Neo Industrial Oyj - Company Announcement

NEO INDUSTRIAL INVESTS IN ANTIMICROBIAL FIBRE MANUFACTURING

NEO INDUSTRIAL  PLC       STOCK EXCHANGE RELEASE     27 March 2012 at 9.00 am

NEO INDUSTRIAL INVESTS IN ANTIMICROBIAL FIBRE MANUFACTURING

Avilon Ltd, part of Neo Industrial's Viscose Fibre Segment, invests in
production line of antimicrobial special fibres in Valkeakoski factory. With
this investment one of the factory's post-processing machines will be modified
for antimicrobial fibre manufacturing. The value of this investment is  EUR
200,000. Post-processing investment will support Avilon's strategy to
specialize in special fibres. 

The company is planning to start the commercial production of antimicrobial
fibres gradually during next summer and autumn. The production is based on
bought fiber until Avilon restarts its own production of viscose fiber
production. With this post-processing investment the company will achieve the 
growing market of antimicrobial special fibres. The estimated annual production
will be about 3,500 tons, which is almost 5 % of  global production. After the
viscose factory will be restarted, the production can be increased in
accordance with the market situation. 

Antimicrobial fibers are used e.g. in hospital and sport textiles, working
clothes and in various hygienic products. The market is growing, especially in
the United States. 

The manufacturing process of antimicrobial fibres is based on the
ionomer-technology developed by Avilon's Finnish partner. This technology
utilizes the well-known antimicrobial effect of silver in a new- patented
technic. Avilon invests in post-processing equipment, which can modify the raw
fiber into antimicrobial products. The same technic can later be used on
Avilon's other production lines in a greater scale.The antimicrobial fibre
produced by this cost-efficient  technology is ideal for making high-quality
and durable antimicrobial textiles 

In spite of the corporate restructuring process, Avilon has continued actively
research and development projects. Besides antimicrobial fibres the Viscose
segment has developed PPV-technology, enabling the usage of paper pulp in the
viscose manufacturing process. Global marketing of this technology has just
started. The environmental friendly carbamate-technology was announced in
January 2011. This method, enabling the viscose production without carbon
disulphide, is planned to be commercialized in 2013. 

Neo Industrial Plc

Markku E. Rentto
Managing Director

For further information, please contact:
Sari Tulander, Managing Director, Avilon Ltd, tel. +358 207 800 500

www.neoindustrial.fi

Neo Industrial's strategy is to invest mainly in industrial companies with
similar synergic benefits. The aim of investments is with active ownership to
develop the purchased companies and establish additional value. Returns are
sought through both dividend flow and an increase in value. Neo Industrial's
class B shares are listed on the NASDAQ OMX Helsinki Stock Exchange. Neo
Industrial's business segments are Cable , Viscose Fibers and Single Family
Housing.