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<CONFORMED-NAME>BALTEK CORP
<CIK>0000009442
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<CITY>NORTHVALE
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<FORMER-CONFORMED-NAME>HKL CORP
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<SEQUENCE>1
<FILENAME>form10k-42813_32502.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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



      For the Fiscal Year Ended                         Commission file number
          December 31, 2001                                     2-44764

                               BALTEK CORPORATION
             (Exact name of registrant as specified in its charter)

             Delaware                                        13-2646117
  (State or other jurisdiction of                         (I.R.S. Employer
  incorporation or organization)                         Identification No.)

            10 Fairway Court
              P.O. Box 195
          Northvale, New Jersey                                    07647
(Address of principal executive offices)                        (Zip Code)

                  Registrant's telephone number: (201) 767-1400

           Securities Registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $1.00 Par Value
                          -----------------------------
                                (Title of Class)


     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  preceding  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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

     The  aggregate  market value of the voting stock held by  nonaffiliates  on
March 8, 2002 amounted to $8,780,000.

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common  stock as of the latest  practicable  date,  March 8, 2002:  2,390,383
shares, Common Stock, $1.00 par value.

     Documents  incorporated by reference:  Portions of the  registrant's  proxy
statement  dated  April  26,  2002 for use in  connection  with its 2002  annual
meeting of stockholders  are incorporated by reference in Part II of this Annual
Report on Form 10-K to the extent set forth in items 10, 11 and 12 hereof.

<PAGE>


                                     PART I


Item 1.        BUSINESS

Principal Products

     The registrant and its subsidiaries  (hereinafter  collectively referred to
as the "Company") is a multinational  manufacturing and marketing  company.  The
Company  operates  in two  lines  of  business:  1)  supplying  core  materials,
primarily balsa wood and balsa wood products,  linear and  cross-linked PVC foam
products and non-woven polyester mat, and 2) seafood, including aquaculture, the
farming and  processing of shrimp,  and, for the first nine months of 2001, as a
seafood importer.  The foam and mat products,  together with the Company's balsa
products,  position  the  Company  as  a  complete  supplier  to  the  composite
structural  core market.  The core materials are typically used by the Company's
customers to manufacture a variety of products by laminating metal or fiberglass
reinforced plastic skins to both sides of the core material,  thereby creating a
sandwich structure. The products manufactured by the Company's customers include
fiberglass boats, aircraft cargo pallets, aircraft flooring,  fiberglass storage
and processing  tanks,  electrical  generating  equipment and fiberglass tub and
shower bottoms. Balsa lumber is used mostly by the hobby industry to manufacture
model airplanes.

     The Company  mills and sells graded and  finished  balsa lumber in standard
sizes and balsa wood strips and  blocks.  "Standard  sizes" of balsa  lumber are
measured in boardfeet  (12" x 12" x 1") for the English  system of measure or in
cubic meters for the metric system of measure.  Shipments to Europe  (except the
U.K.) and Japan are made in cubic  meters  while  shipments  to the U.S. and the
U.K. are in boardfeet.  The Company,  for production and  statistical  purposes,
converts all metric measurements into boardfeet,  thus the Company's  "standard"
is boardfeet. The Company also manufactures and sells custom-made bonded panels,
bonded  blocks  of  balsa  wood and a  flexible  balsa  wood  block  mat  called
"Contourkore(R)."  Glued-up balsa blocks are marketed in two ways.  Part is sold
directly  to  customers  in block or panel  form,  the balance is shipped to the
Company's factory in Northvale,  NJ for further  processing into Contourkore and
other products.

     The  Company's  mat products are imported from Holland and Japan and resold
without  further  manufacturing.  These products are marketed as "Coremat(R)" (a
registered  trademark  of  Lantor  BV) and  "BaltekMat(R),"  principally  to the
pleasure boat industry.

     The Company is the sole North American source and nonexclusive  distributor
in Central and South America of Airex(R) (a registered  trademark of Alcan Airex
AG) and  Airlite(TM),  structural PVC foam products.  The foam is purchased from
Airex for further  processing  in the U.S.  and is sold to customers as rigid or
flexible panels in various thicknesses.

     The Company is also in the seafood business, including aquaculture and, for
the first nine months of 2001, as a seafood importer.  The aquaculture business,
specifically shrimp farming in Ecuador,  South America,  consists of a hatchery,
two farms and a packing plant. Shrimp larvae are supplied by the hatchery to the
farms,  and after  harvest,  transferred to the packing plant for processing and
shipment.  The Company  supplies  frozen  blocks that are purchased in wholesale
quantities by importers and/or large  processors.  Typically these companies buy
container  loads of shrimp and then  either  distribute  them to other  users or
process and redistribute them as cooked, breaded or repacked products.  They are
sold  under  their  own brand  names  and to a very  large  network  of  smaller
specialized users and retailers (supermarkets,  restaurants, etc.). The Company,
for the  first  nine  months  of 2001,  also  operated  as a  seafood  importer,
purchasing various types of seafood products such as shrimp,  salmon and lobster
from independent  producers located  throughout the world as well as shrimp from
the Company's own farms.  During the third quarter of 2001, the Company  decided
to terminate its seafood import business.  In September 2001, the Company signed
an  agreement  with


<PAGE>


National Fish and Seafood,  Inc. ("NFS"). The agreement provided that NFS assist
the Company in selling its  inventory  to third  parties.  By December 31, 2001,
substantially all of the inventory was sold. The final inventory quantities were
sold in March 2002.

     Substantially all of the Company's balsa and all of its shrimp are produced
in Ecuador. The Company also receives small quantities of balsa from other Latin
American  countries.  The  dependence  on foreign  countries  for raw  materials
represents some inherent risks.  However, the Company, or its predecessors,  has
operated  without  interruption in Ecuador since 1940.  Operating in Ecuador has
enabled  the  Company  to  produce  raw  materials  at a  reasonable  cost in an
atmosphere that has been favorable to exporters such as the Company. To mitigate
the risk of  operating  in  Ecuador,  in 1999 the  Company  obtained a five-year
expropriation  insurance  policy.  This policy provides the Company coverage for
its assets in Ecuador against  expropriatory  conduct (as defined in the policy)
by the government of Ecuador.  The amount of the recoverable loss is governed by
the terms of the policy.


Principal Markets and Methods of Distribution

     The Company's balsa products are sold throughout the United States, Canada,
Europe,  Japan,  Australia and Latin  America to  approximately  1,600  ultimate
users.  The foam and mat  products  are sold  primarily  in North  America.  The
Company's  salesmen  are  used  extensively  in the  sale of its  core  material
products.  The Company  makes  approximately  30% of its domestic  core material
product sales directly.  The remainder of the sales is handled through  regional
distributors in the United States,  Europe, Canada and the Pacific Rim. Sales of
Contourkore to customers outside the United States are handled through a wholly-
owned Foreign Sales Corporation.

     For the years ended December 31, 2001 and 2000,  approximately 54% and 61%,
respectively,  of the shrimp  production  was sold to the European  market;  the
balance was sold to the U.S. and Canadian markets.

Competitive Conditions

     As  part  of  their  overall  business,  other  companies,  with  aggregate
facilities  and  financial  resources  substantially  greater  than those of the
Company,  manufacture and sell various natural and synthetic products for nearly
all the purposes for which balsa, foam and mat products are sold by the Company.
Some of these  competitive  products are produced and sold at a lower price than
the Company's products,  and sales of these competing products are substantially
greater than the Company's sales of core materials.

     In North  America  and Europe,  the Company  also  directly  competes  with
companies,  some with greater  resources than the Company,  that manufacture and
sell balsa and foam  products at prices which may be lower than those offered by
the Company.

     The Company's  shrimp business  competes against many larger companies that
produce shrimp through similar methods, in addition to fishing for shrimp in the
traditional method of trawling.

<PAGE>


Material Customer

     No customer accounted for more than 10% of revenues in 2001, 2000 or 1999.

Backlog

     As of  December  31,  2001 and 2000,  the  Company  had a backlog of orders
believed to be firm in the amounts of $7,415,000 and  $9,071,000,  respectively.
The 2001 backlog is reasonably  expected to be filled within the current  fiscal
year.

Sources and Availability of Raw Materials

     The  Company  acquires,  partly  from its own  plantations  and partly from
others,  substantially  all of its balsa wood from  western and coastal  Ecuador
accessible by roads, so that the balsa lumber can be transported by truck to its
sawmills. The Company presently considers the timber standing in this area to be
ample to supply all the Company's  requirements in the foreseeable  future.  The
Company may, however, make periodic purchases of land to supplement its existing
plantations  and provide for future  growth.  The Company  also  receives  small
quantities  of balsa  from other  Latin  American  countries.  The  Company  has
experienced  no  difficulties  in  purchasing  its  foam and mat  materials  and
anticipates that the manufacturers  will be able to produce adequate  quantities
to meet demand. The resins, fiberglass and other materials used in the Company's
manufacturing processes are available from numerous commercial sources. To date,
the Company has experienced no difficulty in obtaining such materials needed for
its operations.

     The Company owns and  operates  two shrimp  farms and a shrimp  hatchery in
Ecuador for the  production of shrimp.  The  Company's  production of shrimp has
been  negatively  effected by the "White Spot" virus in 1999, 2000 and 2001. The
hatchery supplies  substantially all the larvae required by the Company's ponds.
The  Company  also owns a shrimp  packing  plant in Ecuador,  thereby  achieving
complete vertical integration of the shrimp business.

Patents, Trademarks and Licenses

     The Company features its registered  trademark  "Belcobalsa(R)" for lumber,
dimension  stock, and bonded panels and blocks,  "Contourkore(R)",  "LamPrep(R)"
and  "AL-600/10(R)"  for the  flexible  wood block mat,  "Durakore(R)",  a balsa
hardwood  composite,  "D100(R)" for rigid end-grain  panels and  "Decolite(R)" a
balsa  composite  panel  used as an  alternative  to  plywood,  and  low-density
laminate bulkers, marketed as "BaltekMat(R)".

     The  Company  also  features   "Airlite(TM)",   a  cross-linked  PVC  foam,
"AIREX(R)"(registered  trademark  of  Alusuisse  Airex  AG),  a linear  foam and
"Coremat(R)", also a low-density laminate bulker.


<PAGE>


Estimated Research Costs

     The Company has incurred  approximately  $665,000  during 2001 for research
and  development,  compared to  expenditures of $565,000 in 2000 and $597,000 in
1999. All  expenditures are related to the core materials  segment.  The Company
continues to actively  explore  possible new  applications of its core materials
and new processes to improve the manufacturing of those products.

Environmental Impact

     The  Company  has   experienced   no  material   impact  upon  its  capital
expenditures,  earnings or  competitive  position as a result of its  compliance
with  federal,  state or local  provisions  relating  to the  protection  of the
environment.  Balsa  is not a  rainforest  species,  nor  does  it  grow  in the
rainforest.  It is usually  harvested  within five  years.  The fast growth rate
makes balsa similar to short-cycle  agricultural crops and an ideal tree species
for forest plantations.

Employees

     The Company has 965 employees in Ecuador,  174 in the United States,  13 in
Europe and one each in Japan and Uruguay, aggregating 1,154 employees.

Seasonality

     The Company's business is not seasonal.


<PAGE>


Classes of Products

     The  following  table sets forth the  amount  and  percentage  of net sales
represented by each of the Company's  product classes in each of the three years
in the period ended December 31, 2001 (dollars in thousands):




                   Year         Core Materials       Seafood       Total
                   2001              $57,871         $20,197      $78,068
                                          74%             26%         100%
                   2000              $63,175         $25,885      $89,060
                                          71%             29%         100%
                   1999              $58,938         $27,089      $86,027
                                          69%             31%         100%

Segment Information

     The Company is engaged in two lines of business,  that of manufacturing and
supplying products which are used principally as the structural core material in
composite applications in various industries,  and in the seafood business, as a
shrimp  producer in Ecuador and, for the first nine months of 2001, as a seafood
importer.

     Reference is made to the  information  set forth in Note 11 to the Notes to
Consolidated  Financial  Statements,  Part II,  Item 8 hereof,  with  respect to
assets and operating results for different business segments.

Foreign Operations

     The Company,  through its Ecuadorian  subsidiaries,  owns and operates five
woodworking plants and approximately  16,089 acres of forestland in Ecuador.  In
addition,  the Company owns and operates two shrimp farms on approximately 2,300
acres, a shrimp hatchery and a shrimp packing plant.

     At the Company's  woodworking  plants,  rough balsa lumber is received from
plantations or independent  loggers and then processed into finished  lumber and
other manufactured products.

     The  Company's  shrimp  ponds  are  stocked  with  larvae.  After  feeding,
controlling  the pond  environment and monitoring the growth of the shrimp for a
period of approximately 18 weeks the shrimp are harvested, frozen, packed and
sold for export.

     The Company operates sales offices in France, the United Kingdom,  Denmark,
Japan and Uruguay.

     Reference is made to the  information  set forth in Note 11 to the Notes to
Consolidated  Financial  Statements,  Part II,  Item 8 hereof,  with  respect to
assets and operating results by geographic areas.

     No  prediction  can be made as to any future  increase  or  decrease of the
Company's  foreign  business.   The  Company  has  experienced   differences  in
profitability  between  foreign and domestic  sales due to the changing value of
the U.S.  dollar in relation to the foreign  currencies  of countries  where its
products are sold.


<PAGE>


Item 2.        PROPERTIES

The Company owns or leases the properties indicated in the following table:
<TABLE>
<CAPTION>

                          Property and Location                                Status

<S>                                                                           <C>
One-story concrete and steel building  containing the Company's principal      Leased
U.S.  manufacturing  plant  and  warehouse  space,  approximately  85,000
square feet on 4-1/2 acres. (Northvale, New Jersey)

Two-story concrete and steel building  containing the Company's principal      Leased
offices,  manufacturing plant and warehouse space,  approximately  80,000
square feet. (Northvale, New Jersey)

Approximately  70,000  square  feet  containing  research   laboratories,      Leased
warehouse  and office space in two  buildings.  (Norwood  and  Northvale,
New Jersey)

Woodworking  plant housed in several wood,  concrete and steel buildings,      Owned
approximately 180,000 square feet.  (Guayaquil, Ecuador)

Woodworking  plant housed in several wood,  concrete and steel buildings,      Owned
approximately  30,000  square  feet  on  7  acres  of  land.  (Guayaquil,
Ecuador)

16,089 acres of timberland in Ecuador.                                         Owned

1,800  acres of land for shrimp  farming in  Ecuador,  including  10 wood      Owned
buildings and one concrete building totaling  approximately 11,000 square
feet.

