September 16, 2008
Soil Biogenics Limited, a Biotechnology Company Focusing on Development and Production of Ecological Composts and Soils, Is Pleased to Announce That the Company Has Started Its Deliveries Under 2008 Season Program
Soil Biogenics Limited (the "Company,""Soil Biogenics") (PINKSHEETS: SOBGF), a biotechnology company focusing on development and production of ecological composts and soils, is pleased to announce that the Company's wholly owned subsidiary, Piksa Inter Ltd ("Piksa"), has started its deliveries of ecological composts and soils under the 2008 season program. The season starts every year in May and ends in November. There are minor sales outside the season that do not substantially affect the final sales figures.
The 2008 business year will be significantly different from previous years, due to the new rules regulating business activity in Moscow. The Moscow City Council has approved a new contracting system which excludes non industrial suppliers of fertile soils from supplying the City of Moscow. On May 19th, 2008 Biopotok Ltd, Piksa's parent, was awarded a tender by the City of Moscow to become the "Technical Controller" for the supplies and deliveries of fertile soils to the City. The City of Moscow regulates the quality of the fertile soils consumed in the City of Moscow, organizes tenders to supply fertile soils by industrial suppliers and pays the suppliers for the delivered fertile soils. In past years, the tenders to supply the fertile soils to the City of Moscow were organized by the construction companies that used the fertile soils. This led, in a number of cases, to the purchase by the construction companies of non industrial, low quality fertile soils at more economic prices. This unfair competition will be eliminated with the new system of tenders to supply fertile soils to the City of Moscow. Under the City of Moscow Council's new system of tenders, only industrial producers and suppliers of fertile soils can participate in the tenders, thus excluding non industrial companies from bidding on supplying the City of Moscow with fertile soils. The volume of tenders to supply fertile soils that a producer can be awarded cannot exceed its industrial production capacity. The City of Moscow will provide the construction companies with commodity certificates so they can get deliveries of the fertile soils from the industrial soil producers. Construction companies will no longer deal directly with the compost and fertile soil producers, thus eliminating unfair competition from non industrial suppliers.
This new system of tenders will be implemented during the 2008 season. In 2009, all the volumes of compost and fertile soils will be delivered under the new tender system. Soil Biogenics, being the largest compost and fertile soil producer in Russia, will especially benefit from the new tender system.
Another advantage of the new tender system is that the compost and fertile soil suppliers will not have to wait as long as they have in the past for payment since the City of Moscow allocated funds to pay for the compost and fertile soils at the beginning of the current year. Currently, compost and soil producers must wait 6 to 9 months until the construction companies are paid from the City budget. This will help reduce much of the suppliers' financing and borrowing costs due to quicker receipt of payments.
Despite record rain fall during our production season, which has affected production of the Company's compost and fertile soils, we have been able to maintain production volume on a much higher level than in 2007. By August of 2008, the Company had delivered approximately 84% of the whole 2007 sales. The Company believes that sales figures for 2008 will substantially exceed those of 2007 level, but fall short from the predicted 2008 sales figures of 250.000 m3 of fertile soils and approximately 2,000 m3 of PIKSA supercompost.
Soil Biogenics is a biotechnology company focusing on development and production of ecological composts and soils. Soil Biogenics' stock trades under the symbol "SOBGF" on the Pink Sheets in the United States.
ON BEHALF OF THE BOARD "Agustin Gomez de Segura" Agustin Gomez de Segura President, CEO and Director
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For further information, please call Agustin Gomez de Segura Phone: (+34) 916504734 Address: ul.Kuusinena 19, Moscow, Russia Website: http://www.soilbiogenics.com and www.piksa.ru
SOURCE: Soil Biogenics Limited