITURES

 .....Most textile mills are on a continuum of  machinery replacement and it
is  typical  for  textile  mills to replace their equipment  as  its  cost-
effectiveness  diminishes.   As   such,   Consoltex's  capital  expenditure
policies  have  resulted  in a gradual replacement  of  equipment  and  are
focused   on   improving   market-responsiveness   and   increasing   cost-
competitiveness. Consoltex's  recent  investments in its Textile Operations
were principally oriented towards technologically  advanced  equipment  for
both its weaving and finishing operations and specialized equipment for new
products.   These  investments  in  advanced  manufacturing  equipment  and
processes  have  supported  Consoltex's  market-driven  business  strategy.
Recent  expenditures  in the Polypropylene Operations were directed towards
adding capacity as well  as introducing new production capabilities such as
the manufacturing of needle-punched non-woven geotextiles.

 .....In the three years ended  December  31,  1999,  Consoltex has invested
$57.3 million in the purchase of fixed assets.

 .....In 1999, Textile Operations invested $6.4 million in the purchase of
fixed assets for its Canadian plants to expand curtaining fabrics production
capacity and upgrade the inspection process. Overall, these investments
enhance the Textile Operations' capacity to service the North American
textile market. In 1999, the  Polypropylene Operations invested $9.4 million
to expand manufacturing capabilities for non-woven geotextiles,  increase
extrusion capacity and upgrade its management information and production
system technology.

 .....Consoltex's future investment  plan  is  to  continue to build on its
market-responsive  capabilities,  while  lowering  unit  production  costs.
Consoltex believes that capital expenditures over the  next  few years will
generate improvements in gross margins, enable it to enter new  markets and
enhance its production capacity.


EMPLOYEES

 ....As of December 31, 1999, Consoltex employed 6,647 associates; 982 in
Canada, 1,151 in the United States 4,474 in Mexico and 40 in Costa Rica.

   In Canada, 702 associates were  represented   by  five  collective
bargaining agreements, one expired in 1999 covering 45 associates, two expire
in 2000 covering 161 associates, one expires in 2002 covering 128 associates
and one expires in 2003 covering 368 associates. In the United States, 180
Florida associates are covered by a collective bargaining agreement which
expires on July 31, 2000 and one New York associate is covered by a
collective bargaining agreement. In Mexico, 4,361 associates are represented
by seven collective bargaining agreements which all expire in January 2002
with annual salary revisions conducted each January.

   Consoltex has developed good relations with its associates, unions and
union  representatives.  Consoltex  is  not  aware  of  any difficulties in
renewing any of the collective bargaining agreements it is a party to.

REGULATORY ENVIRONMENT

 .....The North American textile and apparel industries have  relied  on the
General  Agreement on Tariffs and Trade ("GATT"), to set the framework  for
trading  tariffs   between  countries.   Prior  to  1995,  the  Multi-Fiber
Arrangement ("MFA"),  within the framework of the GATT, resulted in a large
number of bilateral agreements between developed countries, such as Canada,
the United States and less  developed  countries,  which  set  quantitative
limits (quotas) on imports from less developed countries. In 1989,  the FTA
was  implemented  between  Canada  and  the United States, resulting in the
gradual phasing out of tariffs over a ten-year  period  on  textiles traded
between  the  two countries.  In 1992, the Canadian government implemented
the recommendation of the Canadian International Trade Tribunal ("CITT"), a
governmental administration trade tribunal which reduced tariffs on textile
fibers, yarns and  fabrics.   On  January  1,  1994, NAFTA was implemented,
enlarging the trading zone under the FTA to include  Mexico.   In 1995, the
Transition Agreement concluded under the Uruguay Round  agreements, replaced
the MFA.  The Transition Agreement results in the reduction  of tariffs and
the elimination of quotas on textiles among participating governments  over
a ten-year period.  Currently, Canada has significantly fewer quotas on the
importation  of  fabrics  from less developed countries than Europe and the
United States, while the United  States  has  strict  quotas  covering most
fabrics imported into the United States from many different countries.

 .....FTA.  Under the FTA, tariffs on most textiles and apparel products are
being  phased  out in 10 equal annual stages, the first of which  began  in
January 1989.  Consequently, as of January 1, 1998, tariffs no longer exist
on textiles and  apparel products produced within and traded between Canada
and the United States.   The  FTA  has  been  an  important  and favourable
development  for  Canadian  woven  textile manufacturers such as Consoltex.
From  its coming into force in 1989 to  the  end  of  1999,  annual  export
shipments  of  Canadian  woven  textile  fabrics  to the United States have
increased by 379% from $175 million  to  $838  million. The Canadian apparel
industry, which is a major customer group for the Canadian textile fabric
industry, has shown a positive trade balance with the United States in
apparel garments made from woven textile fabrics since the FTA was
implemented.  Exports  to  the  United States of Canadian apparel made
from woven fabrics have risen from $92 million in 1989 to $1.1 billion in
1999, representing an almost eleven-fold increase.

 .....CITT.  In December 1992, the Canadian federal government announced its
decision  to implement the 1990 CITT recommendations to reduce  tariffs  on
textile fibers,  yarns  and  fabrics  to  maximum rates of 5%, 10% and 16%,
respectively.  Current Canadian rates on these  products  are,  on average,
8%, 13% and 25%, respectively.  For imported man-made fabrics, other than
from the United States and Mexico, the reductions have been phased in at a
rate of 1.5% per year, beginning January 1, 1993 and in 1999 were 14.5%.

 .....NAFTA. Under NAFTA, the trading zone under the FTA had been enlarged
to include Mexico.   The provisions of FTA/NAFTA that are of primary
importance to the North American textile industry are tariff and quota
elimination, rules of  origin  for fabrics and apparel and exemptions to
these rules.  The tariff elimination schedule, as set out in the FTA,
remained unchanged under NAFTA. Under NAFTA, tariff elimination commenced
January 1, 1994. Between Canada and Mexico, tariff elimination for textiles
is taking place over eight years and for apparel, over ten  years. Between
the United States and  Mexico, tariff elimination is taking place over six
years. The tariff rates are as follows:


<TABLE>
<CAPTION>
<S>                            <C>
                       <C>
                       TARIFF ELIMINATION SCHEDULE
                       ---------------------------
<S>
</TABLE>
<TABLE>
<CAPTION>
                                                         1999   2000
                                                         ----   ----
<S>                            <C>                        <C>  <C>

Man-Made Textiles      Canada to Mexico and vice versa    NIL    NIL
Man-Made Apparel       Canada to Mexico                   8.0%   6.0%
Man-Made Apparel       Mexico to Canada                   7.5%   5.0%
Man-Made Textile
or Apparel             U.S. to Mexico and vice versa      NIL    NIL
Man-Made Textile
or Apparel             Canada to U.S. and vice versa      NIL    NIL

</TABLE>

 .....Specific  rules  of  origin apply to textiles and apparel products
imported into North America from  countries  other  than  in North America.
These  rules  set  forth  the  requirements to qualify for the preferential
North American tariff rates.  For  most  products,  the  rule  of origin is
"yarn-forward" which means that textile and apparel goods must be made from
yarn  made  in  a  NAFTA  country in order to benefit from the preferential
treatment.  NAFTA generally  provides for stricter rules of origin than the
rules of origin outside of the  applicability  of  NAFTA  as NAFTA requires
greater  sourcing  of  textiles  in North America.  However, exemptions  to
these rules of origin have been agreed  upon under NAFTA whereby a quantity
of fabric, a quantity of yarn and a quantity  of  apparel  (such limits are
referred to as "Tariff Preference Levels" or "TPLs") can be  made from non-
North American inputs and still qualify for the preferential tariff  rates.
The  impact  of the stricter rules of origin under NAFTA will be offset  in
part by increased  TPLs.   As  a  result  of  the  implementation of NAFTA,
Canadian textile and clothing industries using offshore  inputs  under  the
system  of  TPLs  have  longer-term  improved  access  to the United States
market.  Most TPLs increase by 2% per year for five  years starting in 1994.

 .....The implementation of NAFTA has resulted in increased trade  among the
United  States,  Canada  and Mexico.  The elimination of tariffs among  the
United States, Canada and  Mexico,  with  respect to textiles and apparels,
will provide Consoltex with additional opportunities to export a variety of
its products into Mexico, particularly those  from  its  specialty  product
lines,  as well  as  increase  the  export  sales  of  Consoltex's Mexican
operations.  As part of a NAFTA expansion, Canada has signed  a  Free Trade
Agreement with Chile ("CCFTA") which came into effect July 1997. The
agreement phases  out  Canadian and Chilean duties,  for  most  man-made
textiles, on a five-year basis to become duty-free  by 2001. Nevertheless,
the Canadian/Chilean duties are to follow the Canadian/Mexican  duty  rate,
in  the  case  of any acceleration of tariff elimination  between  Canada
and Mexico.  In such  case,  Canadian/Chilean duties will also be eliminated
regardless of what was scheduled.  CCFTA should increase Canadian trade with
Chile.

