New Rail Spur in Seymour, Indiana Extends Freight Access for Cereplast

Allows Company to Better Service Its Growing Client Base and to Ship Its Bioplastics Directly by Rail Freight

EL SEGUNDO, Calif. & SEYMOUR, Ind., Aug 03, 2010 (BUSINESS WIRE) — Cereplast, Inc. /quotes/comstock/15*!cerp/quotes/nls/cerp (CERP 3.24, +0.04, +1.20%) a leading manufacturer of proprietary bio-based, sustainable plastics, announced today that it will soon have access to rail freight service at its recently opened facility in Seymour, Indiana.

The rail spur, which is located at Seymour’s Eastside Industrial Park, will enable Cereplast to bulk ship its proprietary biodegradable plastic resins to its growing client base across the United States, and directly to U.S. port cities for shipment to clients in Asia, Europe and South America. In March, the Company relocated its manufacturing facility from Hawthorne, California, to the new facility in Seymour, Indiana, which occupies 105,000 square feet on 14 acres of industrial land. At this facility, Cereplast transforms raw materials into bioplastic resins using state-of-the-art manufacturing equipment and sells its resins internationally to companies for use in plastic products that consumers utilize daily around the world. The Company expects to ship 16 million pounds of bio-plastic resins this year, an increase of 400% over 2009, in response to surging consumer and industrial demand for sustainable, “green” products.

Each standard rail car can hold up to 200,000 pounds of bioplastics and will allow Cereplast to sell and transport its products in large quantities. This appeals both to large volume plastic goods producers, who purchase bioplastics in significant quantities, and further supports the Company’s growth as shipping by rail is more efficient, cost effective, and will lower Cereplast’s carbon footprint.

At a total project cost of $400,000, the rail extension was funded by the City of Seymour, the Indiana Economic Development Corporation, and the City of Lawrenceburg through its regional economic development grant program. Construction began in May 2010, under Wayman and Associates. Contractors and project engineers completed the installation of the rail spur at the end of July.

“We would like to thank Seymour Mayor Craig Luedeman, Jackson County Industrial Development Corporation and numerous State, City and County officials for getting this project approved and making it a reality,” said Frederic Scheer, Founder, Chairman and CEO of Cereplast. “We are grateful for their combined support throughout the economic downturn, which helped us to get the necessary infrastructure approved for access to the railway, making it easier for us to serve our growing client base.”

In addition to helping fund the rail extension, the City of Seymour has accepted letters of compliance for tax abatement, which were offered to Cereplast to help offset associated expenses. The State of Indiana has also pledged tax credits to Cereplast totaling $600,000.

“The City of Seymour has been pleased to assist Cereplast,” said Seymour Mayor Craig Luedeman. “We pledge this support both now with the rail extension and in the future with on-going tax abatements. Cereplast is an excellent addition to our corporate family.”

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