Avery Dennison Unveils Largest Coating Machine in Asia Pacific

GUANGZHOU, Guangdong, China – January 15, 2008 – Avery Dennison Corporation (NYSE:AVY), a global leader in pressure-sensitive labeling materials and labels and tags, today unveiled the largest coating machine in China at its Guangzhou facility, which represents a total investment of US$26 million.

The state-of-the-art coating equipment – which is over 100 meters long and produces pressure sensitive adhesive (PSA) label materials – will enable Avery Dennison to meet the expected tremendous growth in the Asia Pacific region during the next decade, further enhancing its leading position in the pressure sensitive labeling market. The coater brings Avery Dennison’s total investment in China to more than US$265 million during the last 13 years and it should exceed US$300 million by 2010.

“We fully expect China to continue to build on its phenomenal economic growth record of the last 20 years, spurred over the next few years by an unprecedented surge in its consumer market,” said Dean A. Scarborough, President and Chief Executive Officer. “The continuous increase in consumption in the emerging markets of Asia Pacific represents a great opportunity for Avery Dennison and its customers. The new coater will also enable Avery Dennison to expand our partnerships with our local customers, provide them with industry leading products and technology and give them the edge they need to successfully compete in this dynamic market.”

Avery Dennison currently has more than 20 manufacturing, distribution and sales operations in China. “The new coater facility in Guangzhou will help us better meet the ever-increasing quality and service needs of our customers in the region. We’ve installed the latest available technology to meet our customers’ and end users’ increased volume needs,” said John C. Quinn, Vice President and General Manager for the Roll Materials Group.

In 2007, the Pasadena, California-based company opened three major facilities in China. This Includes the Philip M. Neal Research Center, just outside of Shanghai, the first corporate research center it has built outside of the United States. It also opened major new manufacturing facilities for its Retail Information Services Group and its Specialty Tape business in Suzhou and Kunshan.

Avery Dennison also completed the acquisition of the global label and tag maker, Paxar, in June, 2007. Paxar has major facilities in Panyu and Hong Kong and brings Avery Dennison’s total employment in China to nearly 14,000, representing approximately 40% of its global workforce.

To show its support of its employees in China, Avery Dennison co-sponsored a float in the Tournament of Roses New Year's Day Parade in Pasadena, California, celebrating the Beijing 2008 Olympics. The float included more than 100 Chinese performers. The Tournament of Roses Parade is one of the largest parades in the world and is seen on television by hundreds of millions of viewers around the world.

The new coater will enable Avery Dennison to continue to be the leader in the production of more stable and consistent label materials at the Guangzhou facility, which was opened in 2000. The 16,000-square meters plant contains manufacturing, distribution, research and development and customer service functions. Nearly 300 staff members are working at the Guangzhou plant and the number is expected to grow by 15% in 2008.

“The new coater demonstrates our commitment to helping our customers grow their businesses,” said Dagang Li, Vice President and Managing Director for Roll Materials China. “The new coater will enable Avery Dennison and its Chinese converting customers to successfully compete in the highly competitive label manufacturing industry in China and Asia.”

Avery Dennison is the largest producer of pressure-sensitive label materials, tags and tickets for the retail apparel markets in China. Since 1995, the revenues have grown at a rate of greater than 20% annually a year in China, accounting for over half of the market share in pressure-sensitive materials in China. It has 20 facilities in China including Guangzhou, Nansha, Panyu, Shanghai, Kunshan, Suzhou, Tianjin, Chengdu, Fuzhou, Qingdao, and Hong Kong.

Background Information

Avery Dennison is a global leader in pressure-sensitive labeling materials, retail tag, ticketing and branding systems, and office products. Based in Pasadena, Calif., Avery Dennison is a FORTUNE 500 Company with 2006 sales of US$5.6 billion. Following the acquisition of Paxar in 2007, Avery Dennison employs more than 30,000 individuals in 51 countries worldwide, who develop, manufacture and market a wide range of products for both consumer and industrial markets. Products offered by Avery Dennison include: Fasson brand self-adhesive materials; Avery Dennison and Paxar brand products for the retail and apparel industries; Avery brand office products and graphics imaging media; specialty tapes, peel-and-stick postage stamps, and labels for a wide variety of automotive, industrial and durable goods applications.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

Certain information presented in this news release may constitute “forward-looking” statements. These statements and financial or other business targets are subject to certain risks and uncertainties. Actual results and trends may differ materially from historical or expected results depending on a variety of factors, including but not limited to fluctuations in cost and availability of raw materials; ability of the Company to achieve and sustain targeted cost reductions; foreign currency exchange rates; worldwide and local economic conditions; impact of competitive products and pricing; selling prices; impact of legal proceedings, including the European

Commission (“EC”), Canadian Department of Justice, and Australian Competition and Consumer Commission investigations, into industry competitive practices and any related proceedings or lawsuits pertaining to these investigations or to the subject matter thereof or of the recently concluded investigation by the U.S. Department of Justice (“DOJ”) (including purported class actions seeking treble damages for alleged unlawful competitive practices, and purported class actions related to alleged disclosure and fiduciary duty violations pertaining to alleged unlawful competitive practices, which were filed after the announcement of the DOJ investigation, as well as a likely fine by the EC in respect of certain employee misconduct in Europe); impact of potential violations of the U.S. Foreign Corrupt Practices Act based on issues in China; impact of epidemiological events on the economy and the Company’s customers and suppliers; successful integration of acquisitions; financial condition and inventory strategies of customers; timely development and market acceptance of new products; fluctuations in demand affecting sales to customers; and other matters referred to in the Company’s SEC filings.

The Company believes that the most significant risk factors that could affect its ability to achieve its stated financial expectations in the near-term include (1) potential adverse developments in legal proceedings and/or investigations, including possible fines, penalties, judgments or settlements; (2) the impact of economic conditions on underlying demand for the Company's products; (3) the impact of competitors’ actions, including expansion in key markets, product offerings and pricing; (4) the impact of changes in raw material and energy-related costs and associated changes in selling prices; and (5) the ability of the Company to achieve and sustain targeted cost reductions.

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