Pre Close Update

Stanelco PLC 16 December 2005 16 December 2005 Stanelco plc ('Stanelco' or 'the Company') Pre Close Update Stanelco is today issuing a Pre Close Update prior to reporting its Preliminary Results to 31st October 2005, which are scheduled to be released in February 2006. GREENSEAL Stanelco has made significant progress in the development and commercialisation of its GREENSEAL technology. We are currently working with ASDA and four of its key suppliers to fulfil the initial stage of the ASDA contract. Current potential placements are expected to lead to orders in excess of 50 conversions with one supplier to ASDA. Another supplier is presently indicating a requirement for another 30 machines. In order to avoid suppliers having to shut off machines for retrofit during the busy Christmas period and to overcome any possible delays, the Company has acquired several MAP (Modified Atmosphere Packaging) machines to convert to operate GREENSEAL technology. These machines will be available to substitute suppliers' machines in production, removing any obstacles of production being periodically offline. In addition, the Company is making significant progress with a number of OEM's to adopt GREENSEAL as an option. This is likely to lead to further opportunities of deliveries in parallel to the retro fit programme with ASDA. Interest in the GREENSEAL product remains high. Outside the UK, the Company remains in active negotiation with other major supermarket chains in both the US and Continental Europe and it is hoped the results of these discussions will impact the current financial year. The first US specification machines are now on their way to the United States to our partners Advanced Technologies. Biotec Sales of Biotec materials (Biodegradable, compostible and edible polymers based upon starch) are continuing to both SPhere (formerly SP Metal) and other customers. The relationship with SPhere is working well. We are on schedule to substantially increase in 2006 the production capacity of these materials - including Starpol to 20,000 tonnes by early 2007. In the US we have experienced a great appetite for Biotec products and are now in discussions with a number of major US companies across a range of consumer sectors on both Biotec packaging alone as well as in conjunction with the GREENSEAL product. Sustainability is increasingly becoming a key consideration for US companies as they look to reduce the use of oil based products. Pressure from environmental groups on the use of plastic is coming under increasing scrutiny by Governments. The recent announcement in France that plastic bags will be banned by 2010 has both demonstrated the potential value of the Biotec acquisition and at the same time opened up this market opportunity for us. We continue to work on a full range of biodegradable materials to replace plastics at the same or lower cost. Welsh Grant Funding We are pleased to announce that we have received a substantial offer of Regional Selective Assistance funding in relation to a proposed production and R&D facility in Blaenau Gwent. The offer of funding will allow Stanelco to invest in creating a c.£3m production and materials development facility based upon Biotec's technologies for the primary purpose of substituting conventional plastic for packaging and other applications with biodegradable alternatives from replenishable sources such as starch. Cigarette Filters We announced our intention to dispose of our biodegradable starch-based cigarette filter technology acquired through the Biotec joint venture. Rothschild have been appointed to seek out interested parties and we expect this process to take a minimum of 6 months. The Board believes a successful sale of this technology should create significant value for shareholders. Quantum Finish The launch in Europe of Reckitt Benckiser's new automatic dishwashing product Finish Quantum (R) in addition to their increasing sales of Electrasol Gelpacs (R) in the same segment in the North American market is expected to contribute towards a growing royalty stream through our Aquasol subsidiary which contributed technology towards these products. ELECTRASOL, GELPACS, FINISH, QUANTUM, are trade marks of Reckitt Benckiser plc (RB.L) Frogpack A number of the distribution and manufacturing deals for Frogpack, (innovative protective transit packaging), have been restructured and we are now seeing an increase in the number of leads to sell FrogPack products. Carclo Stanelco jointly owns a patent with Carclo plc for injection moulded water soluble capsules for drug delivery and dietary supplements. We have made encouraging progress in the last few months with this technology. We are working closely with a customer who intends to use the technology in veterinary applications. High level discussions are underway with major drug delivery companies on the human application of the technology. Conclusion The current year has seen steady progress on a number of fronts. The Board believes that the Company will make further progress in 2006 and is increasingly well positioned to exploit its market leading technology and IP. - Ends - For further information, please contact: Martin Wagner, Chief Executive Stanelco PLC Tel: +44 (0)2380 867 100 Jonathon Brill/Billy Clegg Financial Dynamics Tel: +44 (0)20 7831 3113 About Stanelco plc The Stanelco Group of companies (the Group) has brought together expertise in radio frequency (RF) technology, RF applications and biodegradable material sciences to create a revolutionary range of packaging technologies. Stanelco's philosophy is that new products and processes must offer solutions and applications which: • give higher added value, • are greener, more environmentally sustainable than those they replace and • have protectable intellectual property rights. Stanelco will develop the products and processes to a demonstration stage and then work with partners in order to reach the markets; and under these circumstances Stanelco will usually seek to license its technology. Stanelco invests considerable time and resources in ensuring its technologies are protected via layers of patents wherever possible. In this way Stanelco believes it can minimise commercial risk and preserve the highest value for shareholders. The products offering the prospect of near term revenue generation are being given priority over the Group's resources. Stanelco was founded in 1953 and is a world leader in the development of radio frequency technologies for processing polymers for edible and packaging applications and the design and manufacture of optical fibre technology, induction heating and dielectric welding equipment. Stanelco's current developments include GREENSEAL Food tray lidding technology, STARPOL (starch / pva blended material), STARPOL 2000 (highly functional, low cost biodegradable packaging material with food contact approvals) FrogPack high impact low cost packaging format, CradleWrap range of biodegradable air cushion packaging, Soluble tape, 100% water-soluble films and adhesives, Biodegradable Airbag (void fill) packaging, edible hard-shell capsule technology, water-soluble detergent capsules, edible sachets and waste packing. GREENSEAL, STARPOL, FrogPack and CradleWrap are all trademarks of the Stanelco plc group. This information is provided by RNS The company news service from the London Stock Exchange
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