 .....TRANSITION  AGREEMENT.   In   December  1993,  the  Uruguay  Round  of
Multilateral Trade Negotiations resulted  in  a  series  of  agreements  to
reduce  tariffs  and  eliminate quotas.  The World Trade Organization and a
common framework for international  trade among 117 participating countries
was  established.   The  final  agreement   embodying  the  new  rules  was
implemented on January 1, 1995. A key objective of the Uruguay Round was to
return the textile and apparel sectors to the  GATT  under improved rules,
and the participating governments agreed to do so over  a  ten-year period.
Thus,  on  January  1, 1995, the MFA regime was replaced by the  Transition
Agreement which is effective  for  a period of ten years; during that time,
textile and clothing industry trade  is  integrated  into  the regular GATT
rules  which  provide for the elimination of quotas and prohibit  bilateral
quantitative restrictions.  Despite  the  gradual  elimination  of quotas
and reduction of tariffs (currently at 16.2% outside NAFTA in the  U.S. and
16% outside  NAFTA  in  Canada  for  man-made  fabrics  in 1999) under the
Transition Agreement, Consoltex believes that its status as a supplier of
specialty products requiring fast turnaround times will shield it from
competition  resulting from greater imports into the Canadian and U.S.
markets from developing  countries.  The Company expects that its knowledge
of  its customers' specialized needs should allow it to further increase its
customer base and withstand any increase in competition caused by regulatory
changes.  Moreover,  Consoltex will  continue  to  enjoy  duty-reduced  or
duty-free  access to the North American market, and Consoltex's physical
proximity to this  market  should allow  it  better  response  and delivery
times compared to its competitors abroad.

 ...Bilateral Agreement. A bilateral free trade agreement was signed between
Canada and Israel.  The agreement came into effect on January 7, 1997, and
provided for immediate duty-free access to the Israeli market.

 ....U.S. TRADE LEGISLATION ON "CBI/SUB-SAHARAN AFRICA."  Effective October
1, 2000, the U.S. Trade and Development Act of 2000, will provide duty-free
and  quota-free  entry  into  the United States for apparel assembled or made
in the Caribbean Basin or sub-Saharan Africa from U.S. fabrics made from U.S.
yarns (the "CBI/SS").  The Canada/U.S. FTA and NAFTA-enhanced opportunities
for Canadian textile producers  exporting to the United States  are diminished
by the CBI/SS.  The provisions of the new program require the  use of U.S.
fabrics and yarns in order for the apparel to benefit from duty-free and
quota-free entry.  Canadian fabrics are not eligible under the program.
The  CBI/SS  is expected to decrease purchases of Canadian manufactured fabrics
by U.S. apparel manufacturers in favour of U.S. manufactured fabrics;
negatively affecting the Textile Operations' sales of Canadian-produced fabric
to the United States and positively affecting  the  Textile  Operations'
fabric converting operations in the United States.


ENVIRONMENTAL REGULATION

 .....Consoltex has a corporate  environmental  policy which recognizes
the  importance of the relationship between Consoltex's  business  and  the
environment.   Consoltex  has  an environmental committee, reporting to the
Corporation's Board of  Directors, whose responsibility it is to  monitor
and review all of Consoltex's  Canadian  and  U.S.  plants  for compliance
with existing and anticipated legislative requirements. Environmental
compliance  by the  plants  in  Mexico  and  Costa  Rica  is monitored by
local management of Rafytek, Marino, VeraPak and Rafytica, respectively,
and is reviewed by the Chairman of the Environmental Committee who, in turn,
reports to the Corporation's Board. To assist the Environmental Committee
and the Chairman of the Environmental Committee in carrying out their
responsibilities, a quarterly report is prepared for each plant on various
aspects  of  its operations as they relate to the environment.

 ......Based upon its current knowledge, Consoltex does  not  anticipate
that  future  environmental  costs related to its existing operations  will
have  a  material  adverse  effect  on  Consoltex's  capital  expenditures,
earnings or financial or competitive position.

ITEM 2 - .DESCRIPTION OF PROPERTY

 .....The  following list sets forth the addresses of the principal
properties OWNED by Consoltex.


<TABLE>
<CAPTION>
Address          Types of              Type of              Approx.
                 Products              Installation>        Floor
                                                            Space
                                                            (sq.ft)
<S><C>              <C>                  <C>                   <C>

400 Willard       Fashion and home      Dyeing, finishing     295,000
Cowansville       furnishings           and printing
Quebec            fabrics

110 4th Avenue    Outerwear, home       Air-texturizing,      285,000
Montmagny         furnishings and       yarn and preparation
Quebec            industrial fabrics    and weaving

201 des Textiles  Fashion and home      Yarn preparation and  210,000
Cowansville       furnishings fabrics   weaving
Quebec

200 St. Georges   Outerwear, home       Dyeing, coating and   185,000
Alexandria        furnishings and       finishing
Ontario           industrial fabrics

4015 Brodeur      Home furnishings      Yarn preparation,      60,000
Sherbrooke        fabrics               twisting, and
Quebec                                  weaving

2550 West Fifth   Polypropylene-based   Extrusion, beaming,   690,000
North Street      woven and non-woven   weaving, coating,
Summerville       industrial fabrics    finishing and
South Carolina                          general and
                                        sales office

Parque Industrial Polypropylene-based   Extrusion, beaming,    431,600
Atlacomulco       woven industrial      weaving, finishing,
Mexico            fabrics and small     sewing and printing
                  bags

Fraccionamiento  Polypropylene-based   Extrusion, beaming,     131,900
Parque           woven industrial      weaving, coating,
Industrial       fabrics and IBC       finishing, sewing and
Santiago         bags                  printing
Tianguistengo
Mexico

Avenida Homero   None                  General and sales         2,333
1425-901                               office
Colonia Polanco
Mexico
11560, D.F.
Mexico

APDO 714-1007    Polypropylene-cut     Finishing, sewing        55,028
Centro Colon     and sew small bags    and printing
San Jose
Costa Rica


<PAGE>



The  following list sets forth  the  principal  properties  LEASED  by
Consoltex.


</TABLE>
<TABLE>
<CAPTION>
Address              Types of Product          Approx.         Expiry
                                               Floor Space     Year
                                               (sq.ft)
<S><C>                 <C>                     <C>              <C>
</TABLE>

8555, route           Head Office               37,500        2010
Transcanadienne
Saint-Laurent
Quebec

5585 Royal Mount      Warehouse and sales       28,000         2003
Town of Mount-Royal   office
Quebec

1040 Avenue of the    General and sales         50,400         2003
Americas              office
New York, New York

499 7th Avenue        Sales office               4,500         2003
New York, New York

5432 E. Slauson       Warehouse                  24,863         2005
Commerce
California

5434 E. Slauson      General, purchase           19,142         2005
Commerce             and sales office
California

304 South Leighton   Warehouse                   10,000         2003
Anniston, Alabama

2490 West Fifth      Polypropylene-fabric        50,400         2003
North Street         warehouse
Summerville
South Carolina

217 Industrial Blvd. Polypropylene-fabric        34,600         2000
Summerville          warehouse
South Carolina

13260 N.W. 45th      Polypropylene-cut & sew     75,000         2001
Avenue               FIBC bags
Opa-Locka,
Florida

4111 N.W. 47th       Polypropylene-refurbishing   22,470         2001
Avenue               FIBC bags
Opa-Locka,
Florida

13245 N.W. 47th      Polypropylene-refurbishing    20,000         2001
Avenue               FIBC bags
Opa-Locka,
Florida

13230 N.W. 45th      Polypropylene-refurbishing    10,000         2001
Avenue               and warehouse FIBC bags
Opa-Locka,
Florida

320 Highland Drive   Polypropylene-cut and sew     50,700         2002
Westampton           FIBC bags
New Jersey

1701 South Wintrop   Polypropylene-cut and sew     92,000         2014
Des Plaines          FIBC bags
Illinois

1730 Stebbins        Polypropylene-cut and sew     40,000         2002
Houston, Texas       FIBC bags

Av. 11 calle 39      Polypropylene-cut and sew     79,700         2004
Col. Pino Svarez     small and FIBC bags
Cordoba, Veracruz

Av. 7 calle 11       Polypropylene-cut and sew     60,000         2001
Col. Centro          small and FIBC bags
Cordoba, Veracruz

Av. 5, Col. Centro   Polypropylene-cut and sew     25,000         2000
Cordoba, Veracruz    small and FIBC bags

Parque Industrial    Manufacture of garments       49,500         2009
Textil No. 20        and sales office
Naucalpan, State
of Mexico

Parque Industrial    Manufacture of garments        8,600         2009
Proton No. 17
Naucalpan, State
of Mexico

Parque Industrial    Polypropylene-cut and        114,000         2003
Pueblo Viajes        sew FIBC bags
Carr San Luis
Zac 12.5
San Luis de Potosi


<PAGE>


 .....Consoltex's   plant  facilities  have  all  been  configured  and
equipped to be suitable for  the  manufacture  of  the products for each of
their respective operations.  All of  Consoltex's plants are being actively
utilized.  In 1998 and 1999, the Textile Operations' investments  were used
to expand  curtaining fabrics  production capacity. In order to address
capacity  and  extrusion constraints, investments were made to expand
manufacturing capabilities for non-woven  geotextiles and increase extrusion
capacity.  All of Consoltex's plants have sufficient capacity to service
existing demand.



