Cereplast, Inc. Provides a Business Review for Q2 and Q3

HAWTHORNE, Calif.--(BUSINESS WIRE)--Cereplast, Inc. (OTCBB:CERP), a leading manufacturer of proprietary bio-based, sustainable plastics, is providing the following business development update for Q2 and Q3 2009.

“European Bioplastics estimates that consumption will increase from 262,000 tons in 2007 to over 1.5M tons in 2011, a five-fold plus gain”

“We experienced a period of rapid growth after our public listing, which was unfortunately followed by one of the steepest macro-economic downturns in U.S. history,” commented Mr. Frederic Scheer, Founder, Chairman and CEO of Cereplast, Inc. “We are more optimistic than ever about the future of bio-plastics and Cereplast’s role in that future. However, we felt that it was prudent to ‘trim the sails’ so to speak and work proactively to control expenses and inventory as aggressively as possible.”

“We previously announced a change in our business strategy, which as mentioned herein, involved reducing expenses, restructuring personnel and controlling inventory costs. Expense reductions began in the 2^nd quarter and continued through the 3^rd quarter.”

Highlights:

• The Company reduced its footprint in Southern California, going from 85,000 sq. ft to 25,000 sq. ft, and outsourced some of its warehouse space to a third-party logistics company;
• Reduced personnel from 70 (May of 2008) to 25;
• Voluntary and involuntary salary reductions, including senior management;
• Inventory reduction and revision to reduce carry costs.

Management has also selectively implemented strategic growth initiatives aimed at aligning the company favorably within a challenging economic environment.

• Extension of the workforce through distribution partnerships. (Reference the Chase Plastics release - July 15, 2009);
• Implementation of a new strategy: Reference release - May 19, 2009. Cereplast is in advanced negotiations with several large groups but has not yet decided on a partner.
• The strategy involves aggressive development of the Company’s Intellectual Property. One patent was allowed in September of 2009 and the Company filed two new patent applications in August for its Cereplast Compostables® resins;
• Active Fund Raising activity and successful closing of a financing lead by Swedbank-Robur, which was announced in July;
• Active participation in the SPI Bioplastics Council. CEO Frederic Scheer participated in writing the first ever SPI Bioplastic Overview guide published by SPI. Mr. Scheer visited several influential members of Congress in Washington D.C. to explain the importance of Bio-plastics.

Mr. Scheer continued, “Bio-plastics demand is growing exponentially, however it still represents less than 1% of total worldwide consumption. Obviously there is tremendous upside, especially considering that over one third of all U.S. consumers state that they make purchase decisions based on environmental considerations.”

“European Bioplastics estimates that consumption will increase from 262,000 tons in 2007 to over 1.5M tons in 2011, a five-fold plus gain,” concluded Mr. Scheer.

About Cereplast, Inc.

Cereplast, Inc. (OTCBB:CERP) designs and manufactures proprietary bio-based, sustainable plastics which are used as substitutes for petroleum-based plastics in all major converting processes - such as injection molding, thermoforming, blow molding and extrusions - at a pricing structure that is competitive with petroleum-based plastics. On the cutting-edge of bio-based plastic material development, Cereplast now offers resins to meet a variety of customer demands. Cereplast Compostables Resins® are ideally suited for single use applications where high bio-based content and compostability are advantageous, especially in the food service industry. Cereplast Hybrid Resins® combine high bio-based content with the durability and endurance of traditional plastic, making them ideal for applications in industries such as automotive, consumer electronics and packaging. Learn more at www.cereplast.com.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.