OAKDALE, Calif., March 18, 2005 (PRIMEZONE) -- Itec Environmental Group, Inc. (OTCBB:ITEC) today announced it secured a supply of raw material from the major collector of the post consumer used beverage containers in California as well as from several independent sources. The Plastic Recycling Corp. of California (PRCC) has committed to make available to Itec up to 100 million pounds of material per year.
Itec is currently in negotiations for a $12 million financing to build two PET and HDPE flake manufacturing facilities. As part of the negotiations the company was required to restructure a major portion of its debt which was completed in early January 2005. Itec's first plant will be capable of producing up to 44 million pounds per year. Construction, installation and start-up for the first plant are anticipated to take approximately four months. The plant is expected to be fully operational and generating revenues within 17 weeks from the closing of the $12 million financing.
Once Itec obtains the working capital necessary to build its first plant, it will be well positioned to produce and sell a large quantity of its PET and HDPE flake. Itec recently entered into a three-year agency agreement with H. Muehlstein & Co., Inc., pursuant to which H. Muehlstein will act as Itec's exclusive agent for the purchase and sale annually of up to 60 million pounds of Itec's PET flake and post-consumer HDPE natural flake and pellets in the United States and Canada.
Upon the successful completion of the first plant, the Company believes it will sell approximately 12 million pounds of PET and HDPE flake, generating approximately $8,000,000 in revenues during its first year of operation, EBITDA of approximately $1,000,000 and a gross profit margin of 12%. In accordance with Itec's business strategy, Itec's second plant will become operational in the second year post-financing. During the second year, Itec expects both plants to produce approximately 47 million pounds of flake, generating approximately $28,000,000 in revenues, EBITDA of approximately $6,000,000 and a gross profit margin of 21%.
Customers that purchase Itec's PET and HDPE flake include but are not limited to companies such as Owens-Illinois, which is the largest manufacturer of beverage containers in the USA; leading industries/Duris Industries, Pactive Packaging, Reynolds Packaging Division, Karma Industries and Berkeley Industries, all of which are located in California. In California and Arizona there are approximately 30 manufacturers of packaging products that may be able to use Itec's products in their production.
About Itec Environmental Group
Itec Environmental Group offers solutions to pressing environmental problems faced by public agencies and private entities involved in the recycling of plastics. In a research partnership with Honeywell FM&T, Itec has developed and successfully commercialized a revolutionary new system for the recycling of plastic containers. Its proprietary Eco2(tm) System costs 30% less to operate, uses no water, removes all contaminates and odors from the finished flake, is closed-loop and thus non-polluting, and produces no toxic by-products.
Please visit our web site at http://www.iteceg.com. Any interested parties wishing to be included in Itec Environmental Group's mailing list, please email your request to info@iteceg.com or Contact: Gary M. De Laurentiis 209-881-3523.
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