announcement, page-4

Solagran signs MOU with Russia's Sibex
13:40, Thursday, 29 June 2006

Sydney - Thursday - June 29: (RWE Aust Business News) - Solagran
Ltd (ASX:SLA) has signed a memorandum of understanding with the Siberian
Factory of Extracts and Biotechnologies LLC (Sibex).
Sibex is a Russian company involved in the extraction of
biologically active compounds from a range of plant and tree biomass
native to Siberia, using a different technology to that employed by
Solagran.
Directors said the MOU represents the first stage of what is
expected to be a long-term relation that can provide Solagran with
several benefits, including:
* Additional manufacturing capacity to meet current and projected
needs for production of its existing family of Bioeffectives using a
combination of Sibex production facilities and Solagran's patented
technology;
* Access to a reliable supply of high quality conifer needle
essential oil which will be used in the manufacture of a range of
products to be launched by Solagran over the next 6-12 months; and
* Access to other products extracted from different raw material
sources to those currently used by Solagran, but which, with the addition
of Solagran's technology, offer the potential to extend the company's
product range over time.
A joint investigation by Sibex and Solagran over the next few
months will determine the extent to which the use of Sibex facilities in
combination with Solagran's technology could obviate the need to complete
a planned capacity upgrade in St Petersburg.
Solagran currently plans to increase its production capacity once
it receives final regulatory approval from the Russian Ministry of Health
for the use of Ropren as a treatment for chronic liver disease.