HAWTHORNE, Calif.--(BUSINESS WIRE)--Aug. 1, 2006--Cereplast Inc.
(OTCBB:CERP), producer of resins made from renewable and biodegradable sources, today provided a mid-year update on product and business development initiatives.

"Cereplast entered 2006 with the momentum of its initial public offering completed in late 2005 and continued to execute its plan of operations and expand its technology portfolio," commented Mr. Frederic Scheer, Cereplast's CEO. "Key elements of our plan this year included increasing our production capacity, improving our break-through technology and leveraging the momentum created by the soaring cost of oil."

In January, the company expanded its current plant to 25,000 square feet in order to accommodate four new production lines. The first additional line was delivered in July and will begin operation within the next few weeks, doubling the production capacity. The company has invested significantly in its Hawthorne facility to improve its process using new custom made equipment which allows for greater efficiency and increased productivity. The expanded manufacturing facility enhances the company leadership position in processing know-how of bio-based resins.

On the R&D front, the company continues to make progress with its break-through technology. In February, the company filed for two new patents based on starch and nano-materials applied to biodegradable resins. Cereplast continues to lead in this field, and these new intellectual properties will provide for new products and increase the overall value of the company. The company expects to launch new improved resins within the months to come.

The company reached another milestone in March when it received industry recognition through a series of trade magazine articles. These articles, in turn, created new interest in Cereplast resins. As a result, several large potential customers in the food packaging industry, each with annual revenues in excess of $1 billion, have expressed interest in using Cereplast resins as a way of offering "greener" product lines. One of those companies, Duni Corporation, a large global packaging company, recently signed a two-year agreement calling for Cereplast to supply significant quantities of bio-based resins. Signing the Duni supply agreement confirms, once again, Cereplast's product and market acceptance. Additionally, the company has entered into confidential agreements and created successfully test products for several other large potential customers.

Frederic Scheer, founder and CEO of Cereplast, explained that the company is on target with its business plan, and that he expects that the second half of 2006 will continue the pattern of growth. "I anticipate that we will make several major announcements, with respect to new customers, and these customers will have products into the hands of restaurants and consumers by the end of the year. We have been very busy so far this year working to deliver marketable products that will result in increased revenues. We are positioning the company for the substantial demand that we expect to see in a very near future."

About Cereplast

Cereplast, Inc. (OTCBB:CERP) designs and manufactures proprietary bio-based, renewable 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. Cereplast's uniquely formulated resins are certified biodegradable and compostable by BPI (Biodegradable Products Institute). 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.

Copyright Business Wire 2006

Cereplast, Inc.

Cereplast, Inc.

Cereplast, Inc. (OTCBB:CERP) designs and manufactures proprietary starch-based, renewable plastics. Cereplast has developed a breakthrough technology to produce proprietary bio-based resins which are used as substitutes for petroleum-based plastics offering price stability and competitive costs compared to traditional resins. Cereplast resins can be used in all major converting process such as injection molding, thermoforming, blow molding and extrusions. Made from renewable resources such as corn and potato starch, Cereplast resins are certified biodegradable and compostable by BPI (Biodegradable Products Institute) and have comparable or superior performance characteristics to conventional plastics and return to nature quickly and safely. Learn more at www.cereplast.com.

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