Stanelco Takes First Order for 100% Biodegradable Material in Europe; Partner Invests $25 Million in New Starpol Product.

ORLANDO, Fla. -- Stanelco Inc., the American subsidiary of British-based Stanelco Group (LSE:SEO), has received a conditional commitment from joint venture partner SP Metal to buy 10,000 metric tons of its new biodegradable resin material, Starpol 2000(TM), for $25 million a year.

The new starch-based material can be used in place of oil-based products, such as plastics, and will completely biodegrade in an active compost in approximately 60 days. The material can be used in sheet or film form for such diverse products as food containers, carrier bags, shopping bags and many other areas where high-grade plastic sheets are used.

This announcement comes on the heels of Stanelco's acquisition of Biotec Holding GMBH and subsidiaries (Biotec), one of the world's leading exponents of starch technology, in June 2005.

"This commitment demonstrates that the market for starch-based programs is set for significant growth," said Stephanie Morgan-Fisher, CEO, Stanelco Inc. "We look forward to the prospect of completing the acquisition in the next few weeks."

The starch-based resin material is compatible with most extruders and thermoformers currently used in manufacturing, and can quickly be employed by companies reliant on oil-based products without any capital investment. The biodegradable granulate can also be used in blown-film applications.

"As oil prices continue to spiral upward, Starpol is increasingly becoming more cost-competitive, and already in some cases is less expensive than its oil-based competitors," said Morgan-Fisher. "Landfill space is in short supply and governments are seeking alternatives to non-renewable, non-recyclable substances.

"Stanelco is currently in discussion with a number of multi-national organizations to discuss the supply and usage of considerable quantities in the United States and worldwide," added Morgan-Fisher. "It will be a matter of weeks before we are in large scale production, as the material has performed so well on existing equipment during recent trials."

Starpol 2000 is the latest in a series of advancements into the packaging industry by Stanelco. Earlier this year, Stanelco introduced its GREENSEAL(TM) Radio Frequency sealing process. The process enables mono materials like APET and CPET to be welded without the use of any laminates, thus lowering the costs of materials by up to 25 percent. GREENSEAL also welds through contaminate, increasing the successful seal rate to 99.9 percent - virtually eliminating leakers in the case-ready industry.

The two technologies work hand in hand with each other, now allowing companies to explore a completely new arena for unparalleled success in MAP packaging. Stanelco is speaking with a number of major food suppliers in North America and the United Kingdom.

About Stanelco Inc.

Stanelco Inc. is the US subsidiary of the Stanelco Group (LSE:SEO) , a company with its roots in using and developing radio frequency (RF) applications. Over the past two years it has been moving into environmentally sustainable packaging solutions.