444 acres of land for shrimp  farming in  Ecuador,  including  4 concrete      Leased
buildings and 4 wood buildings totaling 4,357 square feet.

Shrimp  hatchery  housed in several  concrete  buildings  on 3.7 acres of      Owned
land.  (San Pablo, Ecuador)

Shrimp packing plant housed in three concrete and steel  buildings on 2.6      Owned
acres of land.  (Duran, Ecuador)

Woodworking  plant housed in four concrete and steel  buildings,  165,000      Owned
square  feet on  approximately  28 acres of land.  (Santo  Domingo de los
Colorados, Ecuador)

Woodworking  plant housed in four  concrete and steel  buildings,  62,000      Owned
square feet on approximately 7 acres of land.  (Manta, Ecuador)

Woodworking  plant  housed in one wood  building,  26,000  square feet on      Owned
approximately 8 acres of land.  (Quevedo, Ecuador)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                           <C>
Maintenance  facilities  for  the  Balsa  Raw  Material  Department  in a      Owned
concrete and wood building, 16,875 square feet.  (Quevedo, Ecuador)

Apartment space in concrete  building,  approximately  1,450 square feet.      Owned
(Quevedo, Ecuador)

Office  space  in  concrete  building,  8,489  square  feet.  (Guayaquil,      Owned
Ecuador)

Office space in concrete building, 1,000 square feet.  (Croydon, U.K.)         Leased

Office  space in stone and wood  building,  2,000  square  feet.  (Paris,      Leased
France)

</TABLE>

     All of the above properties,  except the shrimp farming land,  hatchery and
packing plant are used in the core materials business.

     All of the Company's properties,  plants and equipment are considered to be
presently sufficient for their respective purposes.

Item 3.        LEGAL PROCEEDINGS

        Not applicable.

Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There was no submission of matters to a vote of security holders during the
fourth quarter of 2001.

                                     PART II

Item 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS

     The Company's  Common Stock is traded on the Nasdaq  National  Market under
the Symbol: BTEK. The following is the range of high and low prices for the last
two years.

                                       2001                          2000
                                --------------------          ------------------
                                    HIGH        LOW               HIGH       LOW
                                    ----        ---               ----       ---

1st Quarter                       $ 8.38     $ 7.00             $ 8.75    $ 7.31
2nd Quarter                         8.63       7.58               7.88      6.38
3rd Quarter                         8.63       7.48               7.38      6.50
4th Quarter                         8.00       6.50               7.75      6.75


The Company had approximately 111 stockholders of record as of March 8, 2002.

     No cash  dividends  were paid during the past two years in the period ended
December 31, 2001.

<PAGE>


Item 6.        SELECTED FINANCIAL DATA

(Dollars in thousands except per share amounts)
YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>

                                    2001        2000        1999        1998        1997
                                    ----        ----        ----        ----        ----
<S>                              <C>           <C>        <C>          <C>        <C>
Net sales                        $78,068       $89,060    $86,027      $67,695    $56,140

Net income                         1,582         2,882      2,816        3,259      1,841

Earnings per common share           0.64          1.14       1.12         1.29        .73

Total assets                      55,782        57,531     52,905       46,077     41,755

Long-term obligations                302           128        591        1,581      3,015

Cash  dividends  declared per
     common share                     --            --         --           --         --

Average shares outstanding     2,468,472     2,523,261  2,523,261    2,523,261  2,523,261

</TABLE>


Item 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's  discussion  and  analysis of  financial  condition  and results of
operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United  States  of  America.   The  preparation  of  these  statements  requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities.  On an ongoing basis, management evaluates its estimates
and judgements,  including those related to revenue  recognition,  allowance for
doubtful accounts,  inventories,  income taxes,  impairment of long-lived assets
and  contingencies.  Management bases its estimates and judgements on historical
experience and on various other factors that are believed to be reasonable under
the  circumstances,  the  results of which form the basis for making  judgements
about the carrying value of assets and liabilities that are not readily apparent
from other  sources.  Actual  results  may differ  from  these  estimates  under
different assumptions or conditions.

Management   believes  the  following   accounting  policies  involve  its  more
significant judgements and estimates used in the preparation of its consolidated
financial  statements.  Baltek  maintains  allowance  for doubtful  accounts for
estimated  losses resulting from the inability of its customers to make required
payments.  If  the  financial  condition  of the  Company's  customers  were  to
deteriorate,  resulting  in an  impairment  of their  ability to make  payments,
additional  allowances  may be required.  The Company  adjusts its inventory for
estimated  obsolescence or unmarketable  inventory based upon assumptions  about
future  demand  and  market  conditions.  If  actual  future  demand  or  market
conditions  are less favorable  than those  projected by management,  additional
inventory  write-downs may be required.  To estimate the  recoverability  of the
Company's  property and equipment,  management must make  assumptions  regarding
estimated  future  cash flows and other  factors to  determine  the value of the
assets. If these estimates or their related  assumptions change, the Company may
be  required to record  impairment  charges not  previously  recorded  for these
assets.  Deferred  tax  assets  and  liabilities  are  determined  based  on the
difference  between the  financial  statement and income tax bases of assets and
liabilities and  carryforwards  using currently  enacted tax rates.  The Company
estimates its tax valuation allowance by assessing the future  recoverability of
the deferred tax assets.  The allowance is based on estimates of taxable  income
in each  jurisdiction  the Company operates and the period over which the assets
will be  recoverable.  In the  event  that  actual  results  differ  from  those
estimates, the Company may need to establish additional valuation allowances.


LIQUIDITY AND CAPITAL RESOURCES

The primary  sources of  liquidity  historically  have been and are  expected to
continue to be cash flow  generated  from  operations  and available  borrowings
under short-term lines of credit.  The Company increased its borrowing  capacity
under its domestic line of credit to $16.5 million in January 2001.  The Company
also  continues  to  have  lines  of  credit  in  Ecuador  and  Europe  totaling
approximately $4.7 million. In September 2001, the Company utilized a portion of
its  equipment  line of credit to finance the  previous  purchase of $370,000 of
equipment.   Future  capital  expenditures  are  expected  to  be  funded  by  a
combination  of  cash  generated  from  operations  and  outside  financing,  if
necessary.

In September  2001,  the Company  decided to exit the seafood  import  business.
Primarily as a result of that decision, borrowing requirements were lower in the
fourth quarter  compared to peak levels earlier in the year. It is expected that
average borrowings in 2002 will be lower than 2001.

The Company  believes its financial  position  remains  strong.  At December 31,
2001, the Company had working capital of $16.8 million compared to $16.6 million
at December 31, 2000.  Cash was provided and

<PAGE>


used in varying amounts during the two-year  period,  principally as a result of
changes in the  elements of current  assets and current  liabilities  and in the
amount of cash  provided  by net income.  Inventories  and  accounts  receivable
increased  in 2000  due to the  Company's  expansion  into  the  seafood  import
business and decreased in 2001 as a result of the exit from that  business.  The
Company's short-term borrowings decreased in 2001.

Cash  used  in  investing  activities  for  the  three-year  period  was  due to
investments in balsa plantations, purchases of new equipment and the replacement
of old  equipment.  At this time the  Company has no  material  commitments  for
capital expenditures.

At December  31, 2001,  the Company had unused lines of credit of  approximately
$9.8 million with a domestic bank,  approximately  $2.0 million with  Ecuadorian
banks and  approximately  $0.5 million with European  banks for working  capital
purposes.  The Company  expects that future  operations  and its unused lines of
credit will provide  sufficient  resources to support its planned  expansion and
maintain its favorable liquid position.


RESULTS OF OPERATIONS FOR THE YEARS
ENDED DECEMBER 31, 2001, 2000 AND 1999

Total sales decreased 12% in 2001 and increased 4% in 2000. The decrease in 2001
is due to lower core material and seafood  sales.  The gains in 2000 were due to
increased core materials sales and higher seafood sales.

Core material sales were $57,871,000,  $63,175,000 and $58,938,000 in 2001, 2000
and 1999, respectively. Domestic sales were lower in 2001 compared to 2000. This
reduction  was  partly  offset  by a strong  increase  in sales in  Europe.  The
reduction in domestic sales was primarily due to lower demand from the Company's
largest end user group, the boating industry.  According to published reports in
the industry,  wholesale boat shipments in the domestic marine market  decreased
by 20 percent or more for the year. The increase in European sales resulted from
higher shipments to manufacturers of windmill blades. Revenues increased in 2000
due to strong demand in many  industries,  including the boating  industry.  The
generally  robust  economy  during 2000 resulted in strong demand in the boating
industry.

Many of the Company's end user markets,  including boating, are highly cyclical.
Demand  within  those   industries  is  dependent  upon,  among  other  factors,
discretionary  income,  inflation,   interest  rates  and  consumer  confidence.
Fluctuating  interest  rates and other  changes in economic  conditions  make it
difficult to forecast short or long range trends.

Management  believes that the Company's revenues for the year ended December 31,
2001  were  negatively  affected  by  the  fluctuation  of  foreign  currencies,
particularly those of its European subsidiaries, compared to the U.S. dollar.

Seafood sales were  $20,197,000,  $25,885,000  and $27,089,000 in 2001, 2000 and
1999, respectively.  Management believes that the decrease in 2001 is due to: 1)
lower  demand  in the  entire  seafood  industry,  2)  production  levels at the
Company's  shrimp farms and 3) the  Company's  decision to terminate its seafood
import  business  during  the third  quarter of 2001.  A downturn  in the entire
seafood industry negatively affected prices for many seafood products, including
shrimp  produced at the farms and  products  sold through the  Company's  import
subsidiary.  Unfavorable  economic  conditions in the U.S. and Japan during 2001
resulted in lower  consumption and therefore lesser demand for seafood products.
The White Spot virus continued to affect the shrimp farms negatively,  resulting
in lower production and revenues  compared to historical  levels.  The amount of
shrimp  produced at the Company's  farms in 2001 was  approximately  the same as
2000;  production  in 2000  declined by 62% compared to 1999 and 66% compared to
1998.  The

<PAGE>


decrease in revenues in 2000 was the result of a significant decline in sales of
shrimp,  partially  offset  by  improved  sales  of  seafood  products  from the
Company's import business.

During the third quarter of 2001,  the Company  decided to terminate its seafood
import  business.  As a result,  revenues  in the  fourth  quarter  of 2001 were
significantly  lower than the  comparable  period in 2000 and are expected to be
significantly lower in 2002 compared to 2001.

The overall gross margin as a percentage of sales increased slightly in 2001 and
remained the same in 2000 compared to 1999. It is the Company's  experience that
the typical margin in the seafood  import  business is lower than its historical
margins realized as a core materials  producer/distributor  and shrimp producer.
The  overall  margin is  therefore  determined  not only by the  margins in each
segment but also by the mix of seafood and core material  sales.  The margin for
the Company's core products  decreased in 2001 and improved in 2000. The margins
decreased in 2001 due primarily to higher costs in Ecuador. The margins improved
in 2000 due to the one-time  benefit  realized from the devaluation of the sucre
when Ecuador  converted its national  currency to the U.S.  dollar.  The margins
from seafood sales decreased in 2001 and 2000 because of the continuing  effects
of the White Spot virus and a decline in  commodity  selling  prices for seafood
products.  Subsequent to its decision to terminate the seafood import  business,
the Company  recorded  losses of  approximately  $316,000 upon the sale or final
disposition of the seafood import inventory.

Selling,  general and administrative  expenses ("SG&A") as a percentage of sales
increased in 2001 and 2000. The seafood import  business has a lower  percentage
of SG&A  expenses  to  revenues as  compared  to the  Company's  core  materials
segment. The overall percentage is therefore influenced by the amount of SG&A in
each  segment  and the  relationship  of each  segment's  revenues  and  SG&A to
aggregate amounts.  In dollar terms, SG&A expenses increased in 2001 as a result
of increases in commercial insurance,  medical insurance and expenses related to
the closure of the seafood import  business.  "SG&A" expenses  increased in 2000
primarily as a result of increases in selling expenses.

Sales and expenses were  affected in all three years by the  different  exchange
rates  applied in  remeasuring  the books of accounts of the  Company's  foreign
subsidiaries.

Interest expense increased in 2001 and decreased in 2000. The average borrowings
were higher in 2001 compared to 2000. The interest rates on U.S. dollar loans in
Ecuador were lower and average  rates in the U.S. were lower in 2001 compared to
2000. In both periods,  interest  rates on dollar  denominated  loans in Ecuador
were  significantly  higher than rates  available  to the Company in the U.S. In
2000,  the  Company's  short-term  borrowings  for working  capital  purposes in
Ecuador were primarily U.S. dollar  denominated  loans.  The Company's  interest
rate on U.S. loans was higher in 2000 and its average  borrowings  were lower in
2000 as compared to 1999.  The level of  borrowing  in all periods is related to
the Company's working capital needs and cash flows generated from operations.

The  Company  had a  foreign  exchange  gain of  $53,000  in 2001 and  losses of
$328,000 and $336,000 in 2000 and 1999,  respectively.  Remeasurement  gains and
losses are mainly caused by the  relationship  of the U.S. dollar to the foreign
currencies  in  the  countries  where  the  Company  operates,  and  arise  when
remeasuring  foreign  currency  balance  sheets into U.S.  dollars.  The Company
utilizes foreign exchange contracts to hedge certain inventory purchases and may
also employ certain  strategies  whose  objective is to reduce earnings and cash
flow volatility  associated with foreign exchange rate changes.  The Company has
not and  does not  intend  to  enter  into  foreign  currency  transactions  for
speculative   purposes.   Management   is  unable  to  forecast  the  impact  of
remeasurement  gains or losses on future periods due to the  unpredictability in
the fluctuation of foreign exchange.

