The TEG Group PLC : Re Contract

("TEG" or "the Group")

Re: New Contract

"TEG Awarded New Contract

by Perth & Kinross Council"

The TEG Group Plc (AIM: TEG) is pleased to announce that its subsidiary TEG Environmental Limited has been awarded a new contract by Perth and Kinross Council for the treatment of co-mingled food and green waste, green waste and food waste at its In Vessel Composting (IVC) and Anaerobic Digestion (AD) plants at the Group's Glenfarg, Perthshire facility.  The co-mingled food and green waste will be processed in the IVC, the green waste will be composted at an open air windrow facility and the food waste will be processed in the AD facility. 

The contract will commence in June 2013 and is for a 2-year term with a potential option to extend for a further 2 years. The volume of waste is expected to be 20-25,000 tonnes per annum and the overall revenues will be in the region of £1.8 - 2.0m over the initial period of the contract. 

Commenting for TEG, Chief Executive Mick Fishwick said: "We have been working with Perth & Kinross Council for many years and we are delighted to have been awarded this new contract which will enable us to further strengthen our relationship with the Council.  It is exciting that the contract includes food waste as a new waste stream and that waste will be converted into renewable power and fertiliser in our AD facility.

The performance of the Group's operational business has continued to be very good to date in 2013 and this contract will further underpin the sustainable revenues and profits that side of the business bring to the Group."

ENDS

Notes to Editors

TEG

TEG provides state of the art technology for handling organic wastes.  Its in-vessel composting ("IVC") system is one of the few approved technologies capable of treating animal by-product ("ABP") waste and it is now providing an anaerobic digestion ("AD") technology to produce power from food waste.  Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).  

The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs").  TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets.  The TEG processes are an economic and sustainable alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies capable of treating organic waste, is a natural process producing compost as an end product.  The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease.  TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.

Collaboration with UTS

UTS is one of the world's leading biogas companies offering services in the planning, construction, delivery and installation of biogas plants and their key components.  UTS has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base. 

UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. It is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited, to service the United Kingdom & Ireland markets.

TEG Biogas (Perth) Limited

TEG Biogas (Perth) Limited ("TEG Biogas Perth") is a joint venture company established by TEG with Albion LLP.  TEG Biogas Perth has constructed a 15,000 tonnes per annum AD plant at TEG's Glenfarg site to produce nominally 0.7MW of electrical power and 0.2MW of heat that is to be used by Binn Eco Park.  The facility has been in operation, generating revenues from waste sales and power generation since Quarter 1 of 2012.  It has become one of the leading AD operations in Scotland.

General

Customers include local authorities, waste management companies, food processing companies, farmers and landowners.  The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste.  Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year.