shareholder update

VIROTEC INTERNATIONAL LTD

22 February 2005
SHAREHOLDER UPDATE

As a leader in the development and commercialisation of sustainable,
environmental technologies, Virotec International Ltd (Virotec) (ASX/AIM: VTI)
remains focussed on delivering its platform technologies through its tailored
business streams, which include (amongst others) the ViroProduction, ViroFlow,
ViroSewage, ViroMine, ViroSoil and ViroConcrete market segments. The Directors
of Virotec are pleased to provide a brief update to shareholders on a selection
of what they believe to be strategically significant activities.

HYDRODEC TECHNOLOGY SALE


As a result of the sale of Virotec's HydroDec technology, Virotec holds an
equity position of 60 million shares in the newly established HydroDec Group plc
("HydroDec") (AIM:HYR); the value of which has increased substantially as a
consequence of HydroDec's strong performance. The market value of Virotec's
shareholding in HydroDec is approximately $AUD 40 million as of 21 February 2005.

VIROMINE

Laos Contract
Lane Xang Minerals Limited, a subsidiary of the international mining company
Oxiana Resources Limited, have entered into a $AUD 350,000 agreement for the
supply of ViroMine technology at the Sepon Gold Mine in Savannakhet Province,
Laos. Following a site visit by Virotec, the company has agreed to implement a
ViroMine Acid B ExtraTM pit lake treatment and a ViroMine Acid B ExtraTM
permeable reactive barrier to assist in the protection of local rainforest. A
further ViroMine Terra BTM shotcrete application will also be trialed by the
company.

US EPA testing at Gilt Edge mine
Virotec recently received the fourth year of outstanding results from ongoing
testing by the United States Environment Protection Agency at the Gilt Edge
Mine, a Superfund remediation site, where the long term efficacy of ViroMineTM
technology is being assessed on acid rock leachate passing through a ViroMineTM
permeable reactive barrier.

The measured concentrations for fourteen of the fifteen metal contaminants
continue to be below the detection limit for the procedure used. Iron, the
fifteenth contaminant, measured just 210ug/L (this compares to the control
measurement of 21,000,000ug/L taken in 2003 from the untreated acid rock
leachate). Testing for Total Dissolved Solids (TDS), Sodium and Sulfate reveal
consistent ongoing reductions with each passing year. The complete table showing
unprecedented four year results from the Gilt Edge mine can be viewed at
www.virotec.com/viromine.htm.

VIROFLOW

Virotec is now positioned to aggressively pursue commercial opportunities in
three different ViroFlow markets as a result of the strong performance of the
following ViroFlow reagents; ElectroBindTM, ViroPhosTM and ViroBindTM.

Advance Plating

In the USA, Virotec recently installed a significant treatment facility (annual
contract value, $AUD 65,000) into Advance Plating, a Boston, Massachusetts
plating company, where, after three months of operation, ElectroBindTM has
exceeded all treatment expectations. Market analysis indicates there are over
10,000 electroplating facilities in North America and, as a result, the company
is currently formulating an expansion plan for North American operations. The
success in North America follows a range of commercial contracts for
ElectroBindTM in Australia, including metal finishers located in in Melbourne
and in Brisbane.

Colgate-Palmolive
After a substantial trial period in which Virotec was asked to prove the
efficacy of its new ViroPhosTM reagent, Virotec has formally entered into a two
year license with Colgate-Palmolive in Australia to ensure that they meet string
ent requirements for the removal of Phosphorous and suspended solids from its
industrial effluent. The annual contract value is $AUD 35,950.

Koppers Wood Products
Treatment of timber logs begins with a steaming process which opens the cells
for a chemical treatment, known as CCA, which involves adding copper and arsenic
to protect the timber from insect and fungal degradation, and chromium to
chemically seal the copper and arsenic into the timber. Virotec has recently
expanded its ViroBindTM capabilities from the treatment of CCA leachate to the
more extensive problem of CCA solids. As a result, the company has been awarded
a 2 year contract for leachate management (annual contract value, $AUD 17,000)
and a further contract for solids treatment with Koppers Wood Products in
Tasmania.

VIROPRODUCTION
(Product manufacture utilising BaseconTM & BauxsolTM Technologies)

Growing Product Range
Virotec continues to develop its multi-faceted BauxsolTM Technology platform
through effective collaboration with potential end-users. The collaboration beg
ins as early as possible in the development phase to extract the greatest
benefit possible from the collaboration and our efforts focus on addressing
pressing needs. Today, Virotec is in various stages of technology/product
development in approximately 18 different commercial market sectors and this has
resulted in the development of over 150 product blends.

Asia
As a result of our strategic relationship with Hatch Associates, Virotec has
been retained to asses the viability of introducing BaseconTM technology to
several alumina refineries in Asia. Initial laboratory evaluations will assess
Basecon's effectiveness at neutralizing and stabilizing the hazardous red mud
produced from varying Bayer and Sinter processes.

Europe
Virotec has purchased a parcel of land close to the Eurallumina SPA refinery in
Sardinia, as a result of continued successful utilisation of BaseconTM technolog
y on part of the waste stream from the Eurallumina refinery, for the purposes of
BauxsolTM production, and increasing demands for Virotec reagents. Planning is
well developed for a new, continuous production facility which will be built on
the site. Various funding models are currently being evaluated.

North America

Virotec has entered into an arrangement for the initial supply of 100,000 tonnes
of alumina refinery residue in North America. This arrangement ensures an
economic source of supply of raw material suitable for BaseconTM conversion to
BauxsolTM raw material for the expansion of Virotec's North American operations.

VIROSEWAGE

WRc independent study
Virotec has recently retained the Water Research Centre based in Swindon, United
Kingdom (WRc) to independently assess the effectiveness of its ViroSewageTM reag
ent as a passive ViroFilterTM, an end of pipe solution for the extraction of
Phosphorous from municipal waste water. The company anticipates that the
research will be conducted over a six month period. This is an alternative
application of the active dosing ViroSewageTM technology and will enable Virotec
to access a broader market with its ViroSewageTM products.

VIROCONCRETE

Virotec has entered into a joint venture arrangement to secure external funding
of #150,000 research at the Queens University, Belfast to complete 15 months of
testing on the mechanical and durability properties of ViroConcreteTM for use as
both a structural concrete and shotcrete. The funding is being provided by way
of a convertible note, and on completion of testing, the JV participant will
have the rights to commercialise the technology and convert to 40% of the
expanded capital. Subject to a satisfactory outcome, we believe that the testing
will provide all the independent trials and assessments necessary for Virotec to
commercialise the technology.

FINANCIAL REPORTING

Virotec's half yearly financial report for the 6 months ended 31 December 2004
is expected to be published on or about Thursday 24 February 2005.