The effective  income tax rate  amounted to 32% in 2001,  37% in 2000 and 27% in
1999.  Reconciliation  of the  effective  rate with the U.S.  statutory  rate is
detailed in Note 8 to the Notes to Consolidated Financial Statements.

<PAGE>


New Accounting Pronouncements

In October 2001,  the Financial  Accounting  Standards  Board  ("FASB"),  issued
Statement of Financial Accounting Standard ("SFAS") No. 144, "Accounting for the
Impairment  or  Disposal  of  Long-Lived   Assets,"  which  addresses  financial
accounting and reporting for  long-lived  assets.  The Company  expects to adopt
this  Standard  during the first  quarter of fiscal  2002.  Management  does not
believe that the adoption of this  standard  will have a material  impact on the
Company's financial position or results of operations.

                                    * * * * *

Forward Looking Statements - Cautionary Factors

The  foregoing  discussion  and  analysis  contains  forward-looking  statements
regarding the Company.  Because such statements include risks and uncertainties,
actual  results may differ  materially  from those  expressed or implied by such
forward-looking  statements.  Factors that could cause actual  results to differ
materially  include,  but are not limited to, economic  conditions in the United
States, Europe and Ecuador that affect relative interest rates, foreign exchange
rates and other costs and prices related to the Company's business.


<PAGE>


Item 7a.       QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to various market risks,  including  changes in commodity
prices,  foreign  currency  fluctuations  and  interest  rates.  To  manage  the
volatility  associated with foreign currency  purchases of materials  created in
the normal  course of  business  the  Company  enters  into a limited  number of
derivative hedging transactions.

The majority of the Company's  working  capital  borrowings at December 31, 2001
were subject to variable  interest rates.  The Company entered into two interest
rate swaps in 2001 to manage a portion of its exposure to fixed versus  floating
interest  rates.  The Company's  policy is to use foreign  currency and interest
rate derivative  instruments to the extent  necessary to manage  exposures.  The
Company does not hold or issue derivative financial  instruments for speculative
purposes.

For quantitative  disclosure regarding the Company's derivative  instruments see
Note 12 to the Consolidated Financial Statements.


Item 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  consolidated  financial  statements of the registrant and  subsidiaries and
supplemental schedule are annexed hereto and made part hereof.

Item 9.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE

None.

<PAGE>

                                    PART III


Item 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Omitted from this Report since a definitive  Proxy  Statement,  pursuant to
Regulation  14A,  containing  the required  information,  will be filed with the
Commission not later than 120 days after the close of registrant's fiscal year.

Item 11.       EXECUTIVE COMPENSATION

     Omitted from this Report since a definitive  Proxy  Statement,  pursuant to
Regulation  14A,  containing  the required  information,  will be filed with the
Commission not later than 120 days after the close of registrant's fiscal year.

Item 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT

     Omitted from this Report since a definitive  Proxy  Statement,  pursuant to
Regulation  14A,  containing  the required  information,  will be filed with the
Commission not later than 120 days after the close of registrant's fiscal year.

Item 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Inapplicable.

<PAGE>


                                     PART IV

Item 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
               FORM 8-K

(a)(1) and (2) Consolidated  Financial  Statements  and  Financial  Statement
               Schedule

               See Index to  Consolidated  Financial  Statements  and  Financial
               Statement Schedule annexed hereto and made part hereof.

(b)            Reports on Form 8-K

               No  reports  on  Form  8-K  were  filed  by or on  behalf  of the
               registrant  for the quarter  ended  December 31,  2001,  the last
               quarter in the period covered by this Annual Report on Form 10-K.

<PAGE>


                                  EXHIBIT INDEX



     3.2 Articles of Incorporation (By-laws), filed as Exhibit 3.2 to
Registration Statement on Form S-1(Reg. No. 2-44764) is incorporated herein by
reference.

     10.1 Revolving Loan and Security Agreement between the Company and Summit
Bank, dated December 21, 1999 (incorporated by reference to the Company's annual
report on Form 10-K for the year ended December 31, 1999).

     10.1.1 First Amendment to Revolving Loan and Security Agreement dated
September 30, 2000 between Baltek Corporation and Crustacea Corporation,
collectively, as Borrower, and Summit Bank, as Lender (incorporated by reference
to the Company's quarterly report on Form 10-Q for the quarter ended September
30, 2000).

     10.1.2 Substitute Revolving Credit Note dated September 30, 2000 between
Baltek Corporation and Crustacea Corporation, collectively, as Borrower, and
Summit Bank, as Lender (incorporated by reference to the Company's quarterly
report on Form 10-Q for the quarter ended September 30, 2000).

     10.1.3 Second Amendment to Revolving Loan and Security Agreement dated
December 31, 2000 between Baltek Corporation and Crustacea Corporation,
collectively, as Borrower, and Summit Bank, as Lender (incorporated by reference
to the Company's annual report on Form 10-K for the year ended December 31,
2000).

     10.1.4 Second Substitute Revolving Credit Note dated December 31, 2000
between Baltek Corporation and Crustacea Corporation, collectively, as Borrower,
and Summit Bank, as Lender (incorporated by reference to the Company's annual
report on Form 10-K for the year ended December 31, 2000).

     10.1.5 Third Amendment to Revolving Loan and Security Agreement dated
September 28, 2001 between Baltek Corporation and Crustacea Corporation,
collectively, as Borrower, and Fleet National Bank, as Lender. *

     10.2 Lease Agreement dated September 18, 2000 between the Company, as
Tenant, and Edro Associates, as Landlord (incorporated by reference to the
Company's quarterly report on Form 10-Q for the quarter ended September 30,
2000).

     10.3 Amendment to Lease dated August 17, 2000 between the Company, as
Tenant, and Northvale 1997 Associates, L.L.C., as Landlord (incorporated by
reference to the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 2000).

     10.4 Executive Employment Agreement dated June 1, 2000 between the Company
and Ronald Tassello (incorporated by reference to the Company's quarterly report
on Form 10-Q for the quarter ended September 30, 2000).

     10.5 Executive Employment Agreement dated June 1, 2000 between the Company
and Thomas Preisel (incorporated by reference to the Company's quarterly report
on Form 10-Q for the quarter ended September 30, 2000).

<PAGE>



     10.6 Executive Employment Agreement dated June 1, 2000 between the Company
and Antonio R. Diaz (incorporated by reference to the Company's quarterly report
on Form 10-Q for the quarter ended September 30, 2000).

     10.7 Agreement dated March 5, 2001 between the Company and Jacques Kohn,
Jean Kohn and Bernard Kohn (incorporated by reference to the Company's annual
report on Form 10-K for the year ended December 31, 2000).

     10.8 Executive Employment Agreement dated May 1, 2001 between the Company
and Antonio L. Diaz *

     10.9 Executive Employment Agreement dated January 1, 2002 between the
Company and Harold Gutmann *

     21 Subsidiaries *

                                * Filed herewith



<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 of 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                                    BALTEK CORPORATION
                                                        Registrant



                                           By  /s/ Jacques Kohn
                                              ------------------------
                                                 Jacques Kohn,
                                                 President
                                                 Director



                                           By  /s/ Ronald Tassello
                                              ------------------------
                                                 Ronald Tassello,
                                                 Chief Financial Officer and
                                                 Treasurer (Principal
                                                 Financial Officer and
                                                 Principal Accounting
                                                 Officer)

Dated:  March 29, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the date indicated:

By  /s/ Jacques Kohn                       By  /s/ Benson J. Zeikowitz
    ----------------------                     -----------------------
    Jacques Kohn,                             Benson J. Zeikowitz
    Director                                  Director

By  /s/ Margot W. Kohn                     By  /s/ William F. Nicklin
    ----------------------                     -----------------------
    Margot W. Kohn,                           William F. Nicklin
    Director                                  Director

By  /s/ Henri-Armand Kohn                  By  /s/ Jean J. Kohn
    ----------------------                     -----------------------
    Henri-Armand Kohn,                        Jean J. Kohn
    Director                                  Director

By  /s/ Bernard J. Wald
    ----------------------                     -----------------------
    Bernard J. Wald
    Director


Dated:  March 29, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1.5
<SEQUENCE>3
<FILENAME>exhibit10-1_5.txt
<TEXT>
            THIRD AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
Baltek

     THIS REVOLVING LOAN AND SECURITY AGREEMENT is dated as of September 28,
2001, and is by and among BALTEK CORPORATION, a Delaware corporation having its
principal executive offices at 10 Fairway Court, Northvale, New Jersey 07647
("Baltek") and CRUSTACEA CORPORATION,a Delaware corporation having its principal
executive offices at 106 Stonehurst Court, Northvale, New Jersey 07647
("Crustacea") (each a "Borrower" and collectively the "Borrowers") and FLEET
NATIONAL BANK, successor by merger to SUMMIT BANK, a banking institution of the
State of New Jersey having an office located at 250 Moore Street, Hackensack,
New Jersey 07602 (the "Bank").

                               W I T N E S S E T H
                               - - - - - - - - - -

     WHEREAS, the Borrowers and the Bank entered into a Revolving Loan and
Security Agreement dated as of December 21, 1999, as amended by virtue of a
certain First Amendment to Revolving Loan and Security Agreement dated as of
September 30, 2000, and as further amended by virtue of a certain Second
Amendment to Revolving Loan and Security Agreement dated as of December 31, 2000
(the "Loan Agreement") which Loan Agreement relates to a certain Revolving
Credit Note of even date with the Loan Agreement, which note was amended by
virtue of a certain Substitute Revolving Credit Note dated as of September 30,
2000 and a Second Substitute Revolving Credit Note dated as of December 31, 2000
(the "Note"); and

     WHEREAS pursuant to that certain Second Amendment to Loan and Security
Agreement executed by the Borrowers dated as of December 31, 2000, the Borrowers
were granted a certain Equipment Line of Credit in the amount of $1,000,000
Dollars (the "Line of Credit"), evidenced by an Equipment Line of Credit Note of
even date therewith; and

     WHEREAS the Line of Credit provides, among other things, that monies
borrowed pursuant thereto would be repayable by the Borrowers in the form of
interest only until the Maturity Date thereof (December 31, 2001), at which time
the amounts borrowed pursuant to the terms thereof would be converted to a term
note payable in sixty (60) equal consecutive monthly payments; and

     WHEREAS, the Borrowers wish to borrow, under the Line of Credit, Three
Hundred and Seventy Thousand ($370,000.00) Dollars to purchase certain machinery
and equipment; and

     WHEREAS the Borrowers wish to repay such monies over a term of five years,
in sixty (60) equal consecutive monthly payments commencing immediately; and

     WHEREAS the Bank is willing to grant the Borrowers such terms as set forth
in the Line of Credit, as modified hereby;

     NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:

     1. All of the terms and conditions of the Loan Agreement, as modified, and
Line of Creditt are hereby specifically incorporated into, and made part hereof.
In the event of an inconsistency between the terms of the Loan Agreement and
this agreement, the terms of this agreement will control.

     2. Definitions. Except as otherwise defined herein, terms defined in the
Loan Agreement shall have the same meaning when used herein.

     3. The definition of "Maturity Date" as set forth in the Line of Credit
Note is changed to mean September 28, 2001, and interest and principal payments
shall be due and payable commencing October 31, 2001, and shall be payable on
the last day of each month thereafter until September 28, 2006, when the total
unpaid principal and accrued interest shall be due and payable.



<PAGE>


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

ATTEST:                                 FLEET NATIONAL BANK, successor
                                          by merger to Summit Bank


By:/s/ Mae Wong                         By:/s/Richard Mady
------------------------------           ------------------------------------
                                             Name:Richard Mady
                                             Title:Senior VicePresident




ATTEST:                                 BALTEK CORPORATION



By:/s/Ronald Tassello                   By:/s/Jacques Kohn
------------------------------           ------------------------------------
                                           Name: Jacques Kohn
                                           Title:President


ATTEST:                                 CRUSTACEA CORPORATION



By:/s/Ronald Tassello                   By:/s/Jacques Kohn
------------------------------           ------------------------------------
                                           Name:Jacques Kohn
                                           Title: President




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>4
<FILENAME>exhibit10-8.txt
<TEXT>
                         EXECUTIVE EMPLOYMENT AGREEMENT

     EXECUTIVE EMPLOYMENT AGREEMENT made as of the 1st day of May, 2001, by and
between BALTEK CORPORATION, a Delaware corporation with offices at 10 Fairway
Court, Northvale, New Jersey 07647 (the "Company"), and Antonio L. Diaz,
residing at 122 Carrie Lane, Phoenixville, Pennsylvania 19460 (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Company desires to employ the Executive as Director for Latin
America, and the Executive desires to be so employed by the Company, upon the
terms and subject to the conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the Executive and the Company agree as follows:

     1. Employment. The Company agrees to employ the Executive as Director for
Latin America, and the Executive agrees to serve the Company in such capacity,
upon and subject to the terms and conditions set forth in this Agreement.

     2. Term. The Executive's employment under and in accordance with this
Agreement shall commence on May 1, 2001 and shall continue until terminated by
either party upon not less than twenty-four (24) months written notice to the
other party (the period from May 1, 2001 until the date this Agreement is
terminated pursuant to such notice being hereinafter referred to as the "Term"
of this Agreement).

     3. Duties.

     (a) During the Term of this Agreement, the Executive shall be employed as
the Director for Latin America of the Company, shall utilize his best efforts to
enhance the business of the Company and, subject to the supervision of the
Company's President and Chief Executive Officer (the "CEO") and the Company's
Board of Directors (the "Board"), shall be responsible for the general and
supervisory duties normally and customarily attendant to such position at the
Company and its divisions and subsidiaries.

     (b) During the Term of this Agreement, unless the Board shall otherwise
consent in writing, the Executive will, during the regular business hours of the
Company, devote his full time, energies, labor and skills to the business of the
Company and to the duties and responsibilities specified in subsection (a) of
this paragraph 3.

