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Supplier News December 30, 2012

Cardia Bioplastics secures an exclusive annual supply contract into Shanghai, China

Cardia Bioplastics Limited is pleased to announce an exclusive annual supply contract with the Shanghai Pudong City District in China.

The agreement is to supply an estimated $1.2 million per annum of Cardia’s Biohybrid™ renewable kitchen waste bags to approximately 20% of householders in this region. Cardia's renewable Biohybrid™ kitchen bags are made with Cardia's proprietary Biohybrid™ technology that uses less oil and a lower carbon footprint compared to conventional plastics. This contract win follows the successful six-month trial of Cardia’s products in this region earlier this year. Pudong is one of four City Councils in China that has conducted waste management trials using Cardia products. The other three Councils in trial phase are Nanjing, Hangzhou and Yuhang and Cardia is looking to expand into other provinces of China.

Penetrating into this crucial market opens up significant opportunities for Cardia to grow and expand its global distribution of organic waste management products. Shanghai Pudong is one of China’s highest profile development areas and represents a key financial and commercial hub for the entire country.

There has been a strong focus towards environmental initiatives in the city of Shanghai in recent years. Following the World Expo in 2010, Shanghai implemented an organic waste separation process which targets waste separation at source. In particular, separating plant material and food scraps at the household level, which form a large part of the domestic waste stream in China. Earlier this year, as part of the six-month trial period, Cardia successfully supplied its Biohybrid™ kitchen bags to approximately 5% of Pudong’s households. This supply will now be expanded to 20% of Pudong’s households.

This is a critical step towards efficient management of domestic waste. More importantly, Shanghai Pudong City District has selected Cardia Bioplastics to supply Biohybrid™ renewable kitchen waste bags to households, which are tailored specifically for collection of food waste.

Dr Frank Glatz, Managing Director of Cardia Bioplastics said:

“This marks another important milestone for Cardia. The success of winning this contract is a result of our superior product technology and effective supply capability through our manufacturing plant in Nanjing, China. Through our successful pilot programs, which are already in place in other key districts in China (Nanjing, Hangzhou and Yuhang) we are confident in our corporate strategy of securing additional long term contracts in China.

Importantly, this contract follows the recent announcements of $500,000 per annum sales contracts to both an American hygiene products company and a global consumer products company.  These three contracts combined equate to over $2.2 million of secured revenues contributing to the current financial year. This is significant for the Company and equates to over one half of last financial year’s total reported revenues.
Mr. Jackie Chen, Cardia Director and Head of China Operations said:

“We are delighted with this outcome and we will continue to develop and maintain strong Government relationships to work with China City Councils towards managing household waste sustainability and reducing their environmental footprint.”

In addition, Cardia has a certified compostable offering for its organic waste management business, where trials are underway in Australia, New Zealand, Malaysia, Canada, USA, Brazil and the UK.

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