ITEM 3 -  LEGAL PROCEEDINGS

 ......From  time  to  time,  the  Corporation  and its subsidiaries are
involved in routine legal and administrative proceedings  incidental to the
conduct  of its business.  Management does not believe that  any  of  these
proceedings  will have a material adverse effect on the financial condition
or results of operations of the Corporation.


ITEM 4 -  CONTROL OF REGISTRANT

 .....The outstanding  capital  stock  of  the  Corporation is made up as to
approximately 82.6% of Subordinate Voting Shares  and  as  to approximately
17.4%  of  Multiple  Voting  Shares.   The Multiple Voting Shares  and  the
Subordinate Voting Shares are identical  in  all  respects  except that the
Subordinate  Voting Shares have one vote per share and the Multiple  Voting
Shares have five  votes  per  share  and  are  convertible at any time into
Subordinate Voting Shares on a share-for-share basis.  At December 31, 1999
and to date, Les Gantiers Holding B.V. ("LGBV"),  a Netherlands corporation
ultimately  controlled by a trust for the benefit of  certain  children  of
Richard  H.  Willett   ("Trust"),   owned   approximately   17.4%   of  the
Corporation's  outstanding  capital  stock  and  approximately 51.3% of the
voting  power  of  the Corporation.  The Corporation  is  not  directly  or
indirectly owned or  controlled by a foreign government. LGBV, Les Gantiers
Limited, LGL and Trust  have granted to AIP an irrevocable option ending on
October 1, 2003, to purchase  all, but not less than all 3,140,000 Multiple
Voting Shares held by LGBV.


ITEM 5 -  NATURE OF TRADING MARKET

 .....The Corporation's Series B  Notes  are  traded in the over-the-counter
market in the United States.



ITEM 6 - EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

 ....Canada has no system of exchange controls.   There are no foreign
exchange  restrictions  on  the payments of interest or other  payments  to
holders of the Notes who are non-residents of Canada.


ITEM 7 - TAXATION

CANADIAN TAXATION

 ......Under the Income Tax  Act  (Canada)  (the "Act"), the Regulations
adopted thereunder and the administrative practice  of  Revenue  Canada, as
they exist as of the date hereof, the payments of interest on the  Series B
Notes  by the Issuers to a holder who is a non-resident of Canada and  with
whom the  Issuers  are  dealing  at  arm's length at the time of making the
payments will be exempt from Canadian  withholding  tax.  No other taxes on
income  (including  taxable  capital gains) will generally  be  payable  by
holders who are neither residents  nor deemed to be residents of Canada and
who do not use or hold and are not deemed or considered by such laws to use
or hold the Series B Notes in carrying  on business in Canada in respect of
the holding or disposition of any Series  B  Note or in respect of interest
thereon.  In certain circumstances, holders of  the  Series B Notes who are
non-resident  insurers  carrying  on an insurance business  in  Canada  and
elsewhere may, in particular, be subject to such taxes.

 .......This summary, which deals  only  with Series A Notes and Series B
Notes that are or were held as capital property,  is  not exhaustive of all
possible income tax considerations.

UNITED STATES TAXATION

 .........The following summary describes the material  U.S. federal income
tax  consequences to holders of the Series B Notes who hold  the  Series  B
Notes as an investment and not for sale to customers in the ordinary course
of a trade  or  business.   This discussion is based upon the provisions of
the Internal Revenue Code of  1986,  as  amended (the "Code"), regulations,
rulings and judicial decisions now in effect,  all  of which are subject to
change. The following does not discuss all aspects of  U.S. federal income
taxation that  may be relevant to a particular investor in  light  of  his
particular investment  circumstances  or  to  certain  types  of  investors
subject to special treatment under the U.S. federal income tax laws  (for
example, corporations, life insurance companies, tax-exempt organizations,
broker-dealers and others  who  do  not  hold their Series B Notes as
"capital assets" within the meaning of Section 1221  of  the Code, taxpayers
subject  to  the alternative minimum tax and non-U.S. taxpayers) and does
not discuss any aspects of state, local or foreign tax laws or any estate or
gift tax considerations.   Investors should consult their own tax advisors
regarding the United States federal,  state,  local,  and  foreign income
and other tax considerations of owning the Series B Notes.



<PAGE>


 ........PAYMENT OF INTEREST ON THE SERIES B NOTES.
A holder of a Series B Note is required to report as income  for federal
income tax purposes interest earned on the Series B Note in accordance
with  the  holder's  method  of tax accounting.  A holder of a Series B Note
using the accrual method of  accounting  for  tax purposes is required  to
include interest in ordinary income as such interest  accrues, while a cash
basis holder must include interest in income when payments are received
(or made available for receipt) by him.  Interest is considered to be 54.17%
from  U.S.  sources  which  is  the  extent of the portion of the Series B
Notes allocated to Consoltex (USA) Inc.  under  the  Intercompany Agreement
and  45.83%  from  foreign  sources  which  is the extent of the portion
of the Series B Notes allocated to the Corporation  under  such agreement.

 ..........SALE, EXCHANGE OR RETIREMENT OF THE SERIES B NOTES
A holder of a Series  B  Note generally would have a tax basis in
the Series B Note equal to the price  paid  for  the  Series  B Note or the
Series  A  Note exchanged therefor.  A holder of a Series B Note  generally
will recognize gain or loss on the sale, exchange, redemption or retirement
of the Series  B  Note  equal to the difference (if any) between the amount
realized  from  such sale,  exchange,  redemption  or  retirement  and  the
holder's basis in  the Note.  Such gain or loss will generally be long-term
capital gain or loss  if  the  Note  has  been  held for more than one year
(including  any holding period with respect to a Series  A  Note  exchanged
therefor) and  otherwise  will  be short-term capital gain or loss (but see
discussion  of  market  discount  below).  Non-corporate  taxpayers  should
consult their own tax advisors as it  relates  to  the calculation of their
gains or losses.

 ..........MARKET DISCOUNT
A purchaser of either a Series A Note subsequent  to  its initial
issue or a Series B Note, in either case, at a price that is less  than the
stated redemption price of the Series B Note at maturity will generally  be
subject  to the market discount provisions of sections 1276 through 1278 of
the Code.   Market  discount is generally equal to the excess of the stated
redemption price of the  Series  B  Note  at maturity over the holder's tax
basis in such Note.  Market discount will be  considered to be zero if such
market  discount  is  less  than 0.25% of the stated  redemption  price  at
maturity  of the Series B Note  times  the  number  of  complete  years  to
maturity (that  remain  after  the  holder's  acquisition  of  the Series B
Note).

 .....If a holder realizes a gain upon disposition of a Series  B Note,
the  lesser  of  (i)  the excess of the amount received on such disposition
over the holder's tax basis in the Series B Note or (ii) the portion of the
market discount that accrued  while  the  Note  was  held  by  such  holder
(including  any  holding  period  with respect to a Series A Note exchanged
therefor) and that was not previously  included in income generally will be
treated  as ordinary interest income at the  time  of  disposition.   If  a
holder disposes  of  a  Series B Note in any transaction other than a sale,
exchange or involuntary conversion (e.g., as a gift), that holder generally
will be treated as having realized an amount equal to the fair market value
of the Series B Note and  will  be required to recognize as ordinary income
any gain on disposition to the extent of the accrued market discount.  As a
result, a holder could be required  to  recognize ordinary interest income,
even though the disposition would not otherwise be taxable. Market discount
will be considered to accrue ratably during  the  period  from  the date of
acquisition  to the maturity date of the Note, unless the holder elects  to
accrue on the basis of semiannual compounding.

 .....A holder will generally be required to defer the deduction of all
or a portion of  the  interest paid or accrued on any indebtedness incurred
or maintained to purchase  or  carry  such  Note  until the maturity of the
Series B Note or its earlier disposition in a taxable transaction.

 .....A holder may elect to include market discount in income currently
as it accrues (on either a ratable or a semiannual  compounding  basis), in
which  case  the  rules described above regarding the treatment as ordinary
income of gain upon  the disposition of the Series B Note and regarding the
deferral of interest deductions will not apply.