     4. Compensation. In full consideration for all services to be performed by
the Executive for the Company and pursuant to this Agreement, the Company shall
pay to the Executive, and the Executive agrees to accept, an annual salary of
one hundred sixty-five thousand ($165,000) dollars (or such higher amount as may
be approved from time to time by the Board), payable in monthly installments in
accordance with the Company's customary payroll practices. The Company shall
annually review the Executive's salary to determine whether, and to what extent,
if any, such salary shall be adjusted. Any increase in the Executive's salary
shall be in the sole discretion of the Company. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by the Executive in
connection with the performance of his duties under this Agreement and the
business of the Company, in accordance with the Company's usual policies and
practices for expense reimbursement.


<PAGE>



     5. Vacation. The Executive shall be entitled to four (4) weeks of paid
vacation during each twelve (12) month period of his employment under this
Agreement, to be taken at times mutually agreeable to the Executive and the
Company. Any vacation not taken during the twelve (12) month period in which
such vacation is earned may not be taken in any subsequent period, but the
Executive shall be entitled to be paid for up to two (2) weeks of any earned
vacation which is not taken during any twelve (12) month period. In the event
the Executive's employment is terminated for any reason, the Executive shall be
paid for accrued vacation time, if any, which has not been taken, calculated on
a pro-rata basis, but in no event shall such amount exceed more than four (4)
weeks' salary.

     6. Benefits. Throughout the Term of this Agreement, the Executive shall be
eligible to participate in any pension, profit-sharing, stock option or similar
plan or program of the Company now existing or hereafter established and
maintained for the benefit of the Company's employees or executives generally,
to the extent that the Executive is eligible under the general provisions
thereof. The Executive shall also be entitled to participate in any group
insurance, hospitalization, medical, health, accident, disability or similar
plan or program of the Company now existing or hereafter established for the
benefit of the Company's employees or executives generally, to the extent that
the Executive is eligible under the general provisions thereof. In the event the
employment of the Executive with the Company is terminated for any reason, such
benefits shall be continued, at the expense of the Company, to such extent and
for such period of time as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the regulations issued thereunder, as in effect
at the time of such termination of employment.

     7. Company Car. To permit the Executive to perform his duties more
effectively, the Company shall, during the term of the Executive's employment
pursuant to this Agreement [and if the employment of the Executive pursuant to
this Agreement is terminated under any of the circumstances described in
subparagraph (f) of paragraph 8 of this Agreement, for a period of twelve (12)
months after such termination of such employment], lease a suitable automobile
for the use of the Executive, and reimburse the Executive for all expenses of
operating and maintaining such automobile, including, without limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.

     8. Termination of Executive's Employment.

     (a) Notwithstanding any provisions to the contrary contained in this
Agreement, the Executive's employment may be terminated by the Company upon the
Executive's death or disability (as defined below) or for Cause (as defined
below), and the Executive may terminate his employment for Good Reason (as
defined below) upon sixty (60) days' prior written notice to the Company.

     (b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120) consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period, the Executive is mentally or physically unable to
perform the essential duties of his position as Director for Latin America of
the Company (notwithstanding reasonable accommodation by the Company as required
by law), as evidenced by the written certification of a qualified physician
agreed to by the Company and the Executive or, in the absence of such agreement,
by a qualified physician selected by the agreement of a qualified physician
selected by the Company and a qualified physician selected by the Executive.


                                       2
<PAGE>


     (c) For purposes of this Agreement, "Cause" shall mean: (i) the conviction
of the Executive for a felony by a federal or state court of competent
jurisdiction; or (ii) the Executive's failure either (A) to follow a direct
substantive written order, within the reasonable scope of the Executive's
duties, from the CEO, pursuant to authority from the Board, or (B) to adhere to
any written policy or guideline established by the Company from time to time, if
such failure to follow such order or adhere to such policy or guideline is not
cured within thirty (30) days after written notice to the Executive specifying
such failure.

     (d) For purposes of this Agreement, "Good Reason" shall mean any of the
following: (i) the assignment by the Company to the Executive of substantial
duties significantly below the level of the Executive's position as Chief
Financial Officer of the Company, as set forth in paragraph 3 of this Agreement;
or (ii) the failure of the Company to assign to the Executive substantial duties
and responsibilities consistent with such position; or (iii) any reduction by
the Company of the Executive's salary or benefits as set forth in paragraphs 4
or 6 of this Agreement, it being understood that a reduction of benefits
applicable to all executives of the Company (including the Executive) shall not
be deemed a reduction of the Executive's benefits for purposes of this
definition.

     (e) In the event that the Executive's employment under this Agreement is
terminated as a result of death, disability or for Cause by the Company, or
without Good Reason by the Executive, then the Company shall have no further
obligation or liability to the Executive under this Agreement, such that all
salary and benefits provided for in this Agreement shall terminate
simultaneously with the termination of the Executive's employment, except for
salary and benefits earned and accrued through the date of such termination.

     (f) In the event that the Company terminates the employment of the
Executive pursuant to this Agreement prior to the end of the Term of this
Agreement, other than for Cause, death or disability, or the Executive
terminates his employment with the Company with Good Reason prior to the end of
the Term of this Agreement (i) the Company shall pay to the Executive, in each
month following such termination, until the end of the Term of this Agreement,
an amount equal to one-twelfth of the Executive's annual salary in effect on the
date of termination, and (ii) if such termination shall occur ninety (90) days
or less prior to the end of a fiscal year of the Company, the Company shall, in
accordance with any executive compensation or incentive plan of the Company in
effect at the time of such termination, pay to the Executive any bonus and make
on behalf of the Executive any profit sharing plan contribution which the
Company would otherwise have paid or made if the Executive had remained in the
employ of the Company through the end of such fiscal year.

     9. Covenants of the Executive.

     (a) The Executive acknowledges that his employment by the Company has
brought him and will throughout his employment continue to bring him into close
contact with many confidential affairs of the Company, including information
about costs, profits, markets, sales, key personnel, pricing policies,
operational methods and other business affairs, methods and information,
including plans for future developments, not readily available or generally
known to the public. The Executive further acknowledges that the services to be
performed by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in all
of the states of the United States. In recognition of the foregoing, the
Executive covenants and agrees that:


                                       3
<PAGE>

          (i) he will not during his employment with the Company or following
     the expiration of this Agreement or the termination of his employment with
     the Company for any reason (the date of such expiration or termination
     being hereinafter referred to as the "Termination Date") divulge, disclose,
     publish or use (other than for the benefit of the Company) any matter
     relating to the Company which is not publicly available and generally known
     and will not intentionally disclose such matter to anyone (other than to
     executives or employees of the Company who are required to have knowledge
     of such matter), except that the Executive may make such disclosure as may
     be required by law, provided the Company is notified by the Executive in
     writing of such requirement not less than ten (10) business days prior to
     the date such disclosure is so required and the Company has not obtained an
     order or ruling to prevent such disclosure;

          (ii) he will deliver promptly to the Company at the end of the Term of
     this Agreement, or at any other time the Company may so request, all
     memoranda, notes, records, reports and other documents (and all copies
     thereof) relating to the business of the Company which he obtained while
     employed by or otherwise serving or acting on behalf of, the Company, and
     which he may then possess or have under his control;

          (iii) during the Term of this Agreement and any additional period
     during which the Executive may be employed by the Company (whether or not
     such employment shall be pursuant to a written agreement), he will not,
     unless the Board shall otherwise consent in writing, alone or together with
     any other person, firm, partnership, corporation or other entity whatsoever
     (except a subsidiary or affiliate of the Company), directly or indirectly,
     whether as an officer, director, stockholder, partner, proprietor,
     associate, employee, representative, public relations or advertising
     representative, management consultant or otherwise, engage in, or have any
     material financial or monetary interest in, or have any financial or
     monetary association with, any other person, corporation, firm, partnership
     or other entity engaged in, the composite materials or seafood business or
     any other business which is competitive with any business conducted or
     contemplated by the Company; and

          (iv) for a period of twenty-four (24) months following the Termination
     Date, he will not:

               (A) solicit, or attempt to solicit, any person or entity who or
          which is a customer of the Company (as of the Termination Date or at
          any time prior thereto) as a customer for any person or entity engaged
          in the composite materials or seafood business, or any other business
          which is competitive with any business conducted or contemplated by
          the Company; or

               (B) otherwise disrupt or interfere with, or attempt to disrupt or
          interfere with, the Company's relations with any actual or potential
          customer or supplier or any other relationship of the Company.

          (b) The Executive recognizes that the territorial and time limitations
     in this paragraph 9 are reasonable and properly required for the adequate
     protection of the business of the Company, and that in the event that any
     such territorial or time limitation is deemed to be unreasonable by a court
     of competent jurisdiction, the Executive agrees to a reduction of said such
     territorial or time limitation, as the case may be, to such area or period
     as such court deems reasonable. In the event that the Executive shall be in



                                       4
<PAGE>


     violation of any of the covenants contained in this paragraph 9, the time
     limitation thereof shall be extended for a period of time equal to the
     period of time during which such breach or breaches should exist.


          (c) The Executive further agrees that the remedy at law for any breach
     or threatened breach of any of the covenants contained in this paragraph 9
     will be inadequate and that the Company, in addition to such other remedies
     as may be available to it, at law or in equity, shall be entitled to
     injunctive relief without bond or other security. This paragraph 9
     constitutes independent and severable covenants and, if any or all of the
     provisions of this paragraph 9 is or are held to be invalid or
     unenforceable for any reason, such invalidity or unenforceability shall not
     in any way invalidate or affect the remainder of this paragraph 9 or the
     remainder of this Agreement, as the case may be, which shall remain in full
     force and effect.

          10. Governing Law. This Agreement shall be construed in accordance
     with and governed by the laws of the State of New Jersey applicable to
     contracts executed in and to be performed solely within such state.

          11. Notices. All notices required or permitted to be given by either
     party pursuant to this Agreement, including notice of change of address,
     shall be in writing and delivered by hand, or mailed, postage prepaid,
     certified or registered mail, return receipt requested, to the other party
     as follows:

            If to the Company:      Baltek Corporation
                                    10 Fairway Court
                                    Northvale, New Jersey 07047

                                    Attention: Jacques Kohn
                                    President and Chief Executive Officer

            If to the Executive:    Antonio L.  Diaz
                                    122 Carrie Lane
                                    Phoenixville, Pennsylvania 19460


      12.  Miscellaneous.

     (a) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written agreements and understandings relating to the
employment of the Executive by the Company. There are no oral promises,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution this Agreement by the Executive or in
effect between the parties. This Agreement may not be amended, and no provision
hereof shall be waived, except by a writing signed by the Company and the
Executive (or in the case of a waiver of a provision of this Agreement, by the
party waiving compliance therewith), which states that it is intended, as the
case may be, to amend this Agreement or waive a provision of this Agreement. Any
waiver of any right or failure to act in a specific instance shall relate only
to such instance and shall not be construed as an agreement to waive any right
or failure to act in any other instance, whether or not similar.


                                       5
<PAGE>


     (b) Severability. Should any provision of this Agreement be held by a court
of competent jurisdiction to be unenforceable or prohibited by applicable law,
this Agreement shall be considered divisible as to such provision, which shall
be inoperative, and the remainder of this Agreement shall be valid and binding
as if such provision were not included in this Agreement.


     (c) Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Executive and his executors, administrators, heirs and
legal representatives.

     (d) Headings. All headings in this Agreement are for convenience only and
are not intended to affect the meaning of any provision hereof.

     (e) Counterparts. This Agreement may be executed in two (2) or more
counterparts with the same effect as if the signatures to all such counterparts
were upon the same instrument, and all such counterparts shall constitute but
one instrument.


     IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized officer
as of the day and year first above written.


                                   BALTEK CORPORATION




                                    By:/s/Jacques Kohn
                                    ------------------
                                          Jacques Kohn
                                          President and Chief Executive Officer





                                          /s/Antonio L.  Diaz
                                          -------------------
                                          Antonio L.  Diaz


                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>5
<FILENAME>exhibit10-9.txt
<TEXT>
                         EXECUTIVE EMPLOYMENT AGREEMENT

     EXECUTIVE EMPLOYMENT AGREEMENT made as of the 1st day of January, 2002, by
and between BALTEK CORPORATION, a Delaware corporation with offices at 10
Fairway Court, Northvale, New Jersey 07647 (the "Company"), and Harold Gutmann,
residing at 801 Bailey Road, Rivervale, New Jersey 07675 (the "Executive").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, the Executive has been employed by the Company as Vice
President-U.S. Manufacturing; and

     WHEREAS, the Company desires to continue the employment of the Executive as
Vice President-U.S. Manufacturing and the Executive desires to continue to be so
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the Executive and the Company agree as follows:

     1. Employment. The Company agrees to continue to employ the Executive as
Vice President-U.S. Manufacturing, and the Executive agrees to continue
employment by the Company in such capacity, upon and subject to the terms and
conditions set forth in this Agreement.

     2. Term. The Executive's employment under and in accordance with this
Agreement shall commence on January 1, 2002 and shall continue until terminated
by either party upon not less than twenty-four (24) months written notice to the
other party (the period from January 1, 2002 until the date this Agreement is
terminated pursuant to such notice being hereinafter referred to as the "Term"
of this Agreement).

     3. Duties.

     (a) During the Term of this Agreement, the Executive shall be employed as
Vice President-U.S. Manufacturing of the Company, shall utilize his best efforts
to enhance the business of the Company and, subject to the supervision of the
Company's President and Chief Executive Officer (the "CEO") and the Company's
Board of Directors (the "Board"), shall be responsible for the general and
supervisory duties normally and customarily attendant to such position at the
Company and its divisions and subsidiaries.

     (b) During the Term of this Agreement, unless the Board shall otherwise
consent in writing, the Executive will, during the regular business hours of the
Company, devote his full time, energies, labor and skills to the business of the
Company and to the duties and responsibilities specified in subsection (a) of
this paragraph 3.




<PAGE>

     4. Compensation. In full consideration for all services to be performed by
the Executive for the Company and pursuant to this Agreement, the Company shall
pay to the Executive, and the Executive agrees to accept, an annual salary of
one hundred seventy thousand ($170,000) dollars (or such higher amount as may be
approved from time to time by the Board), payable in monthly installments in
accordance with the Company's customary payroll practices. The Company shall
annually review the Executive's salary to determine whether, and to what extent,
if any, such salary shall be adjusted. Any increase in the Executive's salary
shall be in the sole discretion of the Company. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by the Executive in
connection with the performance of his duties under this Agreement and the
business of the Company, in accordance with the Company's usual policies and
practices for expense reimbursement.

