Entry into organic market

Treatt PLC
26 February 2007




TET.L
                                   TREATT PLC
                                   ('Treatt')

                                   Announces
                   Entry into Organic and Fair Trade Markets
                                      Via
                         Acquisition of 50% of Earthoil


Treatt plc, one of the world's leading independent ingredients suppliers to the
flavour and fragrance industries, is pleased to announce its entry into the
organic and cosmetics markets through the acquisition of 50% of the issued share
capitals of Earthoil Plantations Limited and Earthoil Kenya Proprietary EPZ
Limited (together known as 'Earthoil'). Earthoil manufactures and supplies
organically certified and ethically traded essential oils and vegetable oils,
mainly for the cosmetics industry. The organic market represents a new area for
Treatt with high growth potential. The total consideration for the acquisition
is £2.55 million, to be satisfied by a mix of cash, loan notes and ordinary
shares. Additionally, Treatt has the option to acquire the remaining 50% of the
issued share capital of Earthoil from 2012.

About Earthoil

Established in 2001 and with its headquarters in Lichfield, Staffordshire,
Earthoil is a specialist in its field, growing, manufacturing, sourcing and
trading high quality, organically certified essential oils and vegetables oils
(also known as 'nut' or 'seed' oils) as well as other natural extracts. All
Earthoil's organic products are certified by the Soil Association and other
bodies approved by IFOAM, (the International Federation of Organic Agriculture
Movements), the worldwide body for organic agriculture.

Earthoil both grows its own products in plantations in southern Africa and has a
network of well-established relationships with organic farmer groups throughout
the world from whom it purchases products at fair and sustainable prices.
Earthoil is therefore able to offer a broad range of organic essential oils and
vegetable oils, including: tea tree oil, peppermint oil, lemon oil, apricot
kernel oil, sweet almond oil, rosehip oil, cocoa butter and papaya seed oil. It
has operating facilities in both the UK and Kenya, with its manufacturing base
located just outside Nairobi within an Export Processing Zone, which offers
favourable trading terms, including certain tax exemptions.

Earthoil has established a strong, reputable brand name and distributes to
customers requiring 100% organic products in the UK, Europe, the US, Australia
and Asia. Customers include The Body Shop, Aveda and Neal's Yard Remedies.
Currently, its products are principally used by the cosmetics industry.

Financial Information on Earthoil

The total gross assets of Earthoil as at 31 December 2006 were £1.1 million
(unaudited). Both Earthoil companies were approximately break-even for the
financial year ended 31 December 2006. The acquisition should be earnings
neutral for Treatt in the current financial year and is expected to be earnings
enhancing in the next financial year to 30 September 2008.

Growth Opportunity

The Directors of Treatt believe that the organic and fair trade markets offer
substantial growth opportunities in the cosmetics industry as well as in the
flavour and fragrance industry. There is considerable and growing demand in
international markets for organic and ethically traded raw materials for use in
food and health & beauty-related products.

In Europe, where the organic market has been growing fastest, consumers spent
€20.7 billion in 2004 on organic food and beverages, with UK consumers spending
€2.3 billion on organic food*. Spend on natural and organic cosmetics in Europe
is expected to have surpassed €1 billion for the first time in 2006**. Growth in
organic retail sales across the EU is expected to average 8% per annum***. In
the US, in 2005, the organic market was worth an estimated $14.6 billion, with
forecast growth of 10-15% per annum until 2010****. The US natural and organic
personal care market (skin care, hair care and cosmetics) is projected to grow
from $5 billion in 2004 to $8 billion by 2009, an increase of 58%*****.

By investing in Earthoil at this stage in its development, Treatt will
immediately take a strategic position in the supply of organic essential oils to
its existing customer base in the flavour and fragrance industries. Earthoil's
expertise in the manufacture and supply of vegetable oils will provide a new and
much sought after complementary addition to Treatt's existing and extensive
product range. Treatt will be able to work with Earthoil to develop Treatt's own
range of essential oil, natural isolate and Treattarome(TM) ('From the Named
Food') natural distillate products for the 100% organic food and health & beauty
markets where it does not currently have a significant market presence.