 .....AMORTIZABLE BOND PREMIUM
If a holder's  tax  basis in a Series B Note immediately after
such holder acquires it exceeds the amount payable at maturity, such holder
should consult a tax advisor to determine  the  availability of an election
to deduct the excess as amortizable bond premium pursuant to section 171 of
the Code.

BACKUP WITHHOLDING
A holder of a Series B Note may be subject  to backup withholding
at the rate of 31% with respect to certain payments of  principal, premium,
if any, and interest, on the Series B Notes, and to proceeds of the sale or
redemption of the Series B Notes, unless such holder (a)  is  a corporation
or  comes  within  certain  other  exempt  categories  and,  when required,
demonstrates  this  fact  or (b) provides a correct taxpayer identification
number, certifies as to no  loss  of  exemption from backup withholding and
otherwise complies with applicable requirements  of  the backup withholding
rules.   A holder of a Series B Note who does not provide  the  Corporation
with his correct taxpayer identification number may be subject to penalties
imposed by  the  IRS.   Any  amount  paid  as  backup  withholding  will be
creditable against the holder's income tax liability.



<PAGE>



ITEM 8 -  SELECTED CONSOLIDATED FINANCIAL INFORMATION

The  following Selected Consolidated Financial Data for the  five
years  ended  December  31,  1999,  have  been  derived  from  the  audited
Consolidated Financial  Statements  of  the  Corporation, for such periods.


<TABLE>
<CAPTION>

<PAGE>




                                Consoltex  Inc.  (1)
                 ------------------------------------------------------
<S>                                   <C>
                              (in thousands of dollars)
</TABLE>
<TABLE>
<CAPTION>




                                Year ended December 31
                --------------------------------------------------------
<S>                                  <C>              <C>
</TABLE>
<TABLE>
<CAPTION>
                     ------------------------------------------------
                     1995        1996     1997      1998       1999
                                 (2)      (3)       (3)        (4)
                     ------------------------------------------------
<S><C>               <C>         <C>       <C>      <C>        <C>
EARNINGS
STATEMENT
DATA:              (Restated)(Restated)(Restated)(Restated)

Sales                $446,882   $494,352 $509,447 $481,299 $510,343
Cost of sales         352,330   $392,630  398,100  368,244  396,819
Selling and
administrative
expenses               44,130     46,231   50,141   49,296   56,229
Foreign exchange
(gain) loss		         68         40     (509)   3,434    (110)
Depreciation and
amortization            18,895    20,127    19,256   21,077  25,182
                        ------    ------    ------   ------  ------

Earnings from
operations              31,459    35,324    42,459   39,248  32,223
Other income
(expnese)-net           10,733     (910)       --     (255) (4,435)
Financing costs         29,488    32,713    28,004   29,906  32,680
                        ------    ------    ------   ------  ------

Earnings (loss)
before income taxes     12,704     1,701    14,455    9,087  (4,892)
Provision for
income taxes             3,967     2,357    3,625     3,631      241
                         -----     -----    -----     -----    -----

Net earnings (loss)     $8,737    $(656)  $10,830    $5,456  $(5,133)
                       =======   =======  =======   =======  ========

BALANCE SHEET DATA
(AT END OF PERIOD)

Working capital        $37,980   $59,831  $63,576  $60,117  $(1,557)
Total assets           386,304   389,477  397,284  423,084   499,503
Long-term debt         186,401   204,048  198,646  202,026   173,184
Shareholders'
equity          	      52,939    52,037   68,422   74,272    76,987
</TABLE>

(1)  No cash dividends on the Corporation's outstanding  shares
     were paid during the financial periods shown in this table.

(2)  Includes  the  eight-month  results  of  the  Erlanger Blumgart
     assets acquired by Balson-Hercules on May 1, 1996.

(3)  In 1999, the Company retroactively adopted new recommendations for
     the accounting for income taxes which requires the  use  of  the asset
     and liability  method.

(4)  Includes  the  results  of  the  following  acquisitions -
     Royalton  on  February 26, 1999, Marino on July 1, 1999 and Atlas
     on October 1, 1999.



<PAGE>


               QUARTERLY CONSOLIDATED FINANCIAL INFORMATION
                         (IN THOUSANDS OF DOLLARS)
                                (UNAUDITED)


<TABLE>
<CAPTION>

                                    Quarter ended
                     ------------------------------------------------
<S> <C>
</TABLE>
<TABLE>
<CAPTION>

                      March       June      Sept.     Dec.     Year
                      31,         30,       30,       31,      ended
                      1999        1999      1999      1999     Dec.
                                                               31,
                                                               1999
                     ------------------------------------------------

<S><C>                  <C>       <C>        <C>      <C>        <C>

Sales                $114,944  $126,604  $126,232  $142,563  $510,343

Earnings from
operations             $8,909   $9,349     $7,964    $6,001   $32,223

Earnings (loss)
before income
taxes                 $1,652   $1,927    $(3,011)  $(5,460)  $(4,892)

Net earnings (loss)
for the period        $1,134     $268    $(2,793)  $(3,742)  $(5,133)
</TABLE>



<PAGE>


                              DIVIDENDS

 .....The Corporation  currently  intends  to retain earnings to finance the
growth and development of its business and does not intend to pay dividends
on its Multiple Voting Shares and Subordinate  Voting Shares (collectively,
the "Equity Shares") in the foreseeable future.   Any  future determination
as to the payment of dividends will be at the discretion  of  the  Board of
Directors of the Corporation.  In addition, the indenture pursuant to which
the   Corporation   issued   the   Series  B  Subordinated  Notes  and  the
Corporation's senior credit facility both contain restrictions limiting the
payment of dividends on the Equity Shares.


ITEM 9 - MANAGEMENT'S DISCUSSION AND  ANALYSIS  OF  FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

OVERVIEW

 .......The  Company reported  a loss of $5.1  million  in  1999 compared to
net earnings of $5.5 million in  1998.  The  decrease in  profitability is
principally due to a) $4.4 million of shareholder value enhancing costs
incurred  as  part  of  the process  which resulted going private b) 2.5%
decrease in sales, excluding the effect of the Royalton, Marino and Atlas
acquisitions, resulting  from increased import competition on certain
product lines, c) the negative impact  of  intense price competition in the
Polypropylene Operations, and d) the increase  in both depreciation expense
and  amortization  charges  relating to additional  goodwill  and  deferred
financing expenses.

 .....The  Company successfully  completed  three  acquisitions  in  1999  -
Royalton on  February 26, 1999, a Mexican apparel manufacturer of outerwear
and fashion apparel,  and  Marino  and  Atlas,  effective  July 1, 1999 and
October 1, 1999,  respectively, FIBC bag  manufacturers and distributors.
These acquisitions are all  strategic  for  the Company's current and future
operations.  Royalton is a strategic acquisition, in that it provides the
Company's U.S. fabric customers an alternative to enabling them to source
the garments in North America using the Company's fabrics, rather than
sourcing  their  garments  in Asia where it is much more difficult to have
the Company's fabrics included as part of the garment construction. The
acquisition of  Marino  and  Atlas are strategic as they give the Company
a secure market  for its fabric sales, as well as catapults the Company
to be as the North American industry leader in this market.


<PAGE>


 .....The Company continued to suffer in certain  of  its  commodity segment
markets in 1999 as a result of severe import competition from both
imported fabrics and garments. This resulted in a decrease in sales and
operating  profits  in the Company's Canadian  vertical  textile facilities.
Consoltex is responding to this import challenge by focusing on fabrics
which are more import restrained, due  to their technical nature and customer
service requirements, and by competition against imports through Consoltex's
U.S. converting and importing network.

 .....In  1999,  the Company retroactively adopted new recommendations by
the Canadian Institute  of  Chartered  Accounts ("CICA") for the accounting
for income taxes which requires the use  of the asset and liability method.
Under this method, future income taxes are recognized for the future income
tax  consequences  attributable  to  differences   between   the  financial
statements carrying values and their respective income tax basis (temporary
differences).  Future income tax assets and liabilities are measured  using
enacted  income  tax rates expected to apply to taxable income in the years
in which temporary  differences  are  expected  to be recovered or settled.
The effect on future income tax assets and liabilities  of  a change in tax
rates is included in income in the period in which the change  occurs.  The
amount of future income tax assets recognized is limited to the amount that
is "more likely than none" to be realized.

 .....In   1999,   the   Company   retroactively   adopted  the  CICA's  new
recommendations concerning statements of cash flows.

PERFORMANCE BY SECTOR

 .....The   Company  conducts  its  business  in  two  principal   operating
businesses  i)  the  Polypropylene  Operations,  which  manufactures
polypropylene-based  fabrics  and  bags  for  industrial  and  agricultural
purposes   and  ii)  the  Textile  Operations,  which  manufactures,
distributes  and  imports  polyester, polyester rayon, voile,
nylon and acetate-based fabrics for a wide  variety of apparel, industrial,
home furnishings and recreational uses.