     5. Vacation. The Executive shall be entitled to four (4) weeks of paid
vacation during each twelve (12) month period of his employment under this
Agreement, to be taken at times mutually agreeable to the Executive and the
Company. Any vacation not taken during the twelve (12) month period in which
such vacation is earned may not be taken in any subsequent period, but the
Executive shall be entitled to be paid for up to two (2) weeks of any earned
vacation which is not taken during any twelve (12) month period. In the event
the Executive's employment is terminated for any reason, the Executive shall be
paid for accrued vacation time, if any, which has not been taken, calculated on
a pro-rata basis, but in no event shall such amount exceed more than four (4)
weeks' salary.

     6. Benefits. Throughout the Term of this Agreement, the Executive shall be
eligible to participate in any pension, profit-sharing, stock option or similar
plan or program of the Company now existing or hereafter established and
maintained for the benefit of the Company's employees or executives generally,
to the extent that the Executive is eligible under the general provisions
thereof. The Executive shall also be entitled to participate in any group
insurance, hospitalization, medical, health, accident, disability or similar
plan or program of the Company now existing or hereafter established for the
benefit of the Company's employees or executives generally, to the extent that
the Executive is eligible under the general provisions thereof. In the event the
employment of the Executive with the Company is terminated for any reason, such
benefits shall be continued, at the expense of the Company, to such extent and
for such period of time as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the regulations issued thereunder, as in effect
at the time of such termination of employment.

     7. Company Car. To permit the Executive to perform his duties more
effectively, the Company shall, during the term of the Executive's employment
pursuant to this Agreement [and if the employment of the Executive pursuant to
this Agreement is terminated under any of the circumstances described in
subparagraph (f) of paragraph 8 of this Agreement, for a period of twelve (12)
months after such termination of such employment], lease a suitable automobile
for the use of the Executive, and reimburse the Executive for all expenses of
operating and maintaining such automobile, including, without limitation,
comprehensive and liability insurance, in accordance with the Company's policies
and practices for executive company cars.

     8. Termination of Executive's Employment.

     (a) Notwithstanding any provisions to the contrary contained in this
Agreement, the Executive's employment may be terminated by the Company upon the
Executive's death or disability (as defined below) or for Cause (as defined
below), and the Executive may terminate his employment for Good Reason (as
defined below) upon sixty (60) days' prior written notice to the Company.


                                       2
<PAGE>


     (b) For purposes of this Agreement, "disability" shall mean that, for a
period of one hundred twenty (120) consecutive days or more, or for one hundred
eighty (180) days or more (even though not consecutive) within any three hundred
sixty (360) day period, the Executive is mentally or physically unable to
perform the essential duties of his position as Vice President-U.S.
Manufacturing of the Company (notwithstanding reasonable accommodation by the
Company as required by law), as evidenced by the written certification of a
qualified physician agreed to by the Company and the Executive or, in the
absence of such agreement, by a qualified physician selected by the agreement of
a qualified physician selected by the Company and a qualified physician selected
by the Executive.


     (c) For purposes of this Agreement, "Cause" shall mean: (i) the conviction
of the Executive for a felony by a federal or state court of competent
jurisdiction; or (ii) the Executive's failure either (A) to follow a direct
substantive written order, within the reasonable scope of the Executive's
duties, from the CEO, pursuant to authority from the Board, or (B) to adhere to
any written policy or guideline established by the Company from time to time, if
such failure to follow such order or adhere to such policy or guideline is not
cured within thirty (30) days after written notice to the Executive specifying
such failure.

     (d) For purposes of this Agreement, "Good Reason" shall mean any of the
following: (i) the assignment by the Company to the Executive of substantial
duties significantly below the level of the Executive's position as Vice
President-U.S. Manufacturing of the Company, as set forth in paragraph 3 of this
Agreement; or (ii) the failure of the Company to assign to the Executive
substantial duties and responsibilities consistent with such position; or (iii)
any reduction by the Company of the Executive's salary or benefits as set forth
in paragraphs 4 or 6 of this Agreement (it being understood that a reduction of
benefits applicable to all executives of the Company (including the Executive)
shall not be deemed a reduction of the Executive's benefits for purposes of this
definition.

     (e) In the event that the Executive's employment under this Agreement is
terminated as a result of death, disability or for Cause by the Company, or
without Good Reason by the Executive, then the Company shall have no further
obligation or liability to the Executive under this Agreement, such that all
salary and benefits provided for in this Agreement shall terminate
simultaneously with the termination of the Executive's employment, except for
salary and benefits earned and accrued through the date of such termination.

     (f) In the event that the Company terminates the employment of the
Executive pursuant to this Agreement prior to the end of the Term of this
Agreement, other than for Cause, death or disability, or the Executive
terminates his employment with the Company with Good Reason prior to the end of
the Term of this Agreement (i) the Company shall pay to the Executive, in each
month following such termination, until the end of the Term of this Agreement,
an amount equal to one-twelfth of the Executive's annual salary in effect on the
date of termination, and (ii) if such termination shall occur ninety (90) days
or less prior to the end of a fiscal year of the Company, the Company shall, in
accordance with any executive compensation or incentive plan of the Company in
effect at the time of such termination, pay to the Executive any bonus and make
on behalf of the Executive any profit sharing plan contribution which the
Company would otherwise have paid or made if the Executive had remained in the
employ of the Company through the end of such fiscal year.

                                       3
<PAGE>


     9. Covenants of the Executive.

     (a) The Executive acknowledges that his employment by the Company has
brought him and will throughout his employment continue to bring him into close
contact with many confidential affairs of the Company, including information
about costs, profits, markets, sales, key personnel, pricing policies,
operational methods and other business affairs, methods and information,
including plans for future developments, not readily available or generally
known to the public. The Executive further acknowledges that the services to be
performed by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, and that the Company currently
competes or intends to compete with other organizations that are located in all
of the states of the United States. In recognition of the foregoing, the
Executive covenants and agrees that:


          (i) he will not during his employment with the Company or following
     the expiration of this Agreement or the termination of his employment with
     the Company for any reason (the date of such expiration or termination
     being hereinafter referred to as the "Termination Date") divulge, disclose,
     publish or use (other than for the benefit of the Company) any matter
     relating to the Company which is not publicly available and generally known
     and will not intentionally disclose such matter to anyone (other than to
     executives or employees of the Company who are required to have knowledge
     of such matter), except that the Executive may make such disclosure as may
     be required by law, provided the Company is notified by the Executive in
     writing of such requirement not less than ten (10) business days prior to
     the date such disclosure is so required and the Company has not obtained an
     order or ruling to prevent such disclosure;

          (ii) he will deliver promptly to the Company at the end of the Term of
     this Agreement, or at any other time the Company may so request, all
     memoranda, notes, records, reports and other documents (and all copies
     thereof) relating to the business of the Company which he obtained while
     employed by or otherwise serving or acting on behalf of, the Company, and
     which he may then possess or have under his control;

          (iii) during the Term of this Agreement and any additional period
     during which the Executive may be employed by the Company (whether or not
     such employment shall be pursuant to a written agreement), he will not,
     unless the Board shall otherwise consent in writing, alone or together with
     any other person, firm, partnership, corporation or other entity whatsoever
     (except a subsidiary or affiliate of the Company), directly or indirectly,
     whether as an officer, director, stockholder, partner, proprietor,
     associate, employee, representative, public relations or advertising
     representative, management consultant or otherwise, engage in, or have any
     material financial or monetary interest in, or have any financial or
     monetary association with, any other person, corporation, firm, partnership
     or other entity engaged in, the composite materials or seafood business or
     any other business which is competitive with any business conducted or
     contemplated by the Company; and

          (iv) for a period of twenty-four (24) months following the Termination
     Date, he will not:

               (A) solicit, or attempt to solicit, any person or entity who or
          which is a customer of the Company (as of the Termination Date or at
          any time prior thereto) as a customer for any person or entity engaged
          in the composite materials or seafood business, or any


                                       4
<PAGE>


          other business which is competitive with any business conducted or
          contemplated by the Company; or

               (B) otherwise disrupt or interfere with, or attempt to disrupt or
          interfere with, the Company's relations with any actual or potential
          customer or supplier or any other relationship of the Company.

               (b) The Executive recognizes that the territorial and time
          limitations in this paragraph 9 are reasonable and properly required
          for the adequate protection of the business of the Company, and that
          in the event that any such territorial or time limitation is deemed to
          be unreasonable by a court of competent jurisdiction, the Executive
          agrees to a reduction of said such territorial or time limitation, as
          the case may be, to such area or period as such court deems
          reasonable. In the event that the Executive shall be in violation of
          any of the covenants contained in this paragraph 9, the time
          limitation thereof shall be extended for a period of time equal to the
          period of time during which such breach or breaches should exist.

               (c) The Executive further agrees that the remedy at law for any
          breach or threatened breach of any of the covenants contained in this
          paragraph 9 will be inadequate and that the Company, in addition to
          such other remedies as may be available to it, at law or in equity,
          shall be entitled to injunctive relief without bond or other security.
          This paragraph 9 constitutes independent and severable covenants and,
          if any or all of the provisions of this paragraph 9 is or are held to
          be invalid or unenforceable for any reason, such invalidity or
          unenforceability shall not in any way invalidate or affect the
          remainder of this paragraph 9 or the remainder of this Agreement, as
          the case may be, which shall remain in full force and effect.

          10. Governing Law. This Agreement shall be construed in accordance
     with and governed by the laws of the State of New Jersey applicable to
     contracts executed in and to be performed solely within such state.

          11. Notices. All notices required or permitted to be given by either
     party pursuant to this Agreement, including notice of change of address,
     shall be in writing and delivered by hand, or mailed, postage prepaid,
     certified or registered mail, return receipt requested, to the other party
     as follows:

            If to the Company:            Baltek Corporation
                                    10 Fairway Court
                                    Northvale, New Jersey 07047

                                    Attention:
                                          President and Chief Executive Officer

            If to the Executive:          Harold Gutmann
                                    801 Bailey Road
                                    Rivervale, New Jersey 07675


      12.   Miscellaneous.

      (a)   Entire Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior oral or written agreements and


                                       5
<PAGE>


understandings relating to the employment of the Executive by the Company. There
are no oral promises, representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution this Agreement by the
Executive or in effect between the parties. This Agreement may not be amended,
and no provision hereof shall be waived, except by a writing signed by the
Company and the Executive (or in the case of a waiver of a provision of this
Agreement, by the party waiving compliance therewith), which states that it is
intended, as the case may be, to amend this Agreement or waive a provision of
this Agreement. Any waiver of any right or failure to act in a specific instance
shall relate only to such instance and shall not be construed as an agreement to
waive any right or failure to act in any other instance, whether or not similar.

      (b)   Severability.  Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable or prohibited by applicable
law, this Agreement shall be considered divisible as to such provision, which
shall be inoperative, and the remainder of this Agreement shall be valid and
binding as if such provision were not included in this Agreement.


      (c)   Successors and Assigns.  This Agreement shall inure to the benefit
of, and be binding upon, the Company and any corporation with which the Company
merges or consolidates or to which the Company sells all or substantially all of
its assets, and upon the Executive and his executors, administrators, heirs
and legal representatives.

      (d)   Headings.  All headings in this Agreement are for convenience only
and are not intended to affect the meaning of any provision hereof.

      (e)   Counterparts.  This Agreement may be executed in two (2) or more
counterparts with the same effect as if the signatures to all such counterparts
were upon the same instrument, and all such counterparts shall constitute but
one instrument.


      IN WITNESS WHEREOF, the Executive has executed this Agreement and the
Company has caused this Agreement to be executed by its duly authorized officer
as of the day and year first above written.


                                    BALTEK CORPORATION




                                    By:/s/Jacques Kohn
                                    ------------------
                                          Jacques Kohn
                                          President and Chief Executive Officer




                                          /s/Harold Gutmann
                                          -----------------
                                          Harold Gutmann



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>6
<FILENAME>exhibit13.txt
<TEXT>





                       BALTEK CORPORATION AND SUBSIDIARIES









       CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
                      AS OF DECEMBER 31, 2001 AND 2000 AND
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001








                       PREPARED FOR FILING AS PART OF THE
                            ANNUAL REPORT (FORM 10-K)
                    TO THE SECURITIES AND EXCHANGE COMMISSION
                      FOR THE YEAR ENDED DECEMBER 31, 2001

                                   **********
<PAGE>



BALTEK CORPORATION AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
  FINANCIAL STATEMENT SCHEDULE
PREPARED FOR FILING AS PART OF THE ANNUAL REPORT
  (FORM 10-K) TO THE SECURITIES AND EXCHANGE COMMISSION
YEAR ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                              Page
<S>                                                                                            <C>

INDEPENDENT AUDITORS' REPORT........................................................................1

  Consolidated Balance Sheets as of December 31, 2001 and 2000......................................2

  Consolidated Statements of Income and Comprehensive Income for Each of the Three Years in
           the Period Ended December 31, 2001.......................................................3

  Consolidated Statements of Stockholders' Equity for Each of the Three Years in the Period Ended
           December 31, 2001........................................................................4

  Consolidated Statements of Cash Flows for Each of the Three Years in the Period Ended December
           31, 2001.................................................................................5

  Notes to Consolidated Financial Statements for Each of the Three Years in the Period Ended
           December 31, 2001........................................................................6-19

FINANCIAL STATEMENT SCHEDULE AS OF AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER
31, 2001:

II - Valuation and Qualifying Accounts..............................................................20
</TABLE>


All other schedules for which provision is made in the applicable regulations of
the Securities and Exchange  Commission have been omitted because of the absence
of the  conditions  under  which  they are  required  or  because  the  required
information called for is set forth in the consolidated  financial statements or
notes thereto.

