· Agreement to supply proprietary acetylated material to Medite for the production of Tricoya®, significantly accelerating the introduction of Tricoya® to the market;
· New patents granted, further protecting the process of producing Accoya® wood;
· Revenue from Accoya® increased by 12% (excluding sales to Diamond Wood) compared to the same quarter last year;
· Positive 4% gross manufacturing margin achieved in first quarter;
· Reduction in other operating costs by 16% compared to same period in previous year;
· Working capital control improved – cash of €26.6m at 30 June 2011 compared to €27.6m at 31 March 2011

In the first quarter, Accsys continued to deliver on its strategy of seeding the market with Accoya®, maintaining a focus on tight cost control and continuing to explore licensing opportunities.



We are also pleased to announce an agreement to supply acetylated material to Medite Europe Limited ("Medite") for the production of Medite Tricoya® panels, the world’s first ultra-high performance, class 1 durability medium density fibre board (“MDF”) to be made using Accsys’s proprietary acetylation technology.


Supply agreement with Medite Europe accelerates Medite Tricoya® market entry
Under the terms of the agreement, over the next 17 months Accsys Technologies expects to supply Medite with up to 7,500m3 of acetylated material, produced under the Company’s patented acetylation processes at its plant in Arnhem, The Netherlands. This speciality acetylated material will be transferred to Medite’s panel production facility in Clonmel, Ireland where it will be processed to produce Medite Tricoya®. First shipments of Medite Tricoya® are expected to reach the market within this financial year.

This agreement represents the next stage in the relationship between Accsys and Medite arising from the Joint Development Agreement (“JDA”) and greatly accelerates the entry of Medite Tricoya® into the market. Medite Tricoya® will be distributed and sold by Medite, for the purposes of final market testing and market seeding, to underpin a move to commercial scale production under the licence terms set out in the JDA.

The agreement moves Accsys significantly closer to realising the full licence terms within the JDA, while also demonstrating a new model for the production of Tricoya®for seeding purposes and providing sales of the acetylated material from the Arnhem plant.

At the same time, the JDA has been amended to provide that, amongst other things, Medite be granted exclusive rights to manufacture, market, sell and distribute Medite Tricoya® in the Netherlands in addition to the United Kingdom and the Republic of Ireland. This reflects the importance of the Dutch market and is the result of the progressive market research carried out by the parties over recent months.

Commenting on the agreement Paul Clegg, CEO of Accsys, said,
“This agreement represents a significant strengthening of the relationship between our two companies and is an important milestone in the on-going development of Tricoya®. By supplying acetylated material to Medite for processing we have been able to bring Tricoya® to the market two years earlier than had been expected.”