Re Agreement

Surface Transforms PLC
28 June 2004


RNS Release

28 June 2004

          Surface Transforms signs a Cooperative Agreement with METEK
               (Metallverarbeitung GmbH) of Meckenheim, Germany

Surface Transforms plc ('the Company'), makers of high-technology carbon fibre 
reinforced ceramic (CFRC) materials for the aerospace and high-performance 
automotive markets, has signed a two-year Cooperative Agreement with German 
automotive parts supplier METEK.  The agreement with METEK, one of Europe's 
leading suppliers of braking systems to the automotive industry and owner of 
Advanced Materials Lanxide LLC of the USA, is for the design, development and 
supply of carbon ceramic brake discs and pads to the European automotive 
industry.

Under the terms of the agreement, the Company expects to generate revenues of
Euro 60,000 during the initial testing and development phase of the cooperation.
During later phases of the contract, further income will be derived from road
car model specific licence and supply agreements.

Over the past twelve months Surface Transforms and METEK have completed an 
initial period of evaluation and road car testing of carbon ceramic brake discs
and pads.  The tests, undertaken at METEK, show that CFRC materials give a 
significant improvement in performance over traditional steel brake discs and 
organic pads.  A 60% reduction in weight and a 50% improvement on stopping force 
has been achieved. The three-dimensional structure of the carbon ceramic discs 
contributes to very good wear characteristics whilst retaining significant disc 
integrity when compared to the competition. These properties have also been 
demonstrated in the wear and integrity tests undertaken on Surface Transforms' 
aircraft brake discs.

The European steel brake disc and pad market is currently estimated to be 
360 million units per annum at a supplier market value of Euro 3.5 billion per 
annum. The directors of Surface Transforms estimate that once carbon ceramic 
brake technology is accepted by the automotive majors initially up to 1-3% of 
the market (principally a proportion of the executive and luxury segments of the 
road car market) will adopt the new technology brakes with their superior 
braking, handling and environmental performances.

The main points of the Cooperation Agreement, which is in three phases, are:

   •Phase 1: model specific road car development and testing

   •Phase 2: extensive model testing of the carbon ceramic braking system and
    finalisation of production disc and pad specifications

   •Phase 3: design, construction and commission of a carbon ceramic
    production plant at METEK, subsequent supply of brake discs by METEK to the
    automotive industry under licence agreement with Surface Transforms

Commenting on today's announcement, Managing Director of Surface Transforms, 
Julio Faria, said:

'This is tremendous news.  It has long been the Company's stated objective to 
supply parts to the automotive industry for high-performance vehicles. This 
first fully-commercial contract to provide METEK with brake discs and pads 
represents an important landmark for Surface Transforms, and is especially good 
news following on so recently from our prestigious contract with the UK Ministry 
of Defence to supply CFRC material for both body and vehicle armour.'

Enquiries, please contact:

Julio Faria                                    Neil Boom/Sophie Betts
Managing Director                              Gresham PR Ltd.
Surface Transforms plc                         020 7404 9000
01928 735 498

Johnny Townsend/Simon Clements
John East & Partners Limited.
020 7628 2200

Further Investor Relations information is available on the Armshare icon on 
www.surface-transforms.com
Further information on METEK can be accessed at its website www.metek-gmbh.de



                      This information is provided by RNS
            The company news service from the London Stock Exchange