PLNT Plantic Tech.

    RNS Number : 6419Y
  Plantic Technologies Limited
  09 July 2008
   

    9th JULY 2008

    PLANTIC TECHNOLOGIES LIMITED
    ("Plantic" or "the Company")

    Trading Update

    Plantic (AIM:PLNT), the technology company engaged in the development and commercialisation of a range of environmentally friendly
plastics from renewable resources, today provides an update on trading for the first half of 2008. 

    Plantic's novel polymer manufacturing technology is based on the use of high-amylose corn starch, a material derived from annual
harvesting of specialized (hybrid) corn. The unique chemical and film-forming properties of this type of cornstarch allow for development of
a range of applications across conventional plastics markets. In addition to being renewably sourced, users can take advantage of excellent
end-of-life properties such as biodegradability and compostability. 

    Plantic has several patents covering its technologies, formulations and applications. The Company's objective is to commercialise its
plastic technologies across a broad range of applications, with a particular focus on the packaging industry. Its first product, the
"Plantic tray" is sold commercially in the UK, Continental Europe, Australia and New Zealand. Injection Moulding resins are sold via DuPont
globally excluding Australia and New Zealand. 

    SUMMARY

    *     Total material sold in H1 2008 together with the forward order book for H2 2008 is more than double total material sold in FY 2007

    *     FY2008 sales are expected to be significantly higher than 2007 but may now be lower than previously expected, due to a certain
European brand owner project being delayed.
    *     FY 2008 losses will also be increased by approximately A$1m of unrealised foreign exchange losses, due to significant strength of
the Australian dollar
    *     Sales of material in H1 2008 is 50% higher than H1 2007
    *     The distribution agreement with DuPont extended to cover Japan
    *     High performance sheet launched at Interpack Exhibition in April : first orders received 
    *     Major orders received from DuPont in May and June, with delivery expected in H2 2008
    *     On track to achieve commercial sales of Film and Barrier resins in 2009
    *     Directors remain confident in long term growth prospects 
      OVERVIEW OF H1 2008

    Plantic today provides guidance on its performance for the 6 months ended 30 June 2008 and the outlook for 2008. Good progress has
continued to be made on all fronts, including sales of existing products, product development, manufacturing efficiencies and capacity and
engaging with new customers.  

    In the short term, two factors are impacting Plantic to the extent that our current targets for 2008 may be missed. The first involves a
large brand owner, who has committed to buy our material, has delayed the placing of their order, meaning that it will not be fulfilled in
this calendar year. The overall effect is that volumes for 2008 will be lower than we had previously expected, although we remain hopeful
that a considerable proportion of this shortfall may be made up through other contracts. 

    The second factor has been the growing strength of the Australian dollar, driven by the continuing resources boom. In fact, in just 6
months since the start of 2008, the Australian dollar has increased by almost 10% as against the US dollar. Plantic holds foreign currency
in Europe to fund the future European manufacturing expansion and this has resulted in an unrealised foreign exchange loss of approximately
A$1m.

    Nevertheless, the Directors of Plantic have good cause to be optimistic about the prospects for 2009 and beyond. The forward order book
for the second half of 2008 is very strong. Total volumes sold in 2008 are still expected to be significantly higher than in the previous
year. Our sales are also underpinned by the long term distribution agreement we have in place with DuPont, which in April 2008 was extended
to cover the significant Japanese market. Major orders were also received from DuPont in May and June 2008.

    PRODUCT DEVELOPMENT

    A significant component of our strategy for attracting new orders is the development of new products. Our aim is to offer users of
packaging material greater degrees of functionality, yet which also satisfy consumers' increasingly demanding criteria for biodegradability
of waste packaging at normal temperatures.

    To this end, we are working on a series of development projects for Film and Barrier resins in conjunction with major converters of
packaging materials. These remain a priority, with our objective at this stage of achieving commercial sales in the second half of 2009.
    We are working closely with DuPont on developing new grades of various Plantic materials, and this has already generated IP which is
owned by Plantic, to achieve improved impact strength of Plantic sheet using DuPont additives. Plantic High Performance sheet was also
launched at Interpack, and Plantic has already received its first orders for this new product. 
      MANUFACTURING

    A number of process improvements have been successfully implemented at our operations, further improving the quality and consistency of
Plantic materials.  Additional investments are also scheduled for the second half, which will both improve manufacturing efficiency and
decrease production costs.
    We also continue to make progress toward opening up a second manufacturing line in Europe, and are currently investigating several
options. The objective is to exploit further key European markets, at higher margins, and to meet projected medium to long term demand.  

    CURRENT TRADING & OUTLOOK

    We are pleased to report that a number of trials with major brand owners are currently taking place on our various products in Europe
and Asia. Not only does this provide us with confidence of further orders in the longer term, but we also believe there is a possibility of
some of these trials resulting in orders before the year end.

    We believe there is a strong basis for long term growth in sales and profits for this company as increasing numbers of major
organisations, not just in the retail sector, are recognising that their own customers want to be able to buy or use products whose
packaging can be disposed of in the knowledge that the environment is not being damaged.  

    FURTHER INFORMATION:

    Plantic Technologies:

 Brendan Morris, Chief Executive Officer  +61(0)3 9353 7983

    Nomura Code Limited:

 Juliet Thompson      +44 (0)20 7776 1204

    Media enquiries:

    Pelham PR:

 Archie Berens  +44 (0)207 743 6679 / +44 (0)7802 442486
 Candice Sgroi  +44 (0)207 743 6376


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