<PAGE>


INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Baltek Corporation and Subsidiaries

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Baltek
Corporation and  Subsidiaries  (the  "Corporation")  as of December 31, 2001 and
2000, and the related consolidated statements of income and comprehensive income
, stockholders'  equity and cash flows for each of the three years in the period
ended  December  31, 2001.  Our audits also  included  the  financial  statement
schedule  listed in the  accompanying  index.  These  financial  statements  and
financial  statement  schedule  are  the  responsibility  of  the  Corporation's
management.  Our  responsibility  is to  express  an  opinion  on the  financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material respects, the financial position of Baltek Corporation and Subsidiaries
as of December 31, 2001 and 2000, and the results of their  operations and their
cash flows for each of the three years in the period ended  December 31, 2001 in
conformity with accounting principles generally accepted in the United States of
America.  Also,  in  our  opinion,  such  financial  statement  schedule,   when
considered in relation to the basic consolidated financial statements taken as a
whole,  presents  fairly in all  material  respects  the  information  set forth
therein.

As discussed in Note 12 to the consolidated financial statements,  on January 1,
2001 the Company changed its method of accounting for derivative  instruments to
conform to Statement of Financial Accounting Standards No. 133.


/S/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey

March 20, 2002

<PAGE>



                       BALTEK CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Dollars in thousands, except per share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                        December 31,
ASSETS                                                               2001        2000

<S>                                                              <C>         <C>
CURRENT ASSETS:
   Cash and cash equivalents                                     $    573    $  1,338
   Accounts receivable (less allowance for doubtful
        accounts - 2001, $260; 2000, $275)                          7,860      10,370
   Inventories                                                     19,933      20,421
   Prepaid expenses                                                   708         539
   Other                                                            2,610       1,779
                                                                 --------    --------
      Total current assets                                         31,684      34,447

PROPERTY, PLANT AND EQUIPMENT - Net                                13,129      13,062
TIMBER AND TIMBERLANDS                                              9,963       9,073
OTHER ASSETS                                                        1,006         949
                                                                 --------    --------
TOTAL ASSETS                                                     $ 55,782    $ 57,531
                                                                 ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Notes payable                                                 $  8,700    $ 10,605
   Accounts payable                                                 2,431       3,863
   Income taxes payable                                               274         143
   Accrued salaries, wages and bonuses payable                        587       1,190
   Accrued expenses and other liabilities                           2,676       1,494
   Current portion of long-term debt                                  113          44
   Current portion of obligation under capital lease                   82         465
                                                                 --------    --------
        Total current liabilities                                  14,863      17,804


OBLIGATION UNDER CAPITAL LEASE                                         --          82

LONG-TERM DEBT
                                                                      302          46

UNION EMPLOYEE TERMINATION BENEFITS                                   210         121
                                                                 --------    --------

           Total liabilities                                       15,375      18,053
                                                                 --------    --------

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par; 5,000,000 shares authorized and
         unissued                                                      --          --
   Common stock, $1.00 par; 10,000,000 shares authorized,
         2,523,261 shares issued                                    2,523       2,523
   Additional paid-in capital                                       2,157       2,157
   Retained earnings                                               36,380      34,798
   Accumulated other comprehensive loss                              (147)         --
   Treasury stock, at cost: 66,439 shares                            (506)         --
                                                                 --------    --------
        Total stockholders' equity                                 40,407      39,478
                                                                 --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 55,782    $ 57,531
                                                                 ========    ========
</TABLE>

See notes to consolidated financial statements



                                       2
<PAGE>



                       BALTEK CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                            AND COMPREHENSIVE INCOME
                  (Dollars in thousands, except per share data)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                Year Ended December 31,
                                                           2001           2000           1999

<S>                                                 <C>            <C>            <C>
NET SALES                                           $    78,068    $    89,060    $    86,027

COST OF PRODUCTS SOLD                                    59,709         68,364         66,337

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                                15,085         14,865         14,145
                                                    -----------    -----------    -----------

           Operating income                               3,274          5,831          5,545
                                                    -----------    -----------    -----------

OTHER INCOME (EXPENSE):
  Interest expense                                       (1,000)          (937)        (1,356)
  Foreign exchange gain (loss)                               53           (328)          (336)
  Interest income                                             7             14             15
  Other, net                                                (11)            (6)            --
                                                    -----------    -----------    -----------

           Total                                           (951)        (1,257)        (1,677)
                                                    -----------    -----------    -----------

INCOME BEFORE TAXES                                       2,323          4,574          3,868

INCOME TAX PROVISION                                        741          1,692          1,052
                                                    -----------    -----------    -----------

NET INCOME                                                1,582          2,882          2,816

OTHER COMPREHENSIVE (LOSS):
       Change in fair value of interest rate swap          (131)            --             --
       Cumulative effect of adopting SFAS 133               (16)            --             --
                                                    -----------    -----------    -----------

COMPREHENSIVE INCOME                                $     1,435    $     2,882    $     2,816
                                                    -----------    -----------    -----------
BASIC AND DILUTED EARNINGS
   PER COMMON SHARE                                 $      0.64    $      1.14    $      1.12
                                                    ===========    ===========    ===========

WEIGHTED AVERAGE SHARES OUTSTANDING                   2,468,472      2,523,261      2,523,261
                                                    ===========    ===========    ===========


See notes to consolidated financial statements

</TABLE>

                                       3
<PAGE>


                       BALTEK CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  (Dollars in thousands, except per share data)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                 Accum.
                                           Common  Additional                     Other
                                           Stock,   Paid-in        Retained       Comp.    Treasury
                                          $1 Par    Capital        Earnings      (Loss)      Stock

<S>                                      <C>        <C>             <C>        <C>         <C>
BALANCE, JANUARY 1, 1999                 $  2,523   $  2,157        $ 29,100    $     --    $     --

  Net income - 1999                            --         --           2,816          --          --

BALANCE, DECEMBER 31, 1999                  2,523      2,157          31,916          --          --

  Net income - 2000                            --         --           2,882          --          --

BALANCE, DECEMBER 31, 2000                  2,523      2,157          34,798          --          --


  Cumulative effect of adopting SFAS 133       --         --              --         (16)         --

  Change in value of interest rate swap        --         --              --        (131)         --

  Purchase of treasury stock                   --         --              --          --        (506)

  Net income - 2001                            --         --           1,582          --          --
                                         --------   --------        --------    --------    --------

BALANCE, DECEMBER 31, 2001               $  2,523   $  2,157        $ 36,380    $   (147)   $   (506)
                                         ========   ========        ========    ========    ========

</TABLE>

See notes to consolidated financial
statements.


                                       4
<PAGE>

                       BALTEK CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                Year Ended December 31,
                                                             2001       2000       1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>        <C>        <C>
  Net income                                              $ 1,582    $ 2,882    $ 2,816
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                           2,772      3,038      3,002
    Foreign exchange (gain) loss                              (53)       328        336
    Deferred taxes                                             27       (384)      (180)
    Changes in assets and liabilities, net of the effect
       of foreign currency translation and
       acquisition:
        Accounts receivable                                 2,499     (1,086)    (2,338)
        Income tax payable/receivable                         135        (68)       (15)
        Inventories                                           489     (1,943)    (3,390)
        Prepaid expenses and other current assets          (1,131)      (446)        36
        Other assets                                           45        (29)       (14)
        Accounts payable and accrued expenses                (984)      (174)     1,839
        Other                                                  99         34       (234)
                                                          -------    -------    -------

           Net cash provided by operating activities        5,480      2,152      1,858
                                                          -------    -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net acquisitions of property, plant and equipment        (1,831)    (1,746)    (2,410)
  Increase in timber and timberlands                       (1,516)    (1,615)      (943)
  Acquisition of seafood assets, net of cash acquired          --         --       (491)
                                                          -------    -------    -------

           Net cash used in investing activities           (3,347)    (3,361)    (3,844)

CASH FLOWS FROM FINANCING ACTIVITIES:
  (Decrease) increase in notes payable                     (1,905)     2,526      3,398
  Payments of long-term debt                                  (69)      (210)    (1,357)
  Principal payments under capital lease                     (465)      (415)      (382)
  Purchase of treasury stock                                 (506)        --         --
                                                          -------    -------    -------

    Net cash (used in) provided by financing activities    (2,945)     1,901      1,659
                                                          -------    -------    -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                        47       (321)       238
                                                          -------    -------    -------
(DECREASE) INCREASE
  CASH AND CASH EQUIVALENTS                                  (765)       371        (89)

CASH AND CASH EQUIVALENTS,
  BEGINNING OF YEAR                                         1,338        967      1,056
                                                          -------    -------    -------

CASH AND CASH EQUIVALENTS,
  END OF YEAR                                             $   573    $ 1,338    $   967
                                                          =======    =======    =======

SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION AND NON-CASH TRANSACTIONS:
  Cash paid during the year for:
    Interest                                              $   895    $   897    $ 1,281
                                                          =======    =======    =======

    Income taxes                                          $   631    $ 2,199    $ 1,509
                                                          =======    =======    =======

    Proceeds from equipment loan used to reduce working
        capital debt                                      $   370    $    --    $    --
                                                          =======    =======    =======
</TABLE>

See notes to consolidated financial statements.

                                       5
<PAGE>

BALTEK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
--------------------------------------------------------------------------------


1.   NATURE OF OPERATIONS

     Baltek  Corporation  and  subsidiaries  (the  "Company") is a multinational
     manufacturing and marketing  company.  The Company operates in two lines of
     business:  supplying core materials,  principally balsa wood and balsa wood
     products,  linear and cross-linked PVC Foam and non-woven  polyester mat to
     various  composite  industries;  and in the seafood  business,  as a shrimp
     producer  and,  for the first nine months of 2001,  as a seafood  importer.
     Approximately  74% of Baltek's revenues are derived from its core materials
     segment and 26% from the seafood segment.

     The  principal  market for the  Company's  core  materials is in the United
     States,  while the seafood market is divided  between the United States and
     Europe.

     The balsa and shrimp products are produced in Ecuador,  South America.  The
     supply of raw  materials has been without  interruption  for over 60 years.
     The balsa and shrimp  identifiable  assets located at various facilities in
     Ecuador are included in the Company's  consolidated balance sheet and total
     approximately  $27 million at December 31, 2001.  Foam and mat products are
     purchased from outside vendors;  the foam products are further processed by
     the Company for sale to customers.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation - The consolidated financial statements include
     the  accounts  of  the  Company  and  its  wholly-owned  subsidiaries.  All
     significant  intercompany accounts and transactions have been eliminated in
     consolidation.

     Cash and Cash Equivalents - Cash equivalents  consist of short-term  highly
     liquid investments with maturities of three months or less when purchased.

     Cash flows from  Baltek's  operations in foreign  countries are  calculated
     based on their reporting  currencies.  As a result of this, amounts related
     to changes in assets and liabilities reported on the consolidated statement
     of cash flows will not  necessarily  agree to changes in the  corresponding
     balances on the  consolidated  balance sheets.  The effect of exchange rate
     changes  on cash  balances  held in foreign  currencies  is  reported  on a
     separate line below cash flows from financing activities.

     Inventories - Inventories  are valued at the lower of cost or market.  Cost
     is determined by use of the first-in, first-out (FIFO) method.

     Investments - All  investments  held by the Company are recorded as trading
     securities and included in other current assets.

     Property - Property, plant and equipment is stated at cost. Depreciation is
     provided for depreciable assets over their estimated useful lives using the
     straight-line  method.  In previous years,  various  accepted  depreciation
     methods  had  been  used.   The  effect  of   switching   entirely  to  the
     straight-line method in 2001 on a prospective basis was insignificant.  The
     asset under  capital lease and leasehold  improvements  are amortized  over
     their  estimated  useful  lives,  or the life of the  lease,  whichever  is
     shorter.


                                       6
<PAGE>


     Income Taxes - Taxes on current income are provided by the Company and each
     subsidiary  as  prescribed  by local  tax laws.  Deferred  tax  assets  and
     liabilities are recognized for the future tax consequences  attributable to
     differences  between the financial  statement  carrying amounts of existing
     assets and liabilities and their respective tax bases.

     Timber and Timberlands - Timberlands  are carried at cost.  Timber-deferred
     cultivation costs represent the cost of preparing, clearing and seeding the
     Company's  balsa wood  plantations.  Amortization  of deferred  cultivation
     costs is based on units of production. Timber carrying costs, which include
     the regular  maintenance  and  overseeing of  timberlands,  are expensed as
     incurred.

     Common  Stock - Holders of the  Company's  Common  Stock have full  voting,
     dividend and liquidation preferences in the Company.

     Foreign  Currency  Translation - The financial  statements of the Company's
     European and Japanese  subsidiaries are remeasured into U.S.  dollars,  the
     Company's  functional  currency.  The  statements  of  the  Ecuadorian  and
     Uruguayan subsidiaries are maintained in U.S. dollars.

     Financial  Instruments - Derivative  financial  instruments are used by the
     Company to manage its interest rate and foreign currency exposure (see Note
     12).  Effective January 1, 2001, the Company adopted Statement of Financial
     Accounting  Standards  No. 133 (as  amended),  "Accounting  for  Derivative
     Instruments and Hedging Activities".

     Foreign  Currency  Risk  Management  - The  Company  uses  forward  foreign
     currency  exchange  contracts to reduce currency exchange rate risk on firm
     commitment  purchases  denominated in foreign  currencies.  Gains or losses
     resulting  from  these  contracts  are  deferred  and are  included  in the
     purchase  price of the  materials.  The maximum term of these  contracts is
     less than two years.  The Company does not intend to enter into  derivative
     financial instruments for speculative purposes.

     Concentrations of Credit Risk - Baltek's core material products, as well as
     shrimp  and  other  seafood  products,  are  sold to a number  of  markets,
     including  boating,  transportation,  military,  hobby, and the retail food
     industry.  Baltek's products are sold throughout the United States, Canada,
     Europe,  Japan and Australia to approximately  1,600 ultimate users. Credit
     risk  related to  Baltek's  trade  receivables  is limited due to the large
     number of customers in differing industries and geographic areas.

