Forterra Environmental Issues Operations Update and Outlook

PUSLINCH, ON, Dec. 11 /CNW/ - Forterra Environmental Corp. (TSXV: FTE), a manufacturer, marketer, and seller of premium organic soil-enrichment products based on worm castings, today issued an update on its operations and outlook for 2010.

"The past 12 months or so have been a period of significant progress for Forterra. While some of our accomplishments have taken longer than we had anticipated, we firmly believe that the progress that Forterra has made since fall 2008 positions us for growth and improved financial performance in 2010," said Rick Denyes, president and chief operating officer.

Reviewing the company's achievements since fall 2008, Mr. Denyes cited the following:

    
    -   moved offices and production facilities, consolidating into a single
        location in Puslinch, Ontario, significantly improving conditions for
        manufacturing while also reducing overhead (occupancy expenses in the
        2009 third quarter were about one-third the amount incurred in the
        2008 period);
    -   reached an agreement on the termination of the former head office
        space in Concord and is in negotiations to terminate the former plant
        location in Downsview;
    -   despite disruption caused by the move, nearly tripled capacity
        through successful breeding of worms, increasing production trays to
        more than 1,800 and the population of worms to approximately 26
        million at the end of September 2009;
    -   invested in automated blending equipment to ensure worm bedding
        materials and food stocks are metered and measured to ensure
        consistent quality, particularly regarding nutrient values;
    -   established a relationship with Pagonis Live Bait and acquired its
        WormSense brand name for possible use on Forterra products for retail
        markets;
    -   carried out successful trials with four franchises of a major
        national lawn-care company;
    -   completed successful trials with leading bulk blenders of peat-based
        products, including Lambert, Berger, and Fafard;
    -   completed successful greenhouse horticulture trials for the use of
        Forterra worm castings in raising cucumbers, herbs, and mushrooms;
    -   carried out successful trials against compost-based top dressings
        with several municipalities;
    -   completed field trials of numerous golf turf applications with
        leading golf clubs in Ontario, including those of ClubLink;
    -   signed sales agreements with
        -  Hutcheson Sand & Mixes
        -  Toronto Sprouts Corporation
        -  Turf Logic Inc.
        -  Lambert Peat Moss Inc.
        -  Jennifer's Landscape Vitamins
        -  a major national supplier
        -  Agriculture Technology Incorporated
    -   successfully carried out development of granulated, pelletized, and
        bridged worm castings product formats; and
    -   developed proprietary process for producing consistent bedding
        substrate and feed mix for consistent quality of its finished
        product.
    

"Going forward, we have an opportunity to position our worm-castings products as a leading solution for customers across a wide spectrum of sectors who are seeking organic, 'friendly and green' solutions that meet various legislative and regulatory initiatives," Mr. Denyes continued. "We have come a long way through the learning curve, making mistakes along the way during the past couple of years, so that we believe that we now have a unique understanding of both the manufacturing process for these products and the needs of the marketplace.

"In 2010, with the experience that we have gained, we intend to be simultaneously targeting multiple market opportunities, including fertilizer additives and blenders; retail markets for both private label products and our own Forterra brands; lawn-care companies; golf courses; municipalities; and organic and other growers. Working with or through some of our customers, our products will be available across Canada in various forms serving different vertical markets, as well as in various regions in the United States.

"Our agreements with ATI and the national supplier with which we recently developed a relationship mean that our worm castings will be available through an increasing number of retailers across Canada. We are having discussions with key wholesale distributors who recognize the need to find pesticide-free nutrients to meet their customers' needs. We also will proceed with enabling consumers to order directly from Forterra's website," Mr. Denyes said.

"Subject to the level of improving operating cash flow and available financing, we have a number of projects on which we would like to proceed in 2010. These projects include further automation of our production process, including blending and bagging, and the launch of additional products based on the platform that we have established," he added.

"As a first-mover of large-scale production of worm castings, through nearly five years of research and development, trying various manufacturing approaches, failures and successes, Forterra has developed a number of important competitive strengths," said Don Green, the company's chairman and chief executive officer.

"We have developed a very important body of knowledge and experience with respect to the most effective means of breeding worms and maintaining them. We are continuously improving our process for maximizing their production of castings, including the changes we have made in creating the best environment and bedding materials and feed.

"We believe that Forterra is uniquely able to produce commercial quantities of consistent, premium worm castings on a year-round basis. We now are positioned where we can take our knowledge and fairly easily and efficiently replicate our production facilities to meet demand as it increases," Mr. Green continued.

"What we have accomplished cannot be easily copied by others. The volume of worms required is not widely available. Further, as we have learned, it is not easy to breed worms successfully on a mass scale and it takes time. We have developed proprietary processes for creating consistent bedding substrate to yield high-volume and quality products. We have had our products tested and validated by others.

"Forterra has developed a core product line and we are already developing extensions of it, and we are steadily adding to our list of relationships with customers across various sectors and geographically. As we have learned, the process of developing customer relationships, including product trials and contract negotiations, is considerably lengthier than we had expected. In 2009, we made great progress with a number of organizations that now have purchased from us and that we expect will be major customers in 2010 and future years.

"We believe that for all these reasons, our company and its shareholders have cause to be excited about the year ahead," Mr. Green concluded.

About Forterra Environmental Corp.

Forterra manufactures, markets, and sells environmentally friendly soil enhancers, using worm castings, which boost fertility while restoring the soil with organic matter for sustainable, longer-term benefits, including stronger root growth, and drought and pest resistance. Forterra products contain only organic material. They are ideal for golf courses, sports fields, lawn care, parks, nurseries, orchards, and vineyards. Essentially, Forterra uses red wriggler worms to convert organic material into vermicompost or worm castings. Worm castings contain micronutrients, which are required for healthy plant development. Worm castings also contain microbes, which increase the rate at which plants take up available macronutrients and micronutrients. Further information is available on the company's website at www.forterra.com.

Forward-Looking Statements

This news release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, availability of resources, competitive pressures, changes in market activity, the ability to sign contracts with customers, the development of markets for worm castings, its ability to breed and maintain a sufficiently large worm population, and regulatory requirements. Risks and uncertainties about Forterra's business are more fully discussed in the company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. Forterra assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

%SEDAR: 00013128E

SOURCE FORTERRA ENVIRONMENTAL CORP.

For further information: For further information: Investor and Media Relations, Richard W. Wertheim, Wertheim + Company Inc., Email: wertheim@wertheim.ca, (416) 594-1600, (416) 518-8479 (cell)

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FORTERRA ENVIRONMENTAL CORP.

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