A Brief History of AERT

Since 1989, AERT (OTCBB:AERT - News) has pioneered the use of recycled polyethylene plastic in the manufacture of composite building materials.. AERT has been built on persistence, hard work, and integrity. With its constantly evolving portfolio of patented and proprietary recycling technologies, AERT has been widely recognized as a leader in resource conservation innovation and received the EPA Award for Environmental Excellence for its process of converting scrap plastic to composite outdoor decking. AERT converts reclaimed plastic and wood fiber waste into quality outdoor decking systems, fence systems, and door and window components. The Company is the exclusive manufacturer of ChoiceDek(r) decking, which is available in multiple colors and is sold in Lowe's Home Improvement stores nationwide. See http://www.choicedek.com for more information. AERT's MoistureShield(r) decking program is expanding and products are now available throughout the U.S. See http://www.moistureshield.com for product information or to find a regional distributor or dealer.

 AERT operates manufacturing facilities in Springdale and Lowell, Arkansas and recently commenced operations at its Green Age recycling facility in Watts, Oklahoma. For more information on the Company, visit http://www.aertinc.com.

 As we go forward, the guiding principles for AERT will be:

• Creating customer delight.

• Serving our customer’s needs with imagination and energy.

• Manufacturing the highest quality products to the most exacting standards.

• Striving to become the low cost producer.

• Developing products for the future.

The Story of AERT

The Brooks family and associates of Springdale, Arkansas founded AERT in 1989. The Brooks family developed a new technology for combining recycled wood fiber and recycled polyethylene plastic to form a highly durable, non-toxic, termite resistant engineered composite building material that is used in the building trades. The new composite was initially used to replace high weather impacted wood components such as door rails, door subsills, and windowsills. Subsequently, the new composites were used for applications in decking and exterior trim.

AERT’s initial manufacturing facility was opened in 1989 just outside of Junction, Texas. For decades that area had been known for its production of cedar oil that is used in furniture polish and many other applications. A byproduct of cedar oil production is spent cedar fiber that often has no other use and must be disposed of. AERT located its first manufacturing plant near several of the cedar oil mills to take advantage of the abundant supply of cedar fiber.

The initial products manufactured at the Junction, Texas plant won wide acclaim for their durability, far surpassing conventional wood in their ability to withstand the ravages of rot, termites, and harsh environments. The cedar aroma of the products manufactured at the Junction facility was also a big hit with customers.

In 1989, AERT became one of the first plastic recycling companies to successfully complete an Initial Public Offering of stock and become listed on the NASDAQ exchange (AERT).

In 1990, AERT introduced the MoistureShield® line of door and window components. These highly functional components have been incorporated into millions of doors and windows by manufacturers like Therma Tru, Crestline, Vetter, Premdor and many others. The door and window component market is highly competitive and requires exacting specifications. Only the most stable and durable composites can qualify for this use. AERT is pleased that it’s MoistureShield® products have been used in many of the nation’s most prestigious homes.

The Company began activities at its Plastics Reclamation facility in 1990. Since that time, AERT has further developed and patented its proprietary waste plastics reclamation technologies which allow it to recover waste plastics from the by-product of other recycling operations, as well as post-consumer and post-industrial waste streams.

AERT entered into a joint development agreement with the Dow Chemical Company of Midland, Michigan in 1991 for the purpose of developing polyethylene film recycling technology. As a result of this agreement, AERT was able to develop new approaches to polyethylene film recycling and gain a more clear understanding of the unique opportunities it had in composite manufacturing.

In 1991, AERT was featured on CNN’s Science and Technology segment as a promising new technology company. AERT’s patented technology for recycling polyethylene and wood drew a great deal of attention for its functionality in recycling waste materials into new products with significantly more utility and life expectancy than the products they were replacing.

AERT has been awarded a series of patents relating to the technology for manufacturing wood and polyethylene composites. In 1998, the United States Patent and Trademark Office awarded AERT with U.S. Patent No 5759680 for the extruded composite material used exclusively by AERT to manufacture its high quality building products.

