Fiberstar Spins Off of R&D Business Unit and Plans to Invest USD $12 Million (BRL 20.8 Million) to Triple Production Capacity in Brazil

The spin-off enables Fiberstar to concentrate its efforts on promoting the sales of Citri-Fi to global food manufacturers.

Sep 14 2010 --- Dale Lindquist, President & CEO of Fiberstar, Inc., a privately held bio-based life science company, announced that Fiberstar's R&D business unit and its extensive IP portfolio were spun off into Fiberstar Bio-Ingredient Technologies, Inc. ('Fiberstar Bio'), effective August 1, 2010. In exchange, Fiberstar became the sole shareholder of Fiberstar Bio and obtained an exclusive worldwide license to produce and sell Citri-Fi and Imulsi-Fi, all-natural, bio-based products derived from citrus pulp, a byproduct of orange juice processing.

Lindquist emphasized, "This spin-off enables Fiberstar to concentrate its efforts on promoting the burgeoning sales of Citri-Fi to global food manufacturers and Imulsi-Fi to global cosmetics and personal care products manufacturers." Lindquist will continue to head Fiberstar. Brock Lundberg, Fiberstar Bio's Chief Technology Officer, will provide the technical vision and direct day to day operations for Fiberstar Bio.

Fiberstar sells its products in 54 countries through a global network of 7 domestic brokers and 38 international distributors. Company revenues have been increasing at an annualized rate exceeding 40% with international sales currently accounting for 67% of total revenue. Revenues are expected to grow at even faster rates during the next five years driven by two strong global market forces: consumer demand and competitive pressures for food manufacturers to cut both the cost and caloric content of their food products.

According to Lindquist, "Citri-Fi is an all-natural ingredient that does exactly that: cuts both the cost and the caloric content of most food products to which it is added, an extremely significant combination of deliverables that is helping drive the double digit growth in global demand for Citri-Fi products."

Lindquist added, "These cost and caloric cutting benefits should enable Fiberstar to increase its global market share and revenues at an even faster pace when combined with the expected rapid growth of westernized foods in emerging global consumer markets such as Brazil, Russia, India, and China and the intense focus on cost reduction expected to result from the global rise in the cost of basic food ingredients such as fat, flour, protein, and sugar during the next decade."

To meet this rising global demand for Fiberstar's products, Lindquist announced that Fiberstar has formed a wholly owned subsidiary, Fiberstar Ingredientes do Brasil, LTDA ('Fiberstar Brazil'), to secure USD $12 million (BRL 20.8 million) of equity and debt funding to build a manufacturing plant in Brazil that will triple Fiberstar's production capacity for its bio-based, 'green,' all-natural, multi-functional Citri-Fi and Imulsi-Fi products.

Citri-Fi is a cost-saving food ingredient that is used to improve the quality, nutrition, and label declarations of a wide variety of food products. Food manufacturers gain these benefits by using Citri-Fi to manage free moisture, reduce syneresis, replace phosphate salts, replace synthetic ingredients, partially replace higher priced ingredients such as fat, eggs, and meat, save labor and energy costs by reducing cook or bake time and extend shelf life in a wide variety of foods including baked goods, beverages, dairy products, fats and oils, frozen foods, fruits and vegetables, meats, sauces and dressings.

Imulsi-Fi is a price-competitive thickener and emulsion stabilizer used in cosmetic, cosmeceutical, mediceutical, nutraceutical, pharmaceutical, personal care and industrial products (e.g., coating, ink, paint and lubricant). Initial launches of consumer products made with Imulsi-Fi are expected to be introduced in the United States and Europe before the end of the year.

Citri-Fi and Imulsi-Fi have enabled Fiberstar to gain a solid reputation and global recognition as an innovative leader in novel food and cosmetic ingredients. In 2005, Fiberstar was awarded Frost & Sullivan's U.S. Food Fiber Markets Entrepreneurial Company of the Year Award. In 2007, Fiberstar received Food Ingredients Europe's Silver Award for the Most Innovative Food Ingredient introduced into Europe in the prior two years. In 2010, Fiberstar was named a Wisconsin Company to Watch by the Wisconsin Entrepreneurs' Network ('WEN') with support from the Wisconsin Department of Commerce and the Division of Entrepreneurship and Economic Development ('DEED') at the University of Wisconsin-Extension in association with the Edward Lowe Foundation.