Neo Industrial Oyj - Company Announcement

NEO INDUSTRIAL SIGNED A LETTER OF INTENT FOR LICENSING PPV® TECHNOLOGY TO CHINA

Neo Industrial Plc       STOCK EXCHANGE RELEASE       July 31, 2012 at 2.00 pm



Carbatec Ltd, the technology company of Neo Industrial's Viscose Fibre Segment,
has signed a letter of intent with a large Chinese textile fibre manufacturer
for licensing its paper pulp viscose technology (PPV® technology) to  viscose
fibre plants in China. 

“Signing this letter of intent is an important step towards full-scale
commercialization of our technology. The uncertain prospects on the dissolving
pulp market increase the interest towards technologies for using alternative
raw-materials, especially in China with its fast-growing viscose fibre
industry. Efficiency, quality and environmental factors are the key targets of
our technological development projects - and are in strong demand on our global
market” says Heikki Hassi, Managing Director of Carbatec Ltd. 

PPV® technology brings great advantages to viscose fibre manufacturers

The PPV® technology, patented by Carbatec Ltd, has been developed and applied
in industrially scale at Avilon Ltd's viscose fibre plant in Valkeakoski. This
technology enables the usage of paper pulp in viscose fibre manufacturing,
offering a considerable competitive edge for viscose fibre manufacturers, as
the price of the paper pulp is lower than dissolving pulp.  PPV® technology 
improves also the fibre quality. 

The present market potential of PPV® technology  on the viscose fibre and
cellophane film industry is about 1, 000,000 capacity tons per year, resulting
in savings of approximately 350 million dollars in raw-material costs of PPV
customers, estimated by the average price or raw-material. 

CellMark Ab, the global supply chain service company selling and marketing the
PPV® technology and licenses developed by Carbatec Ltd (release on March 7,
2012) is the third party of this letter of intent. 



Neo Industrial Plc

Markku E. Rentto
Managing Director

Further information:
Markku E. Rentto,  Managing Director, tel. +358 207 209 191
Heikki Hassi, Managing Director, Carbatec Ltd, tel + 358 20 7800 506

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 and Viscose Fibers.