Press Release

Kraton Announces First Quarter 2006 Results
LTM Adjusted Bank Covenant EBITDA
Rises 27% to $123 Million
Cash Balance Improves $43 Million to $66 Million

HOUSTON, TX. – May 10, 2006 – Polymer Holdings LLC (Holdings), parent company of Kraton Polymers LLC (Kraton) announces its financial results for the first quarter 2006. Holdings’ Total Revenues for the quarter were $229.4 million compared to $207.2 million in the comparable period of 2005, an increase of 10.7%. This improvement was primarily driven by an increase in average selling prices and an increase in sales volume. Holdings’ Net Income for the quarter was $4.3 million, compared with $3.1 million in the comparable period of 2005.

Holdings’ Gross Profit for the first quarter increased $2.6 million or 5.2% to $52.4 million, as compared to $49.8 million in the comparable period of 2005. Gross profit as percentage of total revenue declined from 24.1% to 22.9% as cost increased at a higher percentage than revenue. Holdings ended the quarter with $66.4 million in cash and cash equivalents, an increase of $43.3 million from March 31, 2005.

Kraton, the operating subsidiary of Holdings had Net Income for the quarter of $6.5 million as compared with $5.0 million in the comparable period of 2005. At the end of the first quarter 2006, Last Twelve Months (LTM) Adjusted Bank Covenant EBITDA, a measure used to determine compliance with Kraton's debt covenants, totaled $122.9 million, an increase of $26.3 million from the comparable period of 2005. A reconciliation of Kraton’s EBITDA and Adjusted Bank Covenant EBITDA to Net Income or Net Loss, as applicable, is attached.

"Kraton delivered improved results in the first quarter 2006 – consistent with our expectations. Our pricing, cost and operational initiatives launched in the past continue to drive positive results despite persistently high monomer and energy cost. This year we are also pushing for strong growth globally and introducing a number of exciting new innovations. We are beginning to see success in these initiatives during the first quarter," said George B. Gregory, Chief Executive Officer and President.

First Quarter 2006 Highlights:

• First quarter 2006 vs. first quarter 2005 sales volumes increased approximately 2 kT to 76 kT.
• Inventory volumes dropped by 17 kT compared with March 31, 2005, however balances increased $6 MM due to inflation.
• New innovations announced in KRATON’s adhesives, sealants and coatings; and packaging and film business units.

Other Business Highlights:

Kraton announced plans to expand our presence in the Asia Pacific region. The investment plans include a multi-functional customer service center and a proprietary HSBC manufacturing plant.

Kraton also announced the availability of two new grades of Kraton G SBCs for TPE compounding applications in April.

• Kraton signed a contract for butadiene supply to our facility located in the United States.
• Holdings’ made a cash tender offer for any and all of the $150,000,000 outstanding aggregate principal amount at maturity 12.000% Senior Discount Notes.
• To fund the tender offer, Kraton launched an amendment to increase our senior secured credit facilities.

Mr. Gregory added, “Looking forward, while raw material costs and supply of selected raw materials continue to challenge us, we remain optimistic about our ability to manage through these challenges, to deliver value for our customers, to continue to grow our business, and to generate solid financial results."

Kraton has scheduled an investor and analyst conference call for Thursday, May 11, 2006 to discuss the results of today's earnings announcement. The call will begin at 2:00 p.m. central time, 3:00 p.m. eastern time. To listen to the conference call and view the slide presentation, which will be broadcast live over the Internet, go to First Quarter 2006 Earnings Presentation Webcast.  You may also listen to the analyst conference call by telephone by contacting the conference call operator 5-10 minutes prior to the scheduled start time and asking for the 'Earnings Conference Call'. US Dial-In #: (888)552-9483. International Dial-In #: 210-234-0009. For those unable to listen to the live call, a replay will be available 24 hours a day beginning at approximately 6:00 p.m. CT May 11th through 5:00 p.m. CT on May 25th. To hear a telephonic replay of the call, dial 800-337-6538 or 203-369-3798 for international callers. To hear a replay of the call over the Internet, please access Kraton’s website at www.Kraton.com.

Earnings Release and Tables

About Kraton

Kraton Polymers LLC is a premier, global specialty chemicals company and is the world’s largest producer of styrenic block copolymers (“SBCs”), a family of products whose chemistry was pioneered by Kraton over forty years ago. SBCs are highly-engineered synthetic elastomers, which enhance the performance of products by delivering a variety of attributes, including greater flexibility, resilience, strength, durability and processability. Kraton polymers are used in a wide range of applications including road and roofing materials, numerous consumer products (e.g., diapers, tool handles and toothbrushes), tapes, labels, medical applications, packaging, automotive and footwear products. Kraton has the leading position in nearly all of its core markets and is the only producer of SBCs with global manufacturing capability. Its production facilities are located in the United States, The Netherlands, Germany, France, Brazil, and Japan.

Polymer Holdings LLC is the parent company of Kraton Polymers LLC and has no material assets other than its investment in Kraton Polymers LLC.

Kraton, the Kraton logo and design, and “Giving Innovators their Edge” tagline are trademarks of Kraton Polymers LLC.

Forward Looking Statements

This press release includes “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “believes,” “expects,” “estimates,” “projects,” “may,” “will,” “intends,” “plans” or “anticipates,” or by discussions of strategy, plans or intentions.  In this press release, forward-looking information relates to covenant compliance, pricing trends, cost savings, production rates and other similar matters.  All forward-looking statements in this press release are made based on management’s current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements.  Among these factors are changes in overall economic conditions, the cyclical nature of the chemical industry, changes in demand for our products, changes in inventories at our customers and distributors, technological and product development risks, availability and cost of raw materials, competitors’ actions, pricing and gross margin pressures, loss of key customers, order cancellations or reduced bookings, the timing and cost of planned capital expenditures, changes in manufacturing yields, control of costs and expenses, significant litigation, risks associated with acquisitions and dispositions, risks associated with our substantial leverage and restrictive covenants in our debt agreements, risks associated with our international operations, the threat or occurrence of international armed conflict and terrorist activities both in the United States and internationally, risks and costs associated with increased and new regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act of 2002), and risks involving environmental or other governmental regulation. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.