Italian plastic bag Application Decree published and enforcement begins May 27, 2013

Cereplast, Inc., a leading manufacturer of proprietary biobased, compostable and sustainable bioplastics, is pleased to announce that the Italian plastic bag Application Decree has been published in the Official Journal, and sanctions for non-compliance with the legislation will be enforced effective May 27, 2013. Management estimates, based on certain provisions, that Cereplast’s total addressable opportunity today for Italy alone exceeds $50 million.

Cereplast estimates that the total addressable market for compostable blown film grades in Italy exceeds $500 million. Currently there are 4 legitimate competitors who produce compostable blown film that are predominantly based in Europe, each varying in size from approximately $5 to $120 million in revenue. Based on current competition, current production capacity, a full production staff and sufficient working capital, the estimated market opportunity for Cereplast exceeds $50 million. Manufacturing capacity at the Company’s Seymour, Indiana plant is currently 3000 tons/month. Based on current market pricing of $4,500/ton, this plant is capable of producing in excess of $10 million per month at full capacity. The Cereplast Compostables® blown film resins have a competitive advantage because they can be processed on traditional equipment without requiring modifications, and they do not emit problematic fumes.

Merchants must discontinue the use of traditional single-use plastic bags in favor of bioplastic bags or other alternatives. The law prohibits the use of OXO Biodegradable additives and requires Italian merchants to only use compostable applications as defined by EN 13432 that Cereplast resins comply with. The fines for non-compliance range between €2,500 and €25,000 and may be increased for large quantities of bags. This plastic bag ban is the first step by the Italian government to make Italy plastic-free.

Italian Minister of the Environment Corrado Clini stated, “This measure normalizes the uncertainties that have hindered the development of the production chain, promotes green chemistry and puts Italy in line with the EU.”

Cereplast Chairman and CEO Mr. Frederic Scheer commented, “Many of our customers have been placing orders in preparation for this moment. We have tested our products with approximately 50 blown film converters in Italy, and now that the Application Decree has been published, we expect larger volume sales to follow in the wake of this news. We are excited about this key milestone and look forward to further serving the Italian marketplace with our proprietary bioplastic resins.”

About Cereplast, Inc.
Cereplast, Inc. designs and manufactures proprietary biobased, sustainable bioplastics which are used as substitutes for traditional plastics in all major converting processes – such as injection molding, thermoforming, blow molding and extrusions – at a pricing structure that is competitive with traditional plastics. On the cutting-edge of biobased plastic material development, Cereplast now offers resins to meet a variety of customer demands. Cereplast Compostables® resins are ideally suited for single-use applications where high biobased content and compostability are advantageous, especially in the food service industry. Cereplast Sustainables® resins combine high biobased content with the durability and endurance of traditional plastic, making them ideal for applications in industries such as automotive, consumer electronics and packaging.