Re Joint Venture

Stanelco PLC
05 July 2005


5th July 2005

                   Stanelco plc ('Stanelco' or 'the Company')

 Biotec Joint Venture with European Packaging Giant SP Metal S.A. ('SP Metal')


Stanelco plc, the RF (radio frequency) applications group, is pleased to
announce that it has binding Heads of Agreement with SP Metal the leading
European manufacturer of household packaging products, for the sale of a 50%
interest in Biotec Holdings GmbH and subsidiaries ('Biotec'). Payment to
Stanelco will be satisfied through an initial consideration of US$6.25m in cash
with a further US$6.25m to be paid in two equal instalments payable on the 12th
and 24th months after closing.  The deferred payments are not subject to the
satisfaction of performance criteria.


The consideration received by Stanelco will be used to fund 50% of the Biotec
acquisition as announced by Stanelco on 6th June 2005.


The Board of Stanelco believe this is an excellent demonstration of how Stanelco
plans to use joint ventures with other market leaders in related fields in order
to bring immediate value to both the Company and its shareholders. The Company
will be pursuing this approach proactively in the USA with Starpol 2000 and
other Biotec products.


Under the new ownership structure, Biotec will be run as a 50:50 joint venture
with Stanelco and SP Metal leveraging off Biotec's technology to exploit their
different markets. Biotec was conditionally acquired by Stanelco for US$25m
payable over a 24 month period. The disposal of the 50% interest in Biotec is
conditional on shareholder approval being given to the resolution approving
Biotec's acquisition by Stanelco, such resolution to be included in a separate
notice of an EGM contained in a circular to be posted to shareholders in due
course. The disposal of 50% interest in Biotec is further subject to Stanelco
and SP Metal entering into a final form Joint Venture agreement in relation to
Biotec. The Heads of Agreement are conditional upon final approval by EKI (E.
Khashoggi Industries LLC).


SP Metal will be able to provide orders for Biotec products that will contribute
to its overheads, enabling it to concentrate further resource on research and
development. Stanelco will retain a golden share in Biotec until 31st December
2009 which will give it the right to break any deadlock arising in material
matters affecting the Joint Venture. Stanelco will also retain all the
manufacturing rights to Modified Atmosphere Packaging ('MAP') materials.


SP Metal was founded in 1976, is a pan-European leader in institutional
catering, agricultural and household packaging with 1,300 employees, 12
factories across Europe in Italy, Denmark, France, Spain, UK, Netherlands and in
the Czech Republic and has a turnover of EUR 300m. SP Metal produces 140,000
tonnes of plastic film per year, 100,000 tonnes for refuse bags, 16,000 tonnes
for shopping bags, 13,000 tonnes for freezer bags and 11,000 tonnes for other
industrial films and household products. SP Metal also produces 15,000 tonnes of
aluminium foil and containers per annum.


SP Metal has been actively looking for innovative, environmentally responsible
packaging materials. The Biotec Joint Venture delivers a solution to that
search.


Biotec is one of the world's leading exponents of starch technology and made a
pre-tax profit of £0.1m in the year to 31st December 2004 and had gross assets
of £2.8m at the year then ended. Biotec also has a considerable intellectual
property portfolio, including many patents, extending to uses in pharmaceutical
and edible applications. It also has ranges of products that are ready for
commercialisation within the food and beverage industries.


Early indications in the food rigid tray area suggest that Stanelco's Starpol
2000 range of materials, produced by Biotec, will be able to significantly
undercut the price of polyester (APET, clear trays and CPET, microwavable trays)
whilst providing the necessary gas barrier for MAP.


Biotec's proprietary pharmaceutical grade film is suited for applications where
it replaces conventional polymers such as gelatine. Depending upon the
specification the film has a cost base of between US$5 to US$8 per kilogram,
offering customers significant cost savings when compared to gelatine and other
materials which it may replace. In addition, being a mono material, waste
generated during manufacture can often be immediately re-used.


The starch products from Biotec are currently used by Stanelco in the following
projects: StarpolTM starch blend films used in CradleWrapTM packaging; sheet for
making food trays; starch film for air pillows; starch pellets for food trays;
and starch film for edible packaging. Biotec will also be a supplier of film to
the InGel capsule project.


GREENSEAL trials and commercialisation continue to proceed well. The
introduction of Starpol 2000 will permit the replacement of materials which are
currently unable to be welded by GREENSEAL technology, for example polypropylene
('PP'). Starpol 2000 can be welded, is biodegradable and is price competitive.


Ian Balchin, CEO of Stanelco said:


'We are delighted to be working with SP Metal, our businesses are extremely
complimentary.


'This JV is consistent with Stanelco's strategy of partnering with major
corporations to maximise revenues arising out of our Intellectual Property
assets, and getting our technology out to market .


'This is another step towards our goal of becoming one of the world's leading
exponents of viable, alternative, environmentally responsible packaging 
methods.'


John Persenda, Chairman and CEO of SP Metal SA said:


'We are extremely pleased to join forces with Stanelco in this Joint Venture
which matches the environmental and product innovation commitments which have
been consistent driving factors in our company during the past thirty years.
This will help take our company even further towards our goal of generalising
the use of natural renewable raw materials in our product offerings.'


                                      Ends


For further information please contact:


Ian Balchin, Chief Executive           John Persenda, CEO

Stanelco PLC                           Isabelle Tharaud, Deputy CEO, SP Metal SA

Tel: [phone]                Tel: [phone]


Jonathon Brill/Billy Clegg             Public Relations Department

Financial Dynamics                     Marielle Cayron-His

Tel: [phone]               Tel: [phone]


Notes to Editors:


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 GREENSEALTM Food tray lidding technology, STARPOLTM 
(starch/ pva blended material), FrogPackTM high impact low cost packaging
format, CradleWrapTM range of  biodegradable air cushion packaging, SolutapeTM
100% watersoluble films and adhesives, Biodegradable Airbag (void fill)
packaging, water-soluble detergent capsules, edible sachets and waste packing.


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