Diamond Wood
Accsys is pleased to announce that it has today received a letter dated 18 October 2010 (the "Letter") from Diamond Wood China Limited ("Diamond Wood"), the Company's licensee of its acetylation technology in China and other Asian territories, announcing: "the recent signing of an agreement with an Asian investor group and the subsequent imminent funding of the first Accoya® factory in Asia by the end of 2010."

The Letter also announces changes to the board of directors of Diamond Wood to facilitate the funding, including the appointment of Mr. Akeyuth Anchanbutra as Chairman.

Further to the announcement by Accsys on 21 June 2010 that it had entered into a revised licence agreement with Diamond Wood ("Revised Licence"), the Letter, addressed to all Diamond Wood shareholders, confirms certain terms of that Revised Licence as follows:

• The reduction of upfront License Fee payments by c. €10m euros on the first four reactors of production

• A 20-year exclusivity for the production and sales of Accoya®in Greater China (China, Hong Kong, Macau, Taiwan)

• The right of first refusal on Tricoya (MDF) technology in China

• A ten-year exclusivity for the production and sales of Accoya®in Thailand, Singapore, Vietnam, Philippines, Cambodia, Laos, Burma, Brunei, Indonesia and Malaysia.

In addition, Accsys confirms that the royalty payments under the Revised Licence have been amended and are now:

• Increased by in excess of 10%, from €22 to €25 per cubic metre of Accoya® produced and sold by Diamond Wood

• Subject to an annual upwards only index-linked inflator

• Payable beyond the twenty years originally provided for (at a discounted rate).

Accsys is meeting with Diamond Wood in early November 2010 and hopes to be able to announce further details in respect of Diamond Wood's fundraising following that meeting.

Ends