In addition, Treatt will be able to add significantly to Earthoil's growth
potential both in terms of its financial backing and also as a result of its
many years' experience in the manufacture and sale of its products into over 90
countries worldwide through an extensive global network of agents. Treatt will
also be able to combine effectively its procurement expertise with that of
Earthoil's in order to obtain increased supply of organic and ethically traded
products to service the large potential market.

Management

The existing management team at Earthoil, Campbell Walter, Sales and Marketing
Director, Wayne Barratt, Director of Global Operations, and Tony Silvester,
Finance Director, will remain in the business and continue to operate and manage
Earthoil. On completion of the 50% acquisition, three Directors representing
Treatt will join these three Directors on the Board of Earthoil. Each Earthoil
Director has signed a service contract with a three year initial term, with a
rolling six month notice period expiring any time on or after conclusion of the
initial term.

Details on the consideration

The total consideration for the acquisition of 50% of Earthoil is £2.55 million,
comprising £1.2375 million in cash, £0.675 million in Consideration Loan Notes
and £0.6375 million satisfied through the issue of 188,945 Treatt Ordinary
Shares at a price of 337.4 pence.

From 2012, Treatt also has the option to acquire (the 'Call Option') the
remaining 50% of Earthoil. In addition to this, the existing Earthoil
shareholders will have the option to oblige Treatt to buy (the 'Put Option'),
the remaining 50% of Earthoil shares (which will continue to be held by the
existing shareholders) at the 'Option Price'. Exercise of either option is
subject to shareholder approval. The existing Earthoil shareholders will not be
able to enforce the Put Option unless it has met a certain level of pre-tax
profit.

The Option Price will be 50% of eleven times the average pre-tax profit (for
both Earthoil companies combined) of the two audited financial years ended 31
December prior to exercising the option.

Application has been made to the UK Listing Authority and to the London Stock
Exchange for admission to the Official List for the listing of the 188,945 new
Treatt ordinary shares. These shares will rank pari passu with the existing
ordinary shares in issue. It is expected that admission will become effective on
1 March 2007.

In addition, Treatt is subscribing £1.35 million for Earthoil Loan Notes,
repayable from 2009 onwards. Treatt is also subscribing £25,000 for 50,000 new
ordinary shares in Earthoil Plantations Limited. Completion of the acquisition
of Earthoil and the subscriptions for Earthoil loan notes and shares is
conditional on admission to the Official List of the 188,945 new ordinary shares
in Treatt which is expected to take place on Thursday, 1 March 2007.


Edward Dawnay, Chairman of Treatt plc, commented,

'This is an exciting new development for the Group, taking us into the organic
and fair trade markets and in particular, the cosmetics sector, which we do not
currently supply.

There is a large and increasing demand for organic ingredients from both the
food and health & beauty sectors and we believe Earthoil offers an excellent
strategic fit with Treatt's existing businesses in the UK, US and China.

Earthoil has built up an excellent reputation within the market and we believe
there are significant opportunities working together to create a global market
leader in the supply of organic and fair trade essential and vegetable oil
products.'



For further information, please contact:

Treatt plc                          Tel: [phone]
Hugo Bovill, Managing Director
Richard Hope, Finance Director

Investec                            Tel: [phone]
James Grace

Biddicks                            Tel: [phone]
Katie Tzouliadis

Or visit:                           www.treatt.com
                                    www.earthoil.com

Sources:

* Source: Organic Europe, Organic Market Information, Datamonitor
** Source: cosmeticsdesign.com
*** Source: FiBL
**** Source: OTA 2006 Manufacturer Survey
***** Source: US Market for Natural & Organic Personal Care Products

About Treatt plc

Treatt is a global supplier of ingredients to the flavour and fragrance
industries. These ingredients are mainly based on essential oils, which are
distilled or blended. Aroma chemicals and a range of Treattarome(TM) natural
distillates, manufactured from the named food, are also supplied. Typical
products including a Treatt ingredient could range from air fresheners,
cosmetics, shampoos and soaps to soft drinks, confectionery and basic
pharmaceutical products. Treatt is a world leader in the supply of essential
oils for these uses.

There are hundreds of different essential oils extracted from many different
organic materials. Some examples of common oils are peppermint, lime, lavender,
orange and eucalyptus. Essential oils have been used as flavour, fragrance and
cosmetic ingredients for centuries.



                      This information is provided by RNS
            The company news service from the London Stock Exchange