<PAGE>


The  following  table  sets forth certain information  summarizing  segment
results for fiscal years 1999, 1998, and 1997.

<TABLE>
<CAPTION>
<S>                                          <C>
                                    (In thousands of dollars)
</TABLE>
<TABLE>
<CAPTION>
                                    1999         1998       1997
                                                  (1)        (1)
                                    ---------------------------------
<S>                                   <C>         <C>        <C>

Sales :
  Textile Operations                $317,087    $314,652   $329,950
  Polypropylene Operations           193,256     166,647    179,497
                                    -------------------------------

Total :                              510,343     481,299    509,447
                                    -------------------------------

EBITDA(2):
  Textile Operations                  37,258      42,662     38,255
  Polypropylene Operations            25,678      26,170     30,075
  Corporate                           (5,245)     (5,073)    (7,124)
                                     -------------------------------

Total :                               57,691      63,759     61,206
                                     -------------------------------

  As a percentage of sales             11.3%       13.2%      12.0%

American Industrial Partners -
Management Fee                          (396)         -         -
Foreign exchange gain (loss)              110     (3,434)       509
Depreciation and amortization         (25,182)   (21,077)   (19,256)
Other expense                          (4,435)      (255)       -
Financing costs                       (32,680)   (29,906)   (28,004)
Income tax expense                       (241)    (3,631)    (3,625)
                                      --------------------------------

Net earnings (loss)                   $ (5,133)    $ 5,456   $ 10,830
                                      ================================

</TABLE>

1    In 1999, the Company retroactively adopted new recommendations for the
     accounting for income taxes which requires the use of the asset and
     liability method. As a result of these new recommendations, prior
     years' financial statements have been restated.

2    EBITDA is defined as earnings before interest, taxes, depreciation,
     amortization and foreign exchange (excluding non-recurring items and
     the American Industrial Partners Management Fee).


RESULTS OF OPERATIONS
COMPARISON OF YEARS 1999 AND 1998
---------------------------------

SALES

 .....Sales for the year 1999  totaled $510.3 million, an increase of
6.0%  compared  to the $481.3 million  reported  in  1998.   Excluding  the
additional sales  from  the  Royalton,  Marino  and  Atlas  acquisitions in
1999, sales were 2.5% lower than in 1998.


<PAGE>


TEXTILE OPERATIONS SALES

 .....Textile Operations sales increased by 0.8%, from $314.7 million in
1998, to $317.1 million in 1999.  This increase is primarily  a  result  of
the continued strong growth in demand for high margined curtaining fabrics,
the  growth  in  the  Seatex  and  John King nylon converting and importing
divisions  and  the growth in the Industrial  division.   This  growth  was
partially offset  by  weaker  sales  in  the  Fashion  and  Apparel Linings
divisions, which are being adversely affected by strong import  competition
from Asian countries selling garments into North America.  The increase  in
imported  fabrics  and  garments from overseas countries have significantly
reduced North American manufacturing activity for the apparel markets.


POLYPROPYLENE OPERATIONS SALES

 .....Polypropylene Operations sales increased by 16.0%, from $166.6 million
in 1998 to $193.3 million in 1999.  This increase is mainly attributable to
the Company's decision to  buy two of its largest customers.  Excluding the
effect on sales of the Marino  and  Atlas  acquisitions,  third party sales
decreased by 4.8%.  Sales which were recorded as third party  sales in 1998
to  Marino  and  Atlas  are  now  recorded  as  intercompany sales and  are
eliminated on consolidation. This  accounted for most of the 4.8% net
decrease in third party sales in 1999.


EBITDA

 .....EBITDA  totaled  $57.7  million  in 1999 compared to $63.8 million  in
1998.  Gross profits margins decreased  from 23.5% in 1998 to 22.2% in 1999
due to lower volume in the Fashion division and the one time effect in 1998
of proceeds from an insurance claim relating to an ice-storm in January 1998
and its effect on the Textile Operations Canadian facilities.

 .....Selling  and  administrative  expenses,  as  a  percentage  of  sales,
increased to 11.0% in  1999  from  10.3% in 1998 due to the impact of lower
sales  volumes and certain fixed administrative  expenses.   Administrative
expenses  include restructuring costs amounting to $2.0 million and severance
costs in our Textile Operations in Canada and the closure of a Textile
Operations' accounting office in Rhode Island.


TEXTILE OPERATIONS


 .....EBITDA  in  the Textile Operations decreased from $42.7 million in
1998 to $37.3 million  in  1999.   The principal cause for the decrease was
the 30% reduction in Fashion division  sales  and  the  resulting effect on
lost margins and under-recovery of overhead and the $2 million of
restructuring costs incurred. The Balson-Hercules converting/importing
EBITDA increased in 1999 as it lowered its sourcing costs as it was
importing a greater quantity of fabrics from Asia at lower prices
resulting in improved margins.


<PAGE>


POLYPROPYLENE OPERATIONS

 .....EBITDA in the Polypropylene Operations decreased from $26.2 million in
1998 to $25.7 million in 1999.  This  decrease, notwithstanding the partial
year benefits of the Marino and Atlas acquisitions,  is primarily due to a)
the  disruption at LINQ of installing an integrated enterprise  resource
planning hardware and software system,  b) severe price competition on both
fabrics and small and FIBC bags, and c)resin costs increasing rapidly in the
last half of 1999 and the inability of Polypropylene Operations to recover
this resin cost increase through increased selling prices.

<PAGE>


FOREIGN EXCHANGE GAIN OR LOSS

 .....The foreign exchange gain of $0.1 million  in  1999  resulted  from an
exchange  gain  on  net  monetary  assets  in  Mexico,  partially offset by
realized losses on forward exchange contracts.  The  $3.4  million foreign
exchange loss in 1998 includes a $2.1 million loss related to the devaluation
of the Mexican peso on net monetary assets of the Company's Mexican
subsidiaries.  Due to hyperinflationary accounting practices, these losses
in Mexico are charged  to  earnings  and not  the  deferred  translation
adjustment account. The balance of foreign exchange losses in 1998 include
a $0.7 million loss on net monetary assets denominated  in U.S. dollars
held by integrated subsidiaries and a $0.6 million loss on forward foreign
exchange contracts.


FINANCING COSTS

 .....Financing costs in 1999 increased to  $32.7 million from $29.9 million
in 1998.  Financing costs consist of two components  i)  interest  expense,
including  factor  expense,  which increased from $28.2 million in 1998  to
$30.3 million in 1999, and ii)  amortization  of  deferred financing costs,
which increased from $1.7 million in 1998 to $2.3  million  in 1999.

 .....The  increase  in  1999  interest expense is primarily a result of the
impact of additional debt due to  three  acquisitions  and  slightly higher
average  interest  rates.   Weighted  average  interest rates on debt  were
9.8% in 1999 versus 9.9% in 1998.  Average  interest rates on bank debt were
9.1% in 1999 compared to 7.7% in 1998, while the interest rate on the
Company's Senior Subordinated Notes is fixed at 11%. Average U.S. dollar debt
levels rose to US$190.5 million in 1999 versus US$173.7 million in 1998.

 .....The amortization of deferred financing costs was higher in 1999 as the
financing fees related to the new term loans for the 1999  acquisitions and
related amendments to the Senior Bank Facility is being amortized over the
period until October 31, 2000.


INCOME TAXES

 .....Income  tax  expense in 1999 was $0.2 million compared to $3.6 million
in 1998.  The difference  between the effective tax rates for each of these
years  and  the  composite  statutory   rate   in   Canada  -  of  39.8%
for 1999 and 39.8% for 1998 - arises largely from non-deductible amortization
of  goodwill,  non-deductible foreign exchange losses and large corporation
and alternative  minimum  taxes in Canada, the United  States  and  Mexico.
The  1998  effective  tax  rates  were  also positively  affected by the
application of tax loss carry forwards  against earnings generated in Mexico
for which no benefits had previously been recorded.

<PAGE>



COMPARISON OF YEARS 1998 AND 1997
---------------------------------

SALES

 .....Sales for the year 1998 totaled $481.3 million,  a  decrease  of  5.5%
compared to the $509.4 million reported in 1997.

<PAGE>



TEXTILE OPERATIONS SALES

 .....Textile  Operations  sales  decreased  by 4.6%, from $330.0 million in
1997, to $314.7 million in 1998.  This decrease is mainly a result of lower
demand  for  our  polyester and polyester blend  fabrics  due  to  changing
fashion trends and  increased  import competitions for fabrics and garments
in the North American market.  Demand for apparel and nylon based outerwear
fabrics was also soft resulting  from  increased  Asian  import penetration
into  the U.S. market.  This decrease was partially offset  by  significant
growth  in  the  Company's  Home Furnishings curtaining fabrics through
increased export sales from Canada to the United States as well as increased
sales  of  industrial  textiles, particularly  military  fabrics used to
produce  garments  for  the Canadian Armed Forces.


