Investing in Cardia Bioplastics (ASX Code CNN)

Launched in 2002 as Biograde Limited, the Cardia Bioplastics (Australia) Limited sustainable resins business became a subsidiary of Cardia Bioplastics Limited (ACN 064 755 237) in December 2008. This acquisition has facilitated rapid development of Cardia Bioplastics technology and the international expansion of its operations.

The holding company Cardia Bioplastics Limited is an Australian Stock Exchange listed company (ASX Code CNN). It has a strategic business plan focused on sustainable technologies. This strategy encompasses the development, acquisition and commercialisation of emerging sustainable technologies, and the establishment of start up businesses.

Cardia Bioplastics (Australia) Limited is the cornerstone subsidiary in the company’s asset register, with international operations in an industry projected to grow at more than 20% a year for the next 10 years.

With quality intellectual property well protected, product development facilities on three continents, cost effective manufacturing in China, and major global brands as customers, Cardia Bioplastics is positioned to lead the sustainable resins market sector.

Corporate Structure

Cardia Bioplastics (Australia) Pty Ltd (ACN 102 302 134)
Cardia Bioplastics is a leading developer, manufacturer and marketer of sustainable packaging resins derived from renewable resources for the global plastics packaging industry. The company holds a strong patent portfolio for creating innovative products based on its proprietary technology.

Based in Australia and established in 2002, the company manufacturing plant is in Nanjing, China, and corporate and operational offices are located in Australia, China, Germany, and the USA. Products are marketed worldwide and its business growth is fuelled by the global trend towards more sustainable packaging.

The following are passive non-core investments, that at the right price, the Board of Directors would consider selling:

Aquenox Limited (www.aquenox.com.au)
Cardia Bioplastics Limited holds a convertible note covering its advances of $5,161,864 to the unlisted public company Aquenox. This company holds a range of patents for water treatment systems and has now commercialised these technologies with sales achieved nationally. In 2008, the company acquired the assets of Just Irrigation Pty Ltd, a specialised provider of irrigation system design, installation, service and maintenance, with a turnover in 2007 of $5.6million and net profit before tax of $263,925.

Bioglobal Limited (www.bioglobal.com.au)
An unlisted public company held 27.3% by Cardia Bioplastics Limited markets Pheromone products in Australia with sales of approximately $2.5 m in the year to 30 June 2008. The resultant cash flow has been reinvested to build a research portfolio of new agricultural pest control products.

Cam Bow Holdings (Pty) Ltd
In September 2009, shareholders will receive an offer to subscribe to Cam Bow Holdings on a one share for every five Cardia Bioplastics Limited shares held at 1 1/2 cents per share. At the completion of this issue, Cardia Bioplastics Limited will have no interest in Cam Bow (Pty) Ltd. Currently, Cam Bow (pty) Ltd is an unlisted 100% owned subsidiary incorporated in Botswana. It has eleven licences to explore for base, precious and radioactive minerals in Botswana and is currently investigating these tenements for potential follow up ground work programs. For further information visit Cardia Bioplastics Limited (CNN) on the ASX website.
 
Natural Pharmacy Pty Ltd
Cardia holds 66% of the issued capital of unlisted public company Natural Pharmacy Pty Ltd and receives an annual royalty from sales of its brand in Australia.

P-Fuel Limited  (www.p-fuel.com)
Cardia Bioplastics Limited has taken a 6% strategic stake in this unlisted public company established to operate a marketing and distribution agreement for the Royco EX-Oil Generator plant and the purchase of a Royco Plant. P-Fuel Limited's business strategy and mission is to become a global marketer and operator of plants using new technology that produces diesel, petroleum, gas and electricity from disposable plastics, sludges and other waste materials, which are currently diverted to landfill.