zuChem Receives SBIR Phase II Award from the Department of Energy for Production of Xylitol from Biomass

Chicago, IL (October 14, 2008) – 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 II grant by the Department of Energy. The award (of approximately $750,000) will be used to support zuChem’s continued development of a novel, proprietary bioprocess for the production of xylitol from agricultural biomass.

During biofuel ethanol production, waste by-products rich in sugars are produced. By converting these waste byproducts into more valuable products for the food ingredients industry the cost-effectiveness of ethanol production can be enhanced. This zuChem project is focused on developing a bioprocess to transform these waste sugars into xylitol, a sugar polyol that is in high demand by the food ingredient and confectionary industry, thereby improving the economics of ethanol production. zuChem’s proprietary process can also be used to make xylitol from waste byproducts of the corn wet-milling and dry-milling industries.

“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 xylitol,” David Demirjian, Ph.D., President and CEO, zuChem. “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 in addition to enhancing biofuel production economics.”

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.