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Bema
27th October 2005

I have volunteered to write to you on behalf of a large group of private investors which frequent the Fillyaboots and MoneyAM bulletin boards (www.fillyaboots.com & www.moneyam.com). We have collectively produced some questions which we hope you will be able to provide us answers for. Obviously we understand that you may not be able to provide complete answers in every instance due to market restrictions or if you consider the information to be price sensitive. However this should have the added advantage of only having to answer a set of questions once rather than multiple times from the same people.

Comments from your letter written beneath each question.
Author Terry Robins

1) What was Stanelcos role at the recent conference at Philadelphia? Did they speak at all, demonstrate or were they just in the crowd?

Several members of Stanelcos management team were present at the Philadelphia conference, including the MD and Commercial director and myself. At the last moment we were given the opportunity to present a paper on Green Seal and Starpol 2000 material. The presentation was given by myself and was well received. We were also given the opportunity to set up a table top presentation of material at an evening reception where we showed Green Seal, Starpol material, Cradle wrap and other Stanelco products. A great deal of interest was shown with several leads to follow up.

2) In a recent announcement you said new Starpol products would be revealed at the recent conference in the US. What were they?

Starpol is a range of materials, a new formulation Starpol 3000 is a bio-compostable material with many of the attributes of Starpol 2000 but has high clarity. This material is seen as having a huge market benefit.

3) Is one of the new Starpol 2000 products an Oxygen Scavenger?

O2 scavengers have yet to be released.

4) Is Wal-Mart waiting for FDA approval on Starpol 2000, so that they can change to a Greenseal and Starpol 2000 combination, and bin the Polythene?

A number of potential customers in the USA require full FDA approval prior to adopting Starpol materials for food products. Initially we are targeting replacement of APET.

5) Are all the US big retailers using Polythene, or are there any in a position to use Greenseal without Starpol 2000, like ASDA are?

In the USA most trays used are Polypropylene materials. Whilst in the UK they are PET, however PP does not have as good a gas barrier which makes Starpol 2000 a good alternative to move directly into a biodegradable option.

6) Do you have any idea of the expected timeframe for FDA approval for Starpol usage with meat products?

The material has been granted food approval for fruit and vegetables and in currently awaiting final approval for all other foods. This is a statutory 120 days time frame with has already started.

7) What does the recently announced tie-up with Natureworks actually mean? Unfortunately the reports on this have been translated in many ways so there are several versions floating around the net.

PLA is a component of Starpol 2000 material and we have secured an ample supply from Natureworks

8) Are we just buying material from Natureworks for use in Starpol that we sell to other companies or are we supplying Natureworks in any way?

Natureworks LLC, a Cargill company is a supplier of PLA to us. It is likely that there will be some joint promotion

9) Does SEO/Biotec intend to manufacture all Starpol or do they intend to license the IP?

Both

10) Are Stanelco producing Starpol for Natureworks?

No

11) There are various statements around regarding Starpol. It is claimed that both Natureworks PLA and Starpol are compostable. In particular I had been lead to believe that Starpol would decompose on my own compost heap within 6-8 weeks. As PLA is the main ingredient in Starpol and has since been shown to only compost in temperatures of 135 deg F or 57 deg C (well above a normal compost heap temperature) can we have clarification on the conditions required for Starpol to decompose.

This will depend upon the grade of Starpol and what it is made into. Starpol 2000 is certified to the biodegradable standard DIN CERTCO and EN: ISO: 13432. However Compostability is dependant on degrading within a given time frame and this is related to mass. A thick wedge of material will biodegrade, but may take longer than the given time to compost. Should the same mass be shredded it could compost and be certified to do so. PLA does not easily compost in a garden compost but this again is dependant on size and heat generated within the compost. In a small cool garden compost PLA will probably not biodegrade.

12) As shareholders in Stanelco, are the directors concerned by the negative market vibes regarding the company recently? And if so/not then why?

Directors are always positively seeking to ensure that Stanelco is shown in the best accurate light at all times.

13) Is there any concern over potential leaks of information? The regular manipulation of the share price the day before an RNS seems to suggest that someone in the market has advance knowledge.

If you have evidence of share price manipulation and / or abuse of insider information please let us know or report it to the FSA. It is an extremely serious matter. Stanelco endeavours to place information into market as soon as it can. For example, the recent results of Food Contact Approval tests and associated exclusive deal with ASDA occurred on the same day. The announcement was agreed that night and made at c.7.00 next morning which made it extremely difficult for any insider information as only very few people knew of the events.

14) The company is perceived by many on the outside to be 'jack of all trades, but master of none' as from the outside many feel we are spreading ourselves too thin on numerous products. Why is it that Greenseal appears to be on the backburner yet we have engineers and the like in the USA waiting for deals?

GREENSEAL and STARPOL are priority. We then have a whole range of secondary projects these are been prioritised by the commercial team who have recently been strengthened to cope with extra projects and developments.

15) Are the Stanelco actively seeking to end the BPRG court case fiasco?

Appeals are due to be heard in early 2006.

16) Why has nothing further has been mentioned about the Reckitt Beckinser, Reiser and Grampian trials? This gives the impression that these issues have now been quietly dropped.

We are expecting to do business with all of these companies. RB Electrosol Gel Packs and now Finish Quantum are using Stanelco technology on products which can be found in the High Street.

17) Are you able to give a potential launch date/target for the Mondini RF machine?

The Mondini project is ongoing as is the building of a purpose built RF machine with Proseal and others companies which will be placed into factories imminently.

18) How many RF conversions have Stanelco done so far under the ASDA exclusivity contract? Is there a projected target take-up rate by which Stanelco are measuring progress and are Stanelco achieving it?

An up date was given in the announcement dated 28/07/05

19) When is the auction for the cigarette filter technology going to take place?

That is potentially price sensitive information. Expect more in due course. We do not know the value of this technology

20) How long do you expect to have to keep the 'auction' open for the sale of the cigarette filter patents?

See above

21) Could you clarify the SP Metal Order? What are the 10,000 tons of Starpol for, film or semi-rigids, and who is the end user or supplier.

10,000 Metric tonnes are primarily for flexible applications

Thank you very much from me and on behalf of the other posters at fillyaboots and moneyam for taking the time to answer our questions. I know it must seem impossible to please us damn investors but we are impressed with the progress made so far despite our constant questioning!

Best regards,

Bema - Name change to protect the innocent!

Answers by Terry Robins
Chief Operating Officer
Stanelco plc

27th October 2005

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