POLYPROPYLENE OPERATIONS SALES

 .....Polypropylene Operations sales  decreased by 7.1%, from $179.5 million
in 1997 to $166.6 million in 1998.  This decrease is mainly attributable to
the Company's decision to reduce sales  of  primary  carpet backing fabrics
due to the low margins earned on these products  and the need for significant
associated capital expenditures. Sales in Polypropylene Operations were also
affected by dry weather conditions  in  the southern United States and Mexico,
which  lowered  the demand for cotton  bale  wrap  as well as agricultural and
fertilizer bags. Sales in Mexico increased by 4.7% while the Mexican operations'
bag conversion facilities increased their  export sales by 58% over 1997.  U.S.
dollar denominated sales from Mexico increased from 36% of Rafytek sales in
1997 to 47% in 1998.


EBITDA

 .....EBITDA totaled $63.8 million in 1998  compared  to  $61.2  million  in
1997.   Despite  the  decrease  in  sales, gross profits increased as gross
margins grew from 21.9% in 1997 to 23.5% in 1998 due to the Company's focus
on eliminating low margin sales and increasing  higher margin sales through
increased new product development and the benefit  of  an  insurance  claim
included in cost of goods sold.

 .....Selling  and  administrative  expenses,  as  a  percentage  of  sales,
increased  to  10.3%  in  1998 from 9.8% in 1997 due to the impact of lower
sales  volumes on certain fixed  administrative  expenses.   Administrative
expenses  include  restructuring costs amounting to $1.0 million, offset by
the gain of $0.7 million  on  the  sale of land adjacent to our Costa Rican
plant.

<PAGE>


TEXTILE OPERATIONS

 .....EBITDA in the Textile Operations  increased  from $38.3 million in
1997  to  $42.7  million  in  1998.   The  Textile Operations  successfully
developed  and  sold  new  higher margin fabrics,  particularly  curtaining
fabrics for home furnishings  markets  and  industrial  fabrics.  Increased
sourcing of lower price yarn and fabrics from Asia, reduced sourcing prices
from  U.S.  mills  and  finishing  plants for the  Company's U.S. based
converting business and improved product  mix  towards  home furnishings
fabric sales (which have a higher profit margin than the fashion and nylon
apparel fabrics) all helped to increase operating  profits.  The Textile
Operations also benefited from the impact of a weaker Canadian dollar
vis-a-vis the U.S. dollar on export sales from Canada to the United States.

POLYPROPYLENE OPERATIONS

 .....EBITDA in the Polypropylene Operations decreased from $30.1 million in
1997 to $26.2 million in 1998.  This decrease was primarily due to the
decision to reduce participation in the  primary carpet backing market.
The  number  of  square  yards  of  fabric produced  by  the  U.S.
manufacturing plant was approximately 23% lower in  1998 versus 1997,
resulting in higher fixed costs per unit.  The impact of lower primary
carpet  backing  sales  was in part offset by higher sales of non-woven
geotextile fabrics and sales  of  bulk bags by Rafytek, both of which
resulted in an increase in average gross  margins  for the Polypropylene
Operations.


FOREIGN EXCHANGE LOSS

 .....The $3.4 million exchange loss in 1998 includes  a  $2.1  million loss
related  to  the devaluation of the Mexican peso on net monetary assets  of
our the Company's  Mexican subsidiaries. Due to hyperinflationary accounting
practices, these losses in Mexico are charged to  earnings and not the
deferred translation adjustment account. The balance of these foreign exchange
losses include a $0.7 million loss on net monetary  assets denominated in U.S.
dollars  held by integrated subsidiaries and a $0.6 million loss on forward
foreign exchange contracts. The $0.5 million gain on foreign exchange in 1997
relates primarily to a gain on net monetary assets in Mexico.

FINANCING COSTS

 .....Financing  costs in 1998 increased to $29.9 million from $28.0 million
in 1997.  Financing  costs  consist  of two components i) interest expense,
including factor expense, which increased  from  $25.1  million  in 1997 to
$28.2  million  in 1998, and ii) amortization of deferred financing  costs,
which decreased from $2.9 million in 1997 to $1.7 million in 1998.

 .....The increase  in  interest expense is primarily a result of the impact
of the significantly weaker Canadian dollar on  the predominately  U.S.
dollar denominated debt of the Company.  Also, in 1997 interest expense was
reduced  by  interest revenue of $1.6 million arising from an Investment
Tax Credit ("ITC")  refund.  Weighted average interest rates on debt,
excluding the ITC interest refund in 1997, were 9.9% in 1998 versus 10.1%
in 1997.  Average interest  rates  on  bank  debt dropped from 7.9% in 1997
to 7.7% in 1998, while the interest rate on the Company's Senior Subordinated
Notes are fixed at 11%.  Average U.S. dollar debt levels rose slightly to
US$173.7 million in 1998 versus US$171.5 million in 1997.

<PAGE>



 .....The amortization of deferred financing costs was lower in  1998 as the
financing fees related to the revolving bank facility were fully  amortized
in 1997.


INCOME TAXES

 .....Income tax expense in 1998 was $3.6 million, the same as in 1997.  The
difference between the effective tax rates for each of these years  and the
composite  statutory  rate  in  Canada  -  of  39.8% for 1998 and 39.6% for
1997  -  arises  largely  from:  non-deductible  amortization  of
goodwill,  non-deductible foreign exchange losses and  alternative
minimum taxes  in  Canada, the United States and Mexico.  The 1998 and 1997
effective tax rates were also positively affected by the application of tax
loss carry forwards  against  earnings  generated  in  Mexico  for which no
benefits had previously been recorded.


LIQUIDITY AND CAPITAL RESOURCES


 .....The  Company's  total  outstanding  debt at year-end 1999 was
$304.4 million  compared  to $251.4 million in 1998 and $231.7 million in
1997. The  ratio of  debt  to  total  capital (comprised of debt plus
shareholders' equity), including the deferred translation adjustment
("DTA" ), was 80% in 1999 compared to 77% in 1998 and 1997. The Company's
debt to total capital ratio changed in 1999 as the Company completed three
acquisitions, all financed with debt.

 .....Operating  lines of credit available from the Company's Senior
Bank Facility totaled $83.0 million on December 31, 1999, of which $27.4
million remained unused.

 .....The  Company's  cash  requirements  consist   principally  of  working
capital, payments of principal and interest on its outstanding indebtedness
and  capital  expenditures.   The  Company  believes that  cash  flow  from
operating activities, cash on hand, and periodic  borrowings  from existing
credit  lines will be adequate to meet its operating cash requirements  and
current maturities  of  debt for the foreseeable future. As the Company
is considered highly leveraged  its  ability  to  seek  additional lines of
credit may be hampered.

 .....The  Company's overall cash needs in 1999 were provided  primarily  by
its cash flow  from  operations.  Acquisitions were principally funded with
new term debt.  Net cash flows from (used in) operating activities amounted
to ($6.3) million in 1999, $18.1 million in 1998 and $29.8 million in 1997.
The Company is currently  negotiating  with  its senior lenders  to  extend
the maturity of its Senior Bank Facility which currently matures on
October 31,  2000. These discussions are ongoing and are expected to be
completed in the next few months.


CAPITAL EXPENDITURES


 .....As part of its focus on improving operational  efficiency, the Company
made  substantial  investments in capital expenditures,  aggregating  $57.3
million over the last  three years.  During 1999, additions to fixed assets
totaled $15.8 million compared  to  $21.2  million  in  1998.   In 1999,
capital expenditures in the Polypropylene Operations amounted  to $9.4
million  principally  to increase extrusion capacity and modernize computer
systems.  Expenditures  in  the Textile Operations amounted to $6.4 million
to  expand  curtaining fabrics  production  capacity  and  improve  quality
control systems.   Disposals  of  fixed  assets in 1998 include the sale of
land  adjacent  to  the  Rafytica plant in Costa  Rica  for  $1.3  million,
resulting in a gain of $0.7 million.

<PAGE>


FINANCING ACTIVITIES


 .....In March 1996, the Company entered into a US$85 million Senior Bank
Facility providing it with a US$35 million term facility and a US$50 million
revolving  credit facility.  This facility increased the Company's available
lines  of  credit,  reduced withholding  taxes  and  provided  for  lower
annual interest cost.  The proceeds  of the facility were used to repay all
existing  debt,  excluding the Senior Subordinated Notes.

