Sabate to Build Facility for Extracting TCA From Raw Cork; Construction to Start This Month; Specially-Treated Closures to Be Available by 2005.

Business Editors

NAPA, Calif.--(BUSINESS WIRE)--May 14, 2003

Sabate USA announced today that parent company Sabate Diosos Group, the world's leading global barrel supplier and number two supplier of natural cork and cork-based wine closures, begins construction this month on a near-27,000 sq. foot facility in Spain where Supercritical CO2 extraction will be used to remove undesirable compounds from cork before converting the raw material into a range of cork closure products.

The technology, developed jointly by Sabate Diosos and the French Atomic Energy Commission (CEA), is designed to selectively remove from raw cork certain chemical compounds, including chloroanisoles (2,4,6 Trichloroanisole), that can contribute to undesirable sensory deviations in bottled wines. The effectiveness of this process has been validated in the laboratory, follow-up research and semi-industrial trials. Wines sealed with prototype closures treated with this process won top sensory and analytical ratings from two panels of independent experts who took part in rigorous blind tastings in the U.K. and U.S. in 2001 and 2002.

"We believe this is the first time that a technical process enables the extraction of TCA from cork," said Nicolas Serpette, Sabate Diosos Director of Communication, who is addressing the Vineyard & Winery Management magazine "Quality Control" Symposium today in Santa Rosa, Calif., to explain the new developments.

The cork treatment facility will be located in San Vicente De Alcantara, Province of Extremadura, Spain, near another Sabate Diosos cork processing facility. The new plant will treat up to 2,500 tons of raw cork annually. The plant is expected to be fully operational in early 2005 and will expand as demand grows for the specially treated closures. It is expected to employ around 35 technicians.

The estimated cost of facility construction is 13 million Euros (approximately $14.8 million U.S.). Sabate Diosos executives are confident that the investment will demonstrate the continuing viability of cork as a wine closure as well as the company's commitment to meeting the evolving needs of a competitive global wine market.

"We know from customer input that no single wine closure is perfectly suited to every winemaker or every wine," said Serpette. "We also know that many consumers prefer cork closures, and we are committed to producing the very best cork products possible. Based on this new scientific process, Sabate Diosos will be able to deliver a range of cork-based closures meeting winemakers' diverse technical and marketing needs."

The Supercritical CO2 extraction process is applied to raw and boiled cork before converting the treated material into natural and technical cork-based closures for still and sparkling wines. Selected Sabate Diosos customers are now testing prototype closures that were treated with this process. A full-scale market launch is contemplated within the next two years.

About Sabate Diosos

As the leading global suppliers of oak barrels, and the world's second largest supplier of cork-based wine closures, the Sabate Diosos Group offers winemakers a comprehensive array of value-added services.