Neomarkka - Company Announcement

AVILON DEVELOPS ENVIRONMENTAL FRIENDLY CLEANTECH INNOVATION

NEO INDUSTRIAL PLC     STOCK EXCHANGE RELEASE     19 JANUARY 2011 at 10.15 am



AVILON DEVELOPS ENVIRONMENTAL FRIENDLY CLEANTECH INNOVATION

Neo Industrial Plc's viscose fiber division, Avilon Ltd, is developing
manufacturing technology with the aim of viscose production without carbon
disulphide. The Valkeakoski production plant is testing VTT's (Technical
Research Centre of Finland) patented technology under license, in which carbon
disulfide is replaced with urea. This method can produce viscose like fibers
without using toxic and hazardous, carbon disulphide. 

Although the proper use of carbon disulphide is well controlled in the
Valkeakoski plant, its elimination from the process would be beneficial to both
the environment and the company. The new production process would enable Avilon
to reduce energy consumption by about 40 percent. In addition, investment by
Avilon in future production expansion projects would be reduced by about a
third, because carbon disulphide requires large investments in environmental
protection and occupational safety. 

All Avilon products can be manufactured using the carbamate process, although
production of the most demanding flame retardant fibers requires further
development. Carbamate technology also enables completely new types of fiber
products to be developed. 

One of the most significant advantages of the technology is the fact that,
unlike the carbon disulfide process, the intermediate product, cellulose
carbamate, can be stored and transported as well as sold for instance. In the
future, Avilon can also sell the technology it develops, setting a new standard
in the field. 

In this project, decades of experience gives Avilon the added advantage of a
technological head start. The company also has a functioning plant, which has
all the capabilities to develop carbamate technology as well as other fiber
technologies. According to current estimates, Avilon could take the carbamate
process into commercial use by 2013. 

Avilon's viscose fiber production started on 3 January 2011, with the first
fiber bales produced on 14 January 2011. According to Neo Industrial's
estimates and based on the production of Kuitu Finland Oy, Avilon's
predecessor, Avilon has the possibility to achieve an 80 million euro turnover
this year with about 30,000 tonnes capacity. 



Neo Industrial Plc

Markku E. Rentto
Managing Director



FURTHER INFORMATION:

Markku E. Rentto, Managing Director, Neo Industrial, tel. +358 207 209 191
Heikki Hassi, Managing Director, Avilon, tel. +358 50 321 8550

www.neoindustrial.fi

Neo Industrial Plc'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 B
shares are listed on the NASDAQ OMX Helsinki Stock Exchange.

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