     Fair Value of Financial  Instruments  - At December 31, 2001 and 2000,  the
     carrying value of cash and cash equivalents,  accounts receivable, accounts
     payable and other financial instruments approximated their fair values. The
     carrying  amount of notes payable and other debt  obligations  approximates
     fair value based on the nature and terms of the loans,  including borrowing
     rates and other terms available to the Company for loans with similar terms
     and conditions.


                                       7
<PAGE>


     Research and  Development - Research and  development  costs are charged to
     expense as  incurred.  Research  and  development  expenditures  charged to
     operations were approximately $665,000, $565,000 and $597,000 in 2001, 2000
     and 1999, respectively.

     Basic  and  Diluted  Earnings  per  Common  Share -  Earnings  per share is
     computed by dividing  net income by the  weighted-average  number of common
     shares  outstanding.  The Company  does not have any  potentially  dilutive
     instruments;  therefore, the reporting of diluted earnings per share is not
     applicable.

     Revenue  Recognition - Product  revenues are recognized  when title passes.
     For the majority of the Company's sales,  this occurs when the products are
     shipped. Sales are reported net of discounts and allowances.

     Use of Estimates - The Company's  financial  statements  include the use of
     estimates and assumptions  which have been developed by management based on
     available  facts and  information.  Actual  results could differ from those
     estimates.

     New Accounting  Pronouncements - In October 2001, The Financial  Accounting
     Standard Board ("FASB"), issued Statement of Financial Accounting Statement
     ("SFAS") No. 144,  "accounting  for the Impairment or Disposal of long-live
     Assets,  "which addresses financial  accounting and reporting for long-live
     assets. The Company expects to adopt this standard during the first quarter
     of fiscal  20002,  Management  does not believe  that the  adoption of this
     standard will have a material impact on the Company's financial position or
     results of operations.


3.   INVENTORIES

     Inventories  of the core  materials and shrimp  segments are  summarized as
     follows (amounts in thousands):

                                     2001      2000
                                     ----      ----

                Raw materials     $ 9,131   $ 5,314
                Work-in-process     4,844     3,273
                Finished goods      5,958    11,834
                                  -------   -------

                Inventories       $19,933   $20,421
                                  =======   =======


     Included in the above  amounts are  inventories  relating to the  Company's
     seafood  operations of $1,068,000  and  $5,964,000 at December 31, 2001 and
     2000, respectively.

     As part of its  decision to  terminate  its  seafood  import  business,  in
     September  2001,  the Company  signed an agreement  with  National Fish and
     Seafood,  Inc. ("NFS").  The agreement provided that NFS assist the Company
     in selling its inventory to third parties. Under the agreement, the Company
     invoiced NFS for each sale at an amount net of commissions and NFS invoiced
     the ultimate  customer  and carried the credit risk.  At December 31, 2001,
     substantially all of the inventory was sold.

                                       8
<PAGE>


4.   PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and  equipment is comprised of the  following  (amounts in
     thousands):

<TABLE>
<CAPTION>
                                                 Estimated
                                                Useful Lives               2001            2000

<S>                                              <C>                     <C>             <C>
        Land                                                            $   125         $   125
        Shrimp properties                        5-20 years              19,671          19,306
        Buildings and improvements                20 years                2,242           2,062
        Machinery and equipment                  5-10 years              14,190          12,897
        Leasehold improvements                                            1,323           1,002
        Assets under capital lease                                        2,499           2,499
        Construction-in-progress                                             56             330
                                                                        -------         -------
        Total                                                            40,106          38,221
        Less accumulated depreciation and amortization                   26,977          25,159
                                                                        -------         -------
        Property, plant and equipment -net                              $13,129         $13,062
                                                                        =======         =======
</TABLE>


     Shrimp  properties  consist  principally  of shrimp ponds, a hatchery and a
     packing plant.  Accumulated amortization related to the asset under capital
     lease  at  December  31,  2001  and 2000  was  $2,457,000  and  $2,207,000,
     respectively.

5.   TIMBER AND TIMBERLANDS

     Timber  and  Timberlands  are  comprised  of  the  following   (amounts  in
     thousands):


                                                      2001     2000

                Timberlands                         $4,967   $4,528
                Timber-deferred cultivation costs    4,996    4,545
                                                    ------   ------

                Timber and Timberlands              $9,963   $9,073
                                                    ======   ======

     Amortization  of deferred  cultivation  costs was  approximately  $626,000,
     $742,000 and $928,000 for the years ended December 31, 2001, 2000 and 1999,
     respectively.




                                       9
<PAGE>


6.   NOTES PAYABLE

     Notes payable under various agreements consist of the following (amounts in
     thousands):





                                                                 2001      2000

     U.S. bank loan                                           $ 6,700   $ 6,825

     Ecuadorian bank loans, payable in U.S. dollars, due
     within one year from the origination date, with
     interest rates between 10.25% and 10.50% in 2001 and
     9.87% and 18.0% in 2000                                    2,000     3,780
                                                              -------   -------
     Notes payable                                             $ 8,700   $10,605
                                                               =======   =======



     In  January  2001,  the  Company  signed a new  $16.5  million,  three-year
     domestic  loan  facility.  Borrowings  under  the line are  secured  by the
     Company's  domestic  accounts  receivable  and  inventory.  The  amount  of
     eligible  borrowings is based on a formula of eligible accounts  receivable
     and eligible inventory. The agreement contains two financial covenants (net
     worth and debt service  requirements) as well as non-financial  affirmative
     and negative covenants,  and limits the amount of dividends the Company may
     declare. The Company is also required to pay a commitment fee on the unused
     portion of its credit line on a quarterly  basis. At the Company's  option,
     all or a portion of the amounts  outstanding  may be tied to the prime rate
     (prime  less  3/4%,  4.00%  and  8.75%  at  December  31,  2001  and  2000,
     respectively) or LIBOR plus 1.50% (3.64% and 8.28% at December 31, 2001 and
     2000, respectively).  The Company was in compliance with all loan covenants
     at December 31, 2001.  Although by its terms the loan does not expire until
     2003, the Company has classified the borrowings as a current liability. The
     loan facility was structured to finance  working capital  requirements  and
     repayments  may be required at any time based on the formula  contained  in
     the loan  agreement  comparing  the  borrowing  base of  eligible  accounts
     receivable and inventory to outstanding borrowings.

     At December  31,  2001,  the Company had a line of credit  available  under
     Ecuadorian  borrowing  arrangements of $4,000,000,  of which  approximately
     $2,000,000 was unused.  Borrowings under the line are secured by a mortgage
     on  certain  land and  buildings  and a  negative  pledge  against  certain
     machinery.

     Additionally,  at December 31, 2001, under European borrowing arrangements,
     the Company had lines of credit  amounting to  approximately  $682,000,  of
     which  $514,000  was  unused,  and  foreign  exchange  facilities  totaling
     approximately $869,000.

     The weighted  average  interest rate on borrowings  outstanding at December
     31, 2001 and 2000 was approximately 5.2% and 10.1%, respectively.




                                       10
<PAGE>


7.   LONG-TERM DEBT

     Long-term debt consists of the following (amounts in thousands):


                                                                2001     2000
     Notes with interest rates between 4.0% and 6.4%, due at
     various dates through 2004                                $  63    $  90

     Equipment loan                                              352       --
                                                               -----    -----
                                                                 415       90

     Less current portion                                       (113)     (44)
                                                               -----    -----

     Long-term debt                                            $ 302    $  46
                                                               =====    =====


     In  September  2001,  the Company  obtained a $370,000  loan to finance the
     previous  purchase  of  equipment.  The  loan  is  secured  by the  related
     equipment,  and is repayable in equal  monthly  principal  installments  of
     approximately  $6,167 over a five-year  period . The loan bears interest at
     the 30 day LIBOR rate.  The proceeds of this loan were used  simultaneously
     to reduce the Company's working capital debt.

     The  aggregate  maturities  of  long-term  debt at December 31, 2001 are as
     follows (amounts in thousands):

                                              2002        $113
                                              2003          92
                                              2004          81
                                              2005          74
                                              2006          55
                                                          ----

                                                          $415
                                                          ====




                                       11
<PAGE>


8.   INCOME TAXES

     Income before income taxes is comprised of (amounts in thousands):

                                               2001       2000        1999

                                Domestic    $ 1,889    $ 4,651     $ 3,566
                                Foreign         434        (77)        302
                                            -------    -------     -------

                                Total       $ 2,323    $ 4,574     $ 3,868
                                            =======    =======     =======




     The  provision  for income  taxes  consists  of the  following  (amounts in
     thousands):


                                                 2001        2000        1999

                                Federal:
                                  Current     $   385     $ 1,732     $ 1,049
                                  Deferred         23
                                                             (327)       (176)
                                State:
                                  Current          37         288         154
                                  Deferred          4         (57)         (4)
                                Foreign           292          56          29
                                              -------     -------     -------

                                Total         $   741     $ 1,692     $ 1,052
                                              =======     =======     =======



     The  reconciliation  between  the  Company's  effective  tax  rate  and the
     statutory Federal tax rate is as follows:


                                                 2001        2000        1999

   Statutory Federal tax rate                    35.0%       35.0%       35.0%
   Increase (decrease) in taxes resulting
   from:
   Foreign income - effect of rates
   differing from statutory
   rates, effect of nontaxable exchange
   gains and losses and foreign losses
   producing no current benefit                  (4.1)        1.8        (2.0)
   State taxes, net of Federal income tax
   benefit                                        1.2         3.3         2.6
   Foreign tax credits                            0.0         0.0        (4.9)
   Other - net                                   (0.3)       (3.1)       (3.5)
                                                 ----        ----        ----

   Effective tax rate                            31.8%       37.0%       27.2%
                                                 ====        ====        ====




                                       12
<PAGE>


     Significant components of the Company's deferred tax assets and liabilities
     are as follows (amounts in thousands):


                                                 2001      2000
  Current assets (liabilities):
    Inventory capitalization                    $ 270     $ 237
    Unexpired insurance                          (251)     (177)
    Reserve amounts not currently deductible      166       210
    Other - net                                    15        59
                                                -----     -----
  Total current asset, net                      $ 200     $ 329
                                                =====     =====

  Noncurrent assets:
    Capital lease                               $  16     $  39
    Deferred compensation                         399       243
    Other                                         307       338
    Foreign tax loss carryforwards                554       166
    Less valuation allowance                     (554)     (166)
                                                -----     -----
  Total noncurrent asset, net                   $ 722     $ 620
                                                =====     =====



     As of  December  31,  2001  and  2000,  the  Company  had a full  valuation
     allowance  recorded against its foreign tax loss  carryforwards  related to
     certain Ecuadorean and European  subsidiaries.  Management believes that it
     is more  likely  than not  that the  remaining  carryforwards  will  expire
     unutilized.

     The total current and noncurrent  amounts  presented  above are included in
     other assets (current and noncurrent) in the consolidated balance sheets.

     The  Company  has not  accrued  Federal  income  taxes on the equity in the
     undistributed  earnings  of its  foreign  subsidiaries,  which  amounted to
     approximately  $8,457,000  at December 31, 2001,  because such earnings are
     permanently reinvested. It is not practicable to estimate the tax liability
     that might arise if these earnings were remitted.



                                       13
<PAGE>


9.   EMPLOYEE BENEFIT PLANS

     The Company has a  profit-sharing  plan under which an annual  contribution
     may be paid from  accumulated  profits  at the  discretion  of the Board of
     Directors  for the benefit of  eligible  employees  upon their  retirement.
     Contributions  to  this  plan  by the  Company  amounted  to  approximately
     $179,000,  $417,000  and  $329,000  in 2001,  2000 and 1999,  respectively.
     Additionally,  the plan allows for all participants to defer between 1% and
     15% of their salary.  Amounts deferred are paid to the trustee of the plan.
     The plan does not match employee contributions.

     The Company  adopted a  non-qualified  deferred  compensation  plan for the
     benefit of certain  eligible  employees.  The plan allows  participants  to
     defer up to 100% of their  compensation.  The Company  does not  contribute
     into the plan. The plan is not an employee  pension benefit plan as defined
     by Section 3(2) of the Employment  Retirement  Income  Security Act of 1974
     ("ERISA"),  and is not  qualified  under  Section  401(a)  of the  Internal
     Revenue  Code of 1986,  as  amended  (the  "Code").  As a result,  employee
     contributions are not protected against risk of loss to the Company. Due to
     the fact that this is a  non-qualified  plan,  the value of the plan assets
     are  maintained  on the Company's  consolidated  balance sheet along with a
     liability to the plan participants.  Fluctuations in the fair market values
     of the  shares of the  optioned  securities  are  recognized  in the income
     statement as other income and  expense,  net,  which is offset by a similar
     change in  selling,  general  and  administrative  expense.  The assets and
     liabilities  recorded on the Company's  consolidated balance sheet are also
     impacted by changes in the fair value of the investments. The value of plan
     assets and liabilities recorded in the Company's consolidated balance sheet
     at December 31, 2001 and 2000 was $914,000 and $650,000, respectively.

     The non-qualified  deferred compensation plan does not fall under the scope
     of either APB Opinion No. 25, Accounting for Stock Issued to Employees (APB
     No. 25), or FASB Statement No. 123, Accounting for Stock Based Compensation
     (SFAS 123),  as both of these  standards  provide  guidance  for  employers
     compensating their employees by the employer company issuing its own equity
     instruments.

     Certain  employees of the  Company's  Ecuadorian  subsidiary  companies are
     covered by termination and retirement  plans  incorporated  under statutory
     requirements of labor laws and collective bargaining  agreements.  Included
     in  the  accompanying   consolidated  balance  sheets  are  union  employee
     termination  benefits which  approximate  unpaid vested benefits under such
     plans.  The amount of benefits to be received by an employee is established
     by the collective  bargaining  agreements and is based on length of service
     and compensation. Provisions of approximately $102,000, $22,000 and $27,000
     were charged to income during 2001, 2000 and 1999, respectively.

     The Company  participates  in a  multiemployer  pension  plan for the union
     employees  at  the   Northvale,   New  Jersey   facility.   Provisions   of
     approximately $152,000, $174,000 and $200,000 were charged to income during
     2001, 2000 and 1999, respectively.