 .....In  1999,  the Company  negotiated an amended and restated Senior Bank
Facility providing it with a US$57.5 million revolving credit facility and
term loans which totaled US$55 million. The principal reason for the amended
and restated Senior Bank Facility was to finance the three acquisitions
completed during 1999.

 .....At December 31, 1999,  the outstanding balance on the senior bank term
loan was US$55 million.  Term  loan  repayments  during  1999  amounted  to
US$7.0 million.


RISKS AND UNCERTAINTIES

NORTH AMERICAN TEXTILE INDUSTRY

 .....The  North  American  textile  industry  is  sensitive  to  changes in
economic  conditions,  competition  from  imports  and  changes in consumer
preferences.   The industry is also subject to various North  American  and
international regulatory  agreements.  Under the Uruguay Round of the World
Trade Organization, many of  the  advantages  currently  available  to  the
Company as a result of the North American Free Trade Agreement will decline
over  the  ten-year  period begun in 1995, which could eventually result in
additional competition  in  the North American market. In addition, the
CBI/SS may have a negative effect  on  sales  of  fabrics  from the Textile
Operation's Canadian operations to the United States.  Reference is made to
"Item 1 - Description of Business - Regulatory Environment"  of  this  Form
20-F.

RAW MATERIAL COSTS

 .....Consoltex's  Polypropylene  Operations  are  affected  by the price of
polypropylene  resin  which  fluctuates  based on international supply  and
demand for this product.  To the extent that  the market does not allow the
Company to pass on price increases to its customers,  the  gross profits of
the Company can be negatively affected.


INTEREST RATES AND EXCHANGE RATES

 .....The Company had a portion of its bank borrowings at floating  interest
rates on December 31, 1999, and is exposed to changes in interest rates  in
Canada  and the United States.  The Company has contracted to hedge against
the interest  exposure  on  US$5 million of its floating rate indebtedness,
which totaled US$90.3 million as at December 31, 1999.

 .....The Company is also exposed  to  fluctuations in the value of the U.S.
dollar  in  relation to the Canadian dollar,  as  the  Canadian  operations
record over 50% of their revenues in U.S. dollars. All of the Company's
debt  on  December 31, 1999 was denominated in U.S. dollars. The Company
has a partial  hedge for its U.S. dollar denominated sales from Canada to
the  United  States  as  the  Canadian  operations  purchase a significant
portion of their raw materials and capital expenditures in U.S. dollars,
and payments of interest and principal on bank borrowings are also in U.S.
dollars.  In order to mitigate the foreign exchange risk associated with
the future sale of excess  U.S.  dollar  cash  flows  generated by the
Canadian operations, the Company from time to time, contracts to sell US
dollars  and  to  receive payment in Canadian dollars in future periods, by
entering into forward  foreign  exchange  contracts.  At December 31, 1999,
US$7 million of such contracts remain outstanding.

 .....To alleviate the exchange rate effect  of U.S. dollar denominated debt
on the balance sheet, the Company has designated  a  portion  of the Senior
Subordinated  Notes as a hedge to the net investment in its self-sustaining
U.S. operations.

 .....The Company  is  also  exposed  to the fluctuation in the value of the
Mexican peso as it has significant peso  denominated  net  monetary assets.
Currently,  U.S.  dollar  denominated  sales from Rafytek are approximately
equal to its U.S. dollar denominated costs,  being  primarily polypropylene
resin and spare parts for equipment.

 .....Between January 1, 1997 and December 31, 1998, Mexico was considered a
"hyperinflationary"   economy  for  foreign exchange translation  purposes.
This decision, by the Securities and  Exchange  Commission  in  the  United
States,  was  reached  primarily because the Country's cumulative inflation
rate was in excess of 100% over a  three-year period.  As a result, in 1997
and  1998,  on  consolidation,   instead  of  valuing  Rafytek  assets  and
liabilities at the current peso exchange  rate  and  charging the change in
value  to  the DTA account in Shareholders' Equity, the  gain  or  loss  on
translation  of  peso  denominated monetary assets or liabilities is
charged to the income  statement.   Non-monetary  assets, such as fixed
assets,  are pegged at the historical exchange rate of December  31,  1996,
and the DTA  is  locked-in  at  the  amounts recorded at December 31, 1996.
Since  January  1,  1999,  the  Mexican economy  is  no  longer  considered
hyperinflationary and therefore all future foreign exchange fluctuations on
peso denominated net assets will be reflected in the DTA account.


<PAGE>


YEAR 2000 ISSUE

 .....The  Company  has  prepared its  information  systems  and  production
equipment to deal with the issues related to the year 2000(the "Y2K Issue").
This was necessary because certain computer programs or microprocessors use
two digits rather than four to define the applicable year. Left uncorrected,
this  could  have generated  erroneous data or caused systems to fail in
2000 because the year may not have been properly recognized as "2000", but
rather recognized as some other year such as "1900".

 .....During  1998  and  1999,  the  Company  undertook efforts to implement
its Year 2000 Compliance Plan throughout the organization. This included
modifying  or  replacing computer software, hardware and embedded systems
in shop floor equipment.  Planned application and  equipment  updating  was
completed.  When appropriate,  the  Company's integrated applications,
process control software and embedded systems were represented to be compliant
by their respective vendors.

 .....As  of  December 1999, the  Company  had  spent  approximately $2.5
million  on  the project since its inception of which $1.5 million was
capitalized  as software development and $1.0 million as expense. The
total cost for addressing the Y2K Issue is estimated at approximately $5
million.

 .....To  date, no significant issues have arisen  from  the Y2K Issue.
In a related matter,  however,  the implementation of the integrated
Enterprise Resource Planning System at LINQ  in  1999 took longer to
implement, was more costly than  expected  and  resulted in some loss
of  business  during  the implementation stage.


<PAGE>


FORWARD LOOKING STATEMENTS

 .....The discussion of the Company's business and operations in this report
includes forward-looking statements within the meaning  of  Section  27A of
the  Securities  Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934,  as  amended,  which are based upon management's good
faith assumptions relating to the financial,  market,  operating, and other
relevant environments that will exist and affect the Company's business and
operations  in the future.  No assurance can be made that  the  assumptions
upon which management based its forward-looking statements will prove to be
correct, or that the Company's business and operations will not be affected
in any substantial  manner  by  other  factors not currently foreseeable by
management or beyond the Company's control.  All forward-looking statements
involve risks and uncertainties, including  those described in this report,
and such statements shall be deemed in the future  to  be modified in their
entirety by the Company's public pronouncements, including  those contained
in  all  future reports and other documents filed by the Company  with  the
Securities and Exchange Commission.


<PAGE>


ITEM 10 -  DIRECTORS AND OFFICERS OF REGISTRANT


 .....The names,  municipalities  of  residence and principal occupations of
the directors of the Corporation as of  the  date  hereof  and  the  period
during which each director has served as such are as follows:

DIRECTORS

<TABLE>
<CAPTION>
NAME AND                 PRINCIPAL OCCUPATION            DIRECTOR
MUNICIPALITY                                             SINCE
OF RESIDENCE
<S><C>                         <C>                         <C>
</TABLE>

Richard H. Willett       Chairman of the Board,             1991
Philipsburg, Montana     President and Chief
				 Executive Officer of the
				 Corporation

Kim A. Marvin            Principal, American Industrial     2000
Denton, Maryland         Partners

Steven D. Tarino         Associate, American Industrial     2000
San Francisco            Partners
California

Kenneth J. Diekroeger    Principal, American Industrial     2000
San Francisco            Partners
California

Theodore C. Rogers       Partner, American Industrial       2000
New York, New York       Partners



 .....Each director was elected or appointed by the Shareholders on February
2,  2000  to  serve until the next annual meeting or until their successors
are duly elected  or  appointed  unless  he  shall resign his office or his
office  shall  become  vacant  by  death,  removal  or  other  cause.   The
Corporation does not have an executive committee.  The  Corporation  has an
Audit Committee whose members are Messrs. Kim A. Marvin, Theodore C. Rogers
and  Richard  H.  Willett.  The Corporation also has a Management Resources
and  Compensation Committee  whose  members  are  Messrs.  Kim  A.  Marvin,
Theodore C. Rogers and Richard H. Willett.



<PAGE>


OFFICERS

 .....The  following  table  sets forth information concerning the executive
officers of the Corporation or  others  who perform policy-making functions
for the registrant.

