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13 July 2009

LANDKOM INTERNATIONAL PLC

Biodiesel venture with Sunfuel 

Landkom International PLC (AIM: LKI, 'Landkom' or the 'Group'), the Ukrainian producer of high-value oilseed rape and wheat, has signed an Initial Co-operation Agreement with Sunfuel Ukraine LLC ('Sunfuel'), a Ukrainian specialist biofuels group. The agreement covers the sale, processing and development of a new non edible oil seed variant for biodiesel, known as Isis ('Isis').

Landkom and Sunfuel have jointly tested Isis in Ukraine, Europe and South Africa with leading universities and commercial fuel companies and are now moving to commercialise the seed. Isis is similar to oil seed rape (OSR) but has the potential to be considerably more cost effective for biofuel production than both OSR and Palm Oil, the other main sources for biodiesel production. Isis can be grown on marginal quality or fallow farming land with a reduced fertiliser requirement.

The Initial Cooperation Agreement was signed by the two companies on 10 July 2009 whereby Landkom agree to contribute the land and agricultural production resources to grow and harvest the seeds and Sunfuel will invest in the fuel processing facilities at Landkom's operations in Dobrosyn, Western Ukraine, close to the Polish border. Landkom and Sunfuel expect to formalise a further cooperation agreement to extend the working relationship between the two companies. Ongoing plant breeding to improve the seed's characteristics further is taking place at a leading Ukrainian agricultural university.

This spring, Landkom planted approximately 1,000 hectares ('ha') of the seed Isis on marginal quality land not suitable for the Group's food crops to demonstrate proof of concept. The crop planted is not included in the Group's 30,950 ha planting programme announced last autumn and does not impact on the Group's other planting or harvesting commitments. 

This is the third year of cultivation of this crop under test conditions by Landkom. On completion of this latest larger scale trial, Landkom may use some of the biodiesel produced to reduce its own fuel costs and with Sunfuel will in due course also sell product to third parties.

Tests show that the biodiesel produced by this seed, which has already been blended and tested with a major Ukrainian fuel retailer in blends with diesel of between 5% to 20% is usable at significantly lower temperatures than equivalent blends produced from Palm Oil and importantly, these diesel blends have passed EU diesel specifications.

Richard Spinks, Landkom Chief Executive Officer commented:

'This is a very exciting opportunity for us to use our agricultural expertise in conjunction with the Biofuel expertise of Sunfuel to jointly develop biodiesel from land otherwise unsuitable for producing food crops. This will potentially generate another significant income stream for Landkom as well as potentially reduce our own diesel costs.

'Earlier tests, which have been endorsed by a number of academic studies, have shown that this seed variant has great potential to produce higher quality biodiesel than Palm Oil based derivatives.

'There is plenty of scope for us to grow more seed for this venture, which eventually could be licensed for sale worldwide.'

For further information:

Landkom International PLC (www.landkominternational.com)
Richard Spinks, Chief Executive Officer	Tel: +380 673 410140
Liberum
Simon Atkinson	Tel: +44 (0)20 7569 9650
College Hill
Simon Whitehead/Adrian Duffield	Tel: +44 (0)20 7457 2020
Sunfuel LLC (www.Sunfuel.com)
Tim Bowen, Chief Executive	Tel: +44 (0) 7973 668818
Terry Booysen, Founder & MD	Tel: +380 966 693 558

Notes to Editors

Landkom International PLC is a large scale producer of agricultural feedstock, principally oil seed rape and wheat, for supply to the European biodiesel and food industries. Operating in Western Ukraine in the prime, fertile lands close to the border with Poland, and the Crimea, Landkom has planted 30,950 hectares (ha); 16,750 ha of Oil Seed Rape (OSR) and 14,200 ha of Winter Wheat for harvest in 2009. Landkom is implementing Western-style agronomy practices using modern agricultural equipment to carry out efficient, large-scale farming techniques that will result in greater return from the land, increase levels of employment in the region and support further investment into the local economy. 

Sunfuel is a specialist CleanTech company with operations in Ukraine and South Africa. Sunfuel focuses on converting low value or waste streams into high value product and is an international provider of various forms of bioenergy. Sunfuel's consultancy operation also plays a significant role in enabling its corporate customers to achieve their Corporate and Social Responsibility programmes.

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