AERT Receives $15 million IRB Approval for Springdale, Arkansas Expansion; Sales Continue to Increase.

SPRINGDALE, Ark.--(BUSINESS WIRE)--Nov. 5, 1998--Advanced Environmental Recycling Technologies, Inc. (Nasdaq: AERTA) ("AERT") announced that the Company has received formal approval from the City of Springdale, Arkansas, City Council for issuance of up to $15 million dollars in industrial revenue bonds for expansion of AERT's multi-purpose Springdale recycling and manufacturing facility. The long-term low-interest funding is intended to more than double the Company's polyethylene plastic recycling capacity in addition to tripling the facilities composite extrusion capacity.

According to Joe G. Brooks, president, "AERT has been working to attain additional long-term bond financing for over the past year."

"With our recent successful start-up of our fourth extrusion line at Springdale and the resultant increase in production and sales, we are pleased that our bond underwriter in conjunction with the City of Springdale is supporting AERT."

"The Company is continuing to increase production and sales and last week set another weekly production and sales record of $395,000, which surpasses the previous weekly sales record by approximately $40,000."

"This expansion will be the third-phase for the Company's new Springdale, Ark. facility and when completed will allow additional production capacity required for the Company to continue to increase sales in excess of $60 million dollars on an annualized basis," according to Brooks.

"Additional production capacity is nearing completion and will come on-line by the first of the year," stated Brooks.

"This will allow AERT shortly to attain sales levels in excess of $30 million dollars on an annualized basis by the first of the New Year." Completion and start-up of the third extrusion line in Springdale will complete phase two and will bring the Company's total extrusion capacity to six extrusion lines by the end of the first quarter of 1999.

The Springdale facility currently manufacturers products for the window and door and industrial flooring markets. With this expansion, AERT also intends to add additional decking capacity at the Springdale facility during the next year.

Advanced Environmental is a high growth company, which recycles polyethylene plastic and waste wood fibers into a growing line of engineered composite building materials. The products are marketed and sold under the trade names MoistureShield(R), Lifecycle(R) and ChoiceDek(TM).

Certain of the statements made in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning the timing of the expansion at the Springdale facility and previsions of revenue streams from all such production lines. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include the ability of the Company to timely and correctly execute its expansion and construction plans and other risks more fully described in the Company's Form 10-K for fiscal year 1997 and Form 10-Q for the period ended June 30, 1998. Additional information will be forthcoming in the near future.