15th August 2008

Important Changes to CFE Group Ireland and UK

This is to announce some important changes that CFE Group are making to ensure their competitiveness in the European market. CFE Group over the last year have been facing many challenges within all parts of our businesses in Europe. In areas of Die Manufacturing, Die Refurbishment and Roll Refurbishment, we have seen large increases in raw material and labour costs that are challenging competitive pricing for the industry.

In order to compete with these rising costs and still deliver a complete solution to you our customer, we have undertaken a complete review of our business and are announcing today some important changes.

Die Manufacture

After an in depth review we have decided that it is no longer competitively viable to manufacture dies from our Haydock plant. We have made strategic alliances with larger die manufacturers and will continue to supply new Dies competitively in the UK and Ireland. This change will not affect existing orders that we have, as these have already been reviewed.

Die Refurbishment / Roll refurbishment

With the costs of new dies rising due to raw material prices, we see the refurbishment process to be critical as an economic solution to your process. We will continue to handle refurbishment from our UK and Irish facilities and will be streamlining this process for maximum efficiency.

Delivery / Collection Service

With the additional increase in fuel costs, we have decided it is too costly to run our own delivery /collection service, instead we have forged a strategic alliance with UK and Irish logistics companies, who will manage our collection and delivery service. We have already been using this service in the South of the UK and in some areas of Ireland, and will now roll this out to all our customers throughout the UK and Ireland. Collections can be arranged next day, and due to the size and coverage of the logistics company we believe that we can improve our service to customers.

Service / Maintenance

We are also looking to improve our service department and maintenance team. Head by co founder Mr Pat Dennehy, we will be introducing 'Service Contracts' to our customers this year, so planned maintenance can be introduced and machine efficiency can be improved, with less downtime.

As you can see we have taken a good deal of time to review our business and make these strategic changes, we understand that the market is changing, and that it is necessary to constantly review our business, and ensure that it is always providing the best and most cost efficient service to our customers.

We feel that these changes are necessary in ensuring our success as the No 1, pelleting consumable specialist in the UK and Ireland.

Regards

Con Lynch
Managing Director