AgriTec Systems Inc.
TSX VENTURE : AGR

AgriTec Systems Inc.

October 30, 2007 15:57 ET

AgriTec Announces Joint Venture Company Formation

WEBSTER, TEXAS--(Marketwire - Oct. 30, 2007) - AgriTec, Inc. a subsidiary of AgriTec Systems Inc. (TSX VENTURE:AGR) and Lanka Orix Project Development Ltd. ("LOPD") announced today that AgriSil Holdings Ltd. ("AgriSil"), a new joint venture company, has been formed in Sri Lanka. The two companies each hold a 50% stake. The new company will engage in the production of precipitated silicas, silica gels, activated carbon and other related products through the exploitation of AgriTec's technology and patents throughout the major rice growing countries of Southeast Asia and the Pacific-Rim (the "Territory").

AgriSil, in cooperation with local partners, is developing two 9.5-megawatt rice-husk-fired electric plants and precipitated silica production units in two Thailand provinces. These projects include the design, construction and operation of integrated plants which utilize the rice-husk ash (RHA) generated by the electric plants and process it to liquid sodium silicate, precipitated silica, silica gel and activated carbon in various quantities utilizing AgriTec's technology. While biomass-fueled plants and traditional precipitated silica plants operate around the world, these will be the first integrated plants to take advantage of AgriTec's technology.

Under the terms of the joint venture agreement, AgriTec has granted an exclusive license for the technology and patents to AgriSil, which in turn can grant sub-licenses to the various plants being developed in Thailand as well as other countries in the Territory. As consideration for its access to AgriTec's technology, LOPD will pay AgriTec US$250,000.00 in several installments and be responsible for AgriSil's investment costs throughout the Territory.

The board of directors of AgriSil will consist of an equal number of members with AgriTec and LOPD having the right to appoint three each. C. W. Wellen, Douglas Stephens and Greg R. Wellen will represent AgriTec on the board.

LOPD will be responsible for: assisting in raising funding for the plants, obtaining relevant local approval and licenses for the plants, identifying suitable land for locations of the plants, providing integrated management services, assisting in sourcing markets and sales of the products and, where necessary, providing other incidental services from time to time.

AgriTec will be responsible for: granting the appropriate licenses for the use of the technology and patents, providing technical services for assisting contractors in commissioning plants and bringing them up to production stage, providing assistance in sourcing markets within the Territory, assisting contractors in sourcing machinery and equipment capable of manufacturing the products and providing assistance to contractors in the requisite technical training for plant operating personnel.

AgriSil has entered into an engineering, procurement, construction and management (EPCM) agreement with Porner Ingenieurgesellschaft mbH (Porner Engineering) of Grimma, Germany under which Porner guarantees the successful completion and commercial operation of the first two plants in Thailand.

About AgriTec

AgriTec has been granted patents in the U.S. and selected countries covering methods for producing products from biomass (agricultural wastes) and for the products themselves including liquid silicates, precipitated silicas, silica gels, activated carbon and associated products such as fine-celled foam, plant-growth media and thermal insulation. Most of the development has been focused on processing rice hull ash ("RHA"), the waste from rice mill cogeneration plants that burn rice hulls as fuel. For more information visit: www.agritecsystems.com.

About Lanka Orix Project Development Ltd.

LOPD is a wholly owned subsidiary of Lanka Orix Leasing Company (Colombo Stock Exchange: LOLC) and has a history of successfully developing and executing infrastructure and other projects throughout many countries in Southeast Asia. For more information visit: www.lankaorix.com.

About Porner Ingenieurgesellschaft

Porner was founded over 35 years ago and offers a full scope of services for plant design and project construction. Porner has some 450 engineers and specialists in seven countries and ten locations co-operating in a network to engineer and construct process plants for the refinery, petrochemical, chemical, pharmaceutical, power generation and environmental industries. For more information visit: www.poerner.de.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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