<TABLE>
<CAPTION>
NAME                    MUNICIPALITY       OFFICE AND
                        OF RESIDENCE       PRINCIPAL
                                           OCCUPATION
<S><C>                     <C>                    <C>
</TABLE>
Richard H. Willett      Philipsburg,       Chairman of the Board,
                        Montana            President, and Chief
                                           Executive Officer

Paul J. Bamatter        New Canaan,        Vice-President Finance
			      Connecticut	       and Chief Financial
							 Officer

Christopher L.          New Canaan,        President and Chief
Schaller                Connecticut        Executive Officer
							 of Textile Operations

Jay R. Tavormina        North Charleston,   President and Chief
		            South Carolina      Executive Officer
                                            of Polypropylene
                                            Operations

Alex Di Palma           Pointe-Claire,      Vice-President, Taxation
                        Quebec

C. Suzanne Crawford     Westmount,          Vice-President, Legal
                        Quebec              Affairs and Corporate
                                            Secretary

Antoinette Lapolla      Laval, Quebec       Vice-President, Treasurer



ITEM 11 - COMPENSATION OF DIRECTORS AND OFFICERS

 .....The aggregate amount of compensation  paid  by the Corporation and its
subsidiaries  to  their  officers and directors in 1999  was  approximately
US$9,322,000.  The aggregate amount set aside or accrued by the Corporation
and its subsidiaries in 1999  to  provide  pension,  retirement  or similar
benefits for directors and officers was approximately US$923,400.

STOCK OPTION PLAN

 .....The  Corporation  had  a  Stock  Option Plan (the "Option Plan") under
which  options  were  granted  to  key  employees   and  Directors  of  the
Corporation and its subsidiaries to purchase Subordinate  Voting  Shares of
the Corporation. The Option Plan was designed to motivate and encourage the
retention  of  high  performance  executive  officers  and  Directors.  The
selection  of  participants  and  the  number  of Subordinate Voting Shares
granted  to  a  participant  were  based  on  the participant's  degree  of
responsibility  and  was  determined  at the discretion  of  the  Board  of
Directors  of  the Corporation upon the recommendation  of  the  Management
Resources and Compensation Committee of the Board.

 .....On September  21,  1999,  the  Board  of  Directors  had  approved  an
amendment to options issued under the Option Plan to accelerate the vesting
of  all  unvested  stock  options  for  the purpose of allowing the holders
thereof to tender the Subordinate Voting Shares issued upon the exercise of
such options to the offer made by AIP resulting  in  the  AIP  Acquisition.
The  Board  of Directors had also approved the amendment of options  issued
under the Option  Plan  to  provide  for the termination of any unexercised
stock options remaining after AIP took  up  and  paid  for  the Subordinate
Voting  Shares  under the Offer.  On October 20, 1999 the Option  Plan  was
discontinued as all  the  options  were either exercised or terminated when
AIP took up and paid for the Subordinate Voting Shares under the Offer.

PENSION BENEFITS

 .....Consoltex  maintains  a  Canadian   Pension  Plan  for  its  executive
employees  (the  "Canadian  Pension  Plan")  which  is  a  registered  non-
contributory defined benefit plan.

 .....Consoltex maintains Supplemental Executive  Retirement Plans in Canada
and in the United States (the "Canadian SERP" and  the  "US  SERP")  for  a
select  group  of  senior officers to ensure proper retirement income.  The
pension benefits payable  under  the plans are integrated with the benefits
payable  under  the Canadian Pension  Plan  or  the  US  Pension  Plan,  as
applicable.

 .....Under the US SERP, a participant will received a benefit, inclusive of
the part of the US  Pension  Plan  to  which  the  employer contributes, if
applicable,  equal  to  2% of the annual average salary  in  the  last  two
complete  calendar  years'   prior  to  the  event  (retirement,  death  or
termination) for each year of complete years of service, to a maximum of 30
years.  Salary is defined as base salary plus bonus under the Corporation's
Annual Incentive Plan.

 .....Most of the Corporation's  direct  and  indirect  subsidiaries  in the
United States maintain a 401(k) Plan for its employees, including executive
officers  (collectively,  the  "US  Pension  Plan").   These are registered
contributory defined contribution plans.

 .....In 1997, the Board of Directors, acting upon the recommendation of the
Management Resources and Compensation Committee, approved the creation of a
Share Purchase Loan Program (the "Program") to encourage  greater long-term
share ownership by Directors and selected executives of the Corporation and
of  its  subsidiaries.  Under  the  Program,  the Corporation offered  full
recourse  interest  bearing  loans  to outside Directors  and  to  selected
employees  as  designated  by  the Management  Resources  and  Compensation
Committee.  On October 20, 1999  the Program was discontinued as all of the
shares held pursuant to the Program  were  tendered  to  the  Offer and the
loans were repaid.


MANAGEMENT INCENTIVE PLANS

 .....All  executive  officers  of the Company participate in the Management
Incentive Plan.  The purpose of  the  Plan  is  to  tie  each participating
manager's  compensation to the financial performance of the  Operations  of
the Company the manager works for.  Each eligible management position has a
target bonus based on level of responsibility. Annual financial performance
is determined  on  the  basis of a combination of profits and return on net
assets achieved, as compared to objectives.

 .....In  the  course of considering  strategic  alternatives  available  to
Consoltex culminating  in  the  AIP  Acquisition,  the  Board  of Directors
created  a  management  incentive  plan  known  as  the  "Shareholder Value
Enhancement Program" which entitled certain senior officers of Consoltex to
a  cash  payments  of either $180,000 or $90,000 if all of the  Subordinate
Voting Shares were sold  by  December  31,  1999.   The  payments were made
pursuant  to  the  Shareholder  Value  Enhancement  Program after  the  AIP
Acquisition.


DIRECTORS
 ..
 .....The  two  former  Vice-Chairman  of  the  Corporation   were   paid  a
predetermined   fee   totalling   $68,500  representing  six  months  total
compensation earned for 1998 pursuant  to  an  agreement  that such payment
would  be  made  if  they  ceased  to be directors as a result of  the  AIP
Acquisition.

<PAGE>


ITEM 12 - OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

 ..........None


ITEM 13 - INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

 ..........Not applicable


                                  PART II


ITEM 14 -  DESCRIPTION OF SECURITIES TO BE REGISTERED

 ...........Not applicable


                                 PART III


ITEM 15 -   DEFAULTS UPON SENIOR SECURITIES

 ............None


ITEM 16 - CHANGES IN SECURITIES AND  CHANGES  IN  SECURITY  FOR  REGISTERED
          SECURITIES

 ..........None

                                  PART IV


ITEM 17 - FINANCIAL STATEMENTS

 .........The Consolidated Financial Statements filed as part of this Form
20-F are contained on pages [ ] through [ ].


ITEM 18 - FINANCIAL STATEMENTS

 ..........Not applicable.



<PAGE>


ITEM 19 - FINANCIAL STATEMENTS AND EXHIBITS

 .....(a)  Financial Statements:

 ............Consoltex Group Inc., Audited Consolidated Financial Statements
 ............Auditors' Report
 ............Consolidated Balance Sheet
 ............Consolidated Statements of Earnings and Retained Earnings
 ............Consolidated Statements of Cash Flows
 ............Notes to Consolidated Financial Statements

 .....(b) Exhibits:

 ..........1.1. Articles of Continuance of Consoltex Inc. dated December 16,
               1999

 ..........1.2. By-laws of Consoltex Inc. dated February 7, 2000

 ..........1.3. Certificate of Change of Name of Consoltex Inc. dated
               January 3, 2000

 ..........1.4. North American Credit Facilities for Consoltex Group Inc.
               -Amended and Restated Credit Agreement dated October 25, 1999

 ..........1.5. North American Credit Facilities for Consoltex Group Inc.
               - Amendment No. 1 to the Amended and Restated CreditAgreement
               dated January 3, 2000

 ..........1.6..North American Credit Facilities for Consoltex Group Inc. -
               Amendment No. 2 to the Amended and Restated Credit Agreement
		   dated May 12, 2000

 ..........2.1..Offer Agreement between AIP and the Corporation dated
               September 9, 1999

 ..........2.2. Stockholders Agreement between AIP, the Corporation,
               LGBV, LGL and Trust dated September 9, 1999

 ..........2.3. Management Services Agreement between AIP and Consoltex
               (USA) Inc. dated October 20, 1999

 ..........2.4  Royalton Mexicana, S.A. de C.V. Stock Purchase Agreement
               dated February 26, 1999

 ..........2.5..Marino Technologies, Inc. Stock Purchase Agreement dated
               August 2, 1999

 ..........2.6..Atlas Bag Asset Purchase Agreement dated November 19, 1999



 ........All  other  Schedules  have been omitted because of the absence  of
discussions requiring them, or the  required information is included in the
Consolidated Financial Statements or Notes thereto.



<PAGE>




SIGNATURES

 ...Pursuant to the requirements of Section  12  of  the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements
of filing on Form 20-F and has duly caused this amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.


 .................................CONSOLTEX GROUP INC.


 ..................................Per:  /s/ C. Suzanne Crawford
 ........................................--------------------------
 ........................................C. Suzanne Crawford
 ........................................Vice-President, Legal Affairs
 ........................................and Corporate Secretary


Dated:  June 29, 2000

<PAGE>