TEG.L Regulatory News (TEG)

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

Re: New Contract

TEG Awarded New Contract by South Staffordshire District Council

The TEG Group Plc (AIM: TEG) is pleased to announce that its subsidiary TEG Environmental Limited has been awarded a seven year contract by South Staffordshire District Council to process green waste at its Simpro Coven facility in Staffordshire. The contract is to process an estimated 10,000 -15,000 tonnes per annum of green waste and is expected to generate total revenue of approximately £1.5 - 2.0 million over the term of the contract. The contract will commence on 1 June 2012.

Commenting for TEG, Chief Executive Mick Fishwick said: "We are delighted to have been awarded this contract by South Staffordshire District Council. We have been working with the Council for some years and we look forward to strengthening that relationship in the years to come."

ENDS

Editors notes:

TEG

TEG provides state of the art technology for handling organic wastes. Its in-vessel composting (IVC) system is one of the few approved technologies capable of treating animal by-product (ABP) waste and it is now providing an anaerobic digestion (AD) technology to produce power from food waste. IVC plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).

The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs"). TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets. The TEG processes are an economic and sustainable alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies capable of treating this waste, is a natural process producing compost as an end product. The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease. TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.

Simpro Limited

In June 2010, The TEG Group acquired Midlands composting company Simpro Limited. The acquisition increased TEG's total processing capacity from 115,000 to 295,000 tonnes per annum and gave TEG the capability of offering a nationwide organic waste processing service.

Simpro has six operational composting sites located in Stoke, Nottingham, Telford, Gaydon, Wolverhampton and Coventry. The company currently processes green waste in open windrows. One of the sites already has planning permission for an in-vessel composting (IVC) facility and three further sites offer the potential for IVC and anaerobic digestion (AD) development. Simpro will continue to operate as a stand-alone company for the foreseeable future.

Collaboration with UTS

UTS Biogastechnik GmbH is one of the world's leading biogas companies offering services in the planning, construction, delivery and installation of biogas plants and their key components. The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base.

UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited, to service the United Kingdom & Ireland markets.

TEG Biogas (Perth) Limited

TEG Biogas (Perth) Limited ("TEG Biogas") is a joint venture company established by TEG with Albion LLP. TEG Biogas is constructing a 16,000 tonnes per annum AD plant at TEG's Glenfarg site to produce 0.7MW of electrical power and 0.2MW of heat that is to be used by Binn Eco Park. Commissioning of the Perth AD facility is continuing and the facility is now continuously generating renewable power.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners. The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste. Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year.