Arctic Glacier Announces US$4.5 Million Expansion Of Newburgh, New York Facility

Incentives provided by state economic development program

WINNIPEG, October 28, 2004 – The Arctic Glacier Income Fund today announced a US$4.5 million expansion and conversion of its facility in Newburgh, New York. The project will see the current 12,500 square-foot distribution centre converted into a combined production and distribution facility totaling 26,100 square feet.

Construction will commence immediately, with initial production scheduled for April 2005. The plant will be designed to produce 380 tons of packaged ice daily to meet the growing requirements of the New York City market. Newburgh is located on the Hudson River, 80 km north of Manhattan.

"Arctic Glacier is committed to expanding markets for packaged ice in the northeastern United States and New York State in particular," said Robert Nagy, President and CEO of Arctic Glacier Inc., the Fund’s operating company. "Our evaluation of potential sites demanded a location within the key New York City market, with access to existing transportation corridors and a readily available employment base. The Newburgh site met all of our criteria."

Plant upgrades aimed at strengthening product quality will include new water treatment and product drying systems and a new heat-sealed packaging process.

Arctic Glacier acquired the Newburgh facility in connection with the March 2004 acquisition of the Leisure Time Ice division of A.T. Reynolds & Sons, Inc. of Kiamesha Lake, New York. Leisure Time Ice operated a production plant in Kiamesha Lake and distribution facilities in Newburgh and Raritan, New Jersey.

"The decision to invest in Newburgh was driven by a number of strategic and financial advantages," said Keith McMahon, Executive Vice President and CFO of Arctic Glacier Inc. "Its location in an area of high population density was particularly important. In addition, expanding the facility at Newburgh will allow Arctic Glacier to take advantage of synergies that can be achieved by combining production and distribution."

Mr. McMahon also noted the proactive support of state and local governments. "Development incentives offered through the New York Empire Zone were a significant factor in our decision to proceed with the Newburgh expansion."

The Empire Zone program offers tax incentives and benefits to attract new businesses and enable existing enterprises to expand and create more jobs.

Charles A. Gargano, Chairman of Empire State Development said, "Arctic Glacier’s decision to establish this manufacturing facility in Newburgh’s Empire Zone is an important example of how Governor Pataki’s policies and programs have helped provide companies with the right incentives to locate and flourish in our great state. Arctic Glacier will be creating 17 new jobs and retaining 10 existing jobs. This is good economic news for Newburgh and Orange County."

Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America under the brand name of Arctic Glacier® Premium Ice. Arctic Glacier operates 20 production plants and 35 distribution facilities across Canada and the central and northeastern United States servicing more than 40,000 retail accounts.

Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN. There are 23.3 million trust units outstanding.

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Contact Information

Robert Nagy, President & CEO or Keith McMahon, Executive Vice President & CFO of Arctic Glacier Inc.

Toll free: 1-888-573-9237 or logon at www.arcticglacier.com

The Toronto Stock Exchange does not approve or disapprove of the adequacy or accuracy of this release.