zuChem Receives SBIR Award from the Department of Energy For Production of Xylitol

Chicago, IL (July 31, 2007). zuChem Inc., an innovative supplier of glycochemicals and specialized sugars for the food ingredients, fine chemicals and related industries, today announced that it has been awarded a Small Business Innovation Research (SBIR) Phase I grant by the Department of Energy. The award (of approximately $100,000) will be used to support zuChem’s development of a novel, proprietary bioprocess for the production of xylitol from agricultural biomass.

The Company received one of only six SBIR and STTR grants awarded under the DOE’s “Use of Cellulosic Biomass to Produce Biofuels” initiative. Xylitol is an important value-added co-product which could be produced by biorefineries to improve economics of running such facilities. zuChem’s proprietary process can also be used to make xylitol from waste byproducts of corn wet-milling and dry-milling industries.

“This a significant step forward in the commercial development of our lead production process,” said David Demirjian, Ph.D., President and CEO, zuChem. “We are very pleased that The Department of Energy has recognized the innovative nature of our technology and the significant market need for a novel biosynthetic production process of this kind for xylitol. Currently, the production of xylitol is constrained by the limited supply of raw materials. We believe that zuChem’s novel bioprocess for the commercial production of xylitol from agricultural biomass removes this constraint and significantly reduces the cost of xylitol production overall.”

Xylitol is a five-carbon polyol that has gained wide acceptance as a natural food sweeter due to its many health benefits. Xylitol is anti-cariogenic, does not cause a significant insulin response, and there is growing evidence that it prevents ear infections in children. Demand, both in the US and worldwide, is rapidly growing for reduced caloric sweeteners such as xylitol, driven by increasingly health, and weight conscious consumers.

zuChem Inc., headquartered in Chicago, Illinois, focuses on commercializing innovative manufacturing processes for unique glycochemicals (varieties of specialized sugars) for the pharmaceutical and specialty chemicals industries. Glycochemicals are key components of many antibiotics, anticancer and antiviral drugs as well as many specialty food ingredients. Please visit www.zuChem.com for more information.