                                       14
<PAGE>


10.  LEASES

     The Company  leases its primary U.S.  manufacturing  facility in Northvale,
     New Jersey under a long-term  capital lease agreement that expires in 2002.
     During 2000,  the Company  signed a new lease  agreement for these premises
     that will begin at the expiration of the existing lease and expire in 2010.
     The current and new lease both provide that the Company pay all real estate
     taxes, maintenance and insurance relating to the facilities.  The new lease
     also contains a purchase option subject to certain terms and conditions and
     a five-year renewal option.

     The Company also has operating  lease  agreements  for warehouse and office
     space in the United States and Europe. The longest lease obligation extends
     to 2015.  Certain leases contain renewal options and generally  require the
     Company to pay other facility-related costs such as taxes,  maintenance and
     insurance.  Rent expense under these operating leases amounted to $814,000,
     $622,000 and $502,000 in 2001, 2000 and 1999, respectively.

     Future  minimum lease payment  obligations as of December 31, 2001, for the
     capital lease described above, as well as operating leases,  are as follows
     (amounts in thousands):

                                                        Capital   Operating
      Year                                                Lease     Leases

      2002                                               $ 82      $  1,191
      2003                                                 --         1,321
      2004                                                 --         1,221
      2005                                                 --         1,150
      2006                                                 --         1,167
      Thereafter                                           --         2,735
                                                        -----      --------

      Minimum lease payments                               82      $  8,785
                                                        =====      ========


      Less amounts representing interest                   --
                                                        -----

      Capital lease obligation                           $ 82
                                                         ====


                                       15
<PAGE>


11.  SEGMENT INFORMATION

     The Company and its subsidiaries operate in two segments, as a manufacturer
     and supplier of  structural  core  materials in composite  applications  to
     various  industries and in the seafood industry,  as a shrimp producer and,
     for the first nine months of 2001, as a seafood importer.  The segments are
     managed and reported  separately because of the difference in products they
     produce and markets they serve. The accounting policies of the segments are
     the  same as those  described  in the  summary  of  significant  accounting
     policies.  The Company  evaluates  performance  based on operating  income,
     i.e.,  results of  operations  before  interest,  income  taxes and foreign
     exchange gains and losses. There are no intersegment sales.

     No single customer provided more than 10% of the Company's revenue in 2001,
     2000 or 1999.

     Information about the Company's operations by segment is as follows:
<TABLE>
<CAPTION>

                                                                      (In Thousands)
                                                         2001         2000         1999
<S>                                                  <C>          <C>          <C>
Net sales to unaffiliated customers

Core materials segment                               $ 57,871     $ 63,175     $ 58,938
Seafood segment                                        20,197       25,885       27,089
                                                     --------     --------     --------

Total net sales                                      $ 78,068     $ 89,060     $ 86,027
                                                     ========     ========     ========

Operating income (loss)

Core materials segment                               $  5,333     $  7,758     $  4,569
Seafood segment                                        (2,059)      (1,927)         976
                                                     --------     --------     --------

Total operating income                               $  3,274     $  5,831     $  5,545
                                                     ========     ========     ========


Identifiable assets

Core materials segment                               $ 45,450     $ 39,023     $ 35,728
Seafood segment                                        10,332       18,508       17,177
                                                     --------     --------     --------

Total identifiable assets                            $ 55,782     $ 57,531     $ 52,905
                                                     ========     ========     ========


Capital expenditures, including timberlands
and capital leases

Core materials segment                                $ 3,448      $ 2,818      $ 2,197
Seafood segment                                           295          590        1,271
                                                     --------     --------     --------

Total capital expenditures                            $ 3,743      $ 3,408      $ 3,468
                                                     ========     ========     ========

</TABLE>


                                       16
<PAGE>


     Information  pertaining to the Company's operations in different geographic
     areas is as follows:


                                               (In Thousands)
                                          2001       2000       1999

Net sales to unaffiliated customers

United States - domestic               $56,060    $71,534    $65,293
United States - export                   7,311      7,434     11,263
Ecuador                                    160         47         87
Europe                                  14,537     10,045      9,384
                                       -------    -------    -------
Total net sales                        $78,068    $89,060    $86,027
                                       =======    =======    =======




Identifiable assets

United States                          $22,160    $27,540    $24,781
Ecuador                                 27,252     24,964     23,957
Europe                                   6,225      4,978      4,167
Japan, Uruguay                             145         49         --
                                       -------    -------    -------

Total identifiable assets              $55,782    $57,531    $52,905
                                       =======    =======    =======


                                       17
<PAGE>


12.  FINANCIAL INSTRUMENTS

     Effective  January 1, 2001,  the Company  adopted  Statement  of  Financial
     Accounting   Standards   ("SFAS")  No.  133,   Accounting   for  Derivative
     Instruments and Hedging Activities,  as amended by SFAS 137, Accounting for
     Derivative  Instruments and Hedging  Activities - Deferral of the Effective
     Date of FASB  Statement No. 133, and SFAS No. 138,  Accounting  for Certain
     Derivative  Instruments  and Certain  Hedging  Activities - an amendment of
     FASB Statement No. 133 (collectively "SFAS 133"). SFAS 133 requires that an
     entity  recognize all derivatives as either assets or liabilities  measured
     at fair value and establishes criteria for designation and effectiveness of
     hedging relationships. For derivatives designated as fair value hedges, the
     changes in the fair value of both the derivative  instrument and the hedged
     item are  recorded in earnings.  For  derivatives  designated  as cash flow
     hedges,  the effective  portions of changes in fair value of the derivative
     are reported in other  comprehensive  income  ("OCI") and are  subsequently
     reclassified into earnings when the hedged item affects  earnings.  Changes
     in  fair  value  of  derivative   instruments  not  designated  as  hedging
     instruments and  ineffective  portions of hedges are recognized in earnings
     in the current period. Adoption of the new accounting standards resulted in
     an after-tax reduction in OCI of approximately $16,000.

     The Company is exposed to fluctuations in foreign currency  exchange rates,
     interest  rates  and raw  material  prices.  To  manage  certain  of  these
     exposures,  the Company uses derivative instruments including interest rate
     swaps and forward contracts. Derivative instruments used by the Company are
     considered  risk  management   tools  and  are  not  used  for  trading  or
     speculative purposes.

     All relationships  between hedging instruments and hedged items, as well as
     its risk management  objective and strategy for  undertaking  various hedge
     transactions are formally  documented.  The Company  formally  assesses the
     effectiveness of its hedging  relationships both at the hedge inception and
     on at least a  quarterly  basis  in  accordance  with  its risk  management
     policy.

     The Company  purchases  certain raw materials in currencies  other than the
     U.S.  dollar.  To reduce  currency  exchange  risk on these  firm  purchase
     commitments,  the Company enters into foreign currency  forward  contracts.
     The  forward  contracts  are  designated  as fair value  hedges of the firm
     commitments  and do not extend  beyond 24  months.  The gains and losses on
     those  derivative  instruments  are  reported in cost of products  sold and
     largely offset gains and losses on the purchase commitments.  The amount of
     ineffectiveness recorded in net income for the year ended December 31, 2001
     was not  material.  Currently,  the  Company  does not hold any  derivative
     contracts  that hedge its net  investments in foreign  operations,  but may
     consider such strategies in the future.

     The Company utilizes interest rate swaps to hedge the Company's exposure to
     movement  in  interest  rates.  At  December  31,  2001,  the Company had a
     one-year and a two-year interest rate swap that converted $2 million and $4
     million of  outstanding  borrowings  from a floating to a fixed  rate.  The
     swaps  resulted in fixed rates of 6.0% and 6.50%.  The swaps expire on June
     1, 2002 and 2003.  The  interest  rate  swaps are  designated  as cash flow
     hedges  of  the  variability  of  the  forecasted  interest  payments.  The
     effective  portion of the change in fair value of the  interest  rate swaps
     was  recorded in OCI.  The  ineffectiveness  relating to the hedges was not
     material.  Amounts  accumulated in OCI are reclassified  into earnings when
     interest expense on the borrowings is recorded.  Approximately  $133,000 of
     the amount  recorded in accumulated  OCI is expected to be  reclassified to
     interest expense during the next twelve months.


                                       18
<PAGE>


13.  SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

     The following is a summary of quarterly  financial data for the years ended
     December  31,  2001  and 2000  (dollars  in  thousands,  except  per  share
     amounts):



                                                  Quarter
                                  -------------------------------------------
                                   1st         2nd        3rd         4th
                                  --------  ---------- ----------  ----------
                  2001
      Net sales                   $21,151     $21,488    $19,509     $15,920
      Operating income                808         745      1,072         649
      Net income                      346         218        631         387
      Basic and diluted earnings
          per common share          $0.14       $0.09      $0.25       $0.16
                                  ========  ========== ==========  ==========

                  2000
      Net sales                   $21,225     $23,911    $22,213     $21,711
      Operating income              1,459       1,524      1,266       1,582
      Net income                      765         808        651         658
      Basic and diluted earnings
          per common share          $0.30       $0.32      $0.26       $0.26
                                  ========  ========== ==========  ==========


14.  COMMITMENTS

     In March 2001, the Company entered into an agreement with Jacques, Jean and
     Bernard Kohn, all stockholders of the Company.  The agreement  requires the
     Company to purchase,  in five equal installments,  the common stock held by
     Bernard Kohn. The purchases are subject to the  determination  by the Board
     of Directors  that the Company has  sufficient  available  capital.  If the
     Company  cannot  consummate  the  purchase,  or  cause  a  third  party  to
     consummate the purchase,  the installments  are deferred.  In the event any
     installments are deferred,  Bernard Kohn has the right to sell the deferred
     shares in the open market.  Purchase of the stock by a third party does not
     relieve the Company  from its  obligation  for future  purchases  under the
     agreement.

     Pursuant to the agreement,  the Company  completed two purchases,  each for
     66,439 shares,  for  approximately  $506,000 in March 2001, and $469,000 in
     January  2002.  The purchase  price of the shares for all  installments  is
     based on the  average  closing  prices for the stock for the 20-day  period
     prior to the purchase date specified in the agreement.

     The Kohn  individuals  have  agreed to vote their  shares as a single  unit
     during the term of the agreement.  The agreement  also  terminated a voting
     trust that existed among the Kohn shareholders.


                                     ******

                                       19
<PAGE>

                                                                     Schedule II
                       BALTEK CORPORATION AND SUBSIDIARIES

        FINANCIAL STATEMENT SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
          EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
                              Dollars in thousands

                                            Additions
                                            Charged
                               Balance at       to                Balance
                               Beginning   Costs and              at End
                Description     of Year     Expenses  Deductions  of Year

YEAR ENDED DECEMBER 31, 2001:
  Allowance for doubtful
    accounts receivable           $275        $ 15       $ 30       $260
                                  ====        ====       ====       ====

  Inventory                       $380        $ --       $180       $200
                                  ====        ====       ====       ====

YEAR ENDED DECEMBER 31, 2000:
  Allowance for doubtful
    accounts receivable           $175        $129       $ 29       $275
                                  ====        ====       ====       ====

  Inventory                       $150        $230       $ --       $380
                                  ====        ====       ====       ====

YEAR ENDED DECEMBER 31, 1999:
  Allowance for doubtful
    accounts receivable           $144        $ 66       $ 35       $175
                                  ====        ====       ====       ====

  Inventory                       $266        $ --       $116       $150
                                  ====        ====       ====       ====




                                       20

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>7
<FILENAME>exhibit21.txt
<TEXT>



                                   EXHIBIT 21

BALTEK CORPORATION AND SUBSIDIARIES
Subsidiaries of Registrant
December 31, 2001
                                                              Voting
                                           Where              Securities
                                           Incorporated       Owned

Balmanta S.A. (2)                          Ecuador            100%
Compania Ecuatoriana de Balsa, S.A.        Ecuador            100%
Maderas Secas C.A. (2)                     Ecuador            100%
Marines C.A.(6)                            Ecuador            100%
Plantaciones De Balsa, S.A. (3)            Ecuador            100%
Productos del Pacifico, S.A.               Ecuador            100%
Recorcholis, S.A. (8)                      Ecuador            100%
Servicios Contables, S.A. (5)              Ecuador            100%
Balsa Ecuador Lumber Corporation           New Jersey         100%
Balsa Development Corporation              New Jersey         100%
Sanlam Corporation                         New York           100%
Baltek Foreign Sales Corporation           U.S. Virgin
                                           Islands            100%
Crustacea Corporation                      Delaware           100%
Cryogenic Structures Corporation           Delaware           94%   (1)
Baltek International Corporation           Delaware           100%
Baltek Mercosur, L.L.C.                    New Jersey         100%
<PAGE>

                                   EXHIBIT 21
                                   (Continued)

BALTEK CORPORATION AND SUBSIDIARIES
Subsidiaries of Registrant
December 31, 2001
                                                           Voting
                                           Where           Securities
                                           Incorporated    Owned
Pacific Timber Ltd. (4)                    Great Britain   100% (1)
Baltek GmbH                                Germany         100% (1)
Baltek, S.A.                               France          100% (1)
Baltek, Ltd.                               Great Britain   100% (1)
Baltek Scandinavia Aps (7)                 Denmark         100% (1)

(1)  Includes qualifying shares in the names of individuals  associated with the
     Company.

(2)  Wholly-owned  by Productos del Pacifico,  S.A. and Compania  Ecuatoriana de
     Balsa, S.A.

(3)  Wholly-owned by Baltek  Corporation,  Compania  Ecuatoriana de Balsa,  S.A,
     Productos del Pacifico,  S.A.,  Maderas  Secas,  C.A.,  Balmanta,  S.A. and
     Servicios Contables, S.A.

(4)  Wholly-owned by Baltek Ltd.

(5)  Wholly-owned by Compania  Ecuatoriana de Balsa,  S.A.,  Maderas Secas C.A.,
     Balmanta, S.A. and Productos del Pacifico, S.A.

(6)  Wholly-owned by Baltek Corporation, Maderas Secas C.A. and Balmanta, S.A.

(7)  Wholly-owned by Baltek, S.A.

(8)  Wholly-owned by Marines C.A.

The above  subsidiaries  are included in the  Company's  consolidated  financial
statements.


</TEXT>
</DOCUMENT>
</SUBMISSION>