AERT began manufacturing decking systems in 1992 which were marketed under the trade names LifeCycle™. In that same year, AERT provided the decking material for the South Padre Island Convention Center Board Walk, which was the Company’s first high visibility public walkway.

In 1995, AERT chose Weyerhaeuser as its national distribution and marketing partner for decking and accessories. Weyerhaeuser selected the name ChoiceDek® to apply to the decking products manufactured for it by AERT. Since that time, Weyerhaeuser ChoiceDek® has become a leading name in the composite decking industry. The association between AERT and Weyerhaeuser has continued to grow over the years enabling both companies to participate in building an exciting future that neither would have been able to experience alone.

Since its inception, AERT has been dedicated to making superior products with lower environmental impacts and using recycled materials. AERT’s commitment to satisfying customer needs and protecting the environment has won it recognition from many sources. In 1995, Texas Governor, George W. Bush appointed Joe G. Brooks, Chairman of the Board for AERT, to the Clean Texas 2000 Board. By 1998, AERT had become one of the larger polyethylene and wood recyclers in the U.S.

In recognition of the advancements that AERT had made in recycling technology and market development for recycled products, the U.S. Environmental Protection Agency awarded AERT’s Junction, Texas manufacturing facility with the U.S. EPA, Region 6 Environmental Excellence Award. This award is proudly displayed at both the Junction facility and at the company’s corporate headquarters.

Growth in the company’s core business areas and development of significant markets for its products on both the east coast and the west coast led to opening a new manufacturing plant in 1997. After an extended search and considerable evaluation, it was determined that the new plant should be located in Springdale, Arkansas. The new plant could more easily service the company’s growing customer base and could take advantage of lower transportation cost for both raw materials and finished products.

Springdale is located in northwest Arkansas and is surrounded by the Ozark Mountains. The area is known for its hardwood forests and has become the home for a wide variety of wood manufacturing businesses. A vast supply of premium grade, residual hardwood oak fiber is available from local wood manufacturing and forestry businesses. Since the Springdale manufacturing plant opened, it has been responsible for recycling over 100 million pounds of this residual wood waste that would have otherwise gone to local landfills for disposal.

In 2001, AERT opened a plastic recycling and warehousing facility at Springdale, allowing the company greater flexibility in processing secondary plastics and preparing them for use as raw materials at both the Springdale and Junction manufacturing plants. The plastic processing and warehousing function has continued to grow. Additional, plastic processing capacity is being planned and will be opened in the near future.

In May 2001, the National Evaluation Services, Inc. completed its review of Weyerhaeuser ChoiceDek® and issued National Evaluation Report # 596, which includes decking, stair and handrail uses. The National Evaluation Services is recognized widely by building code officials as the authoritative voice for safety and reliability in building materials.

In 2002 AERT and Weyerhaeuser entered into a long-term strategic alliance with Lowe’s Home Improvement Warehouse for the exclusive rights to market ChoiceDek® Premium into the North American home improvement warehouse market. Lowe’s is the first major home improvement warehouse to make a national commitment to a composite decking product.

In 2003 AERT opened plastic processing plants in Lowell, Arkansas and Alexandria, Louisiana. The added raw material processing capacity provided AERT with a new dimension in cost and quality control. Increasingly through 2004, the new raw materials processing capacity is making a positive impact on quality, productivity and profitability. Productivity is reaching record levels as more precisely refined raw materials are being provided to the extrusion plants.

New automated finishing lines were added at the Springdale, Arkansas and Junction, Texas extrusion plants in 2003 and 2004. These lines were constructed to handle the high volume of new decking products, including embossed and colored decking, that have been developed by AERT.

A new bond financing was completed in 2003 that provided much needed capital for financial restructuring. During the early part of 2003, the Junction, Texas extrusion plant suffered loss due to a fire that put the plant out of service for several months. The plant was put back in service in 2003 and reconstruction is continued in 2004.

In May 2007, AERT added a new extrusion facility called Springdale South. Springdale South's extrusion facility houses the company's newest and largest wood/plastic composite extrusion line, which incorporates several innovations and technologies designed to increase throughputs, improve operation efficiencies, and reduce manufacturing costs. Springdale South successfully begun production of its latest generation "two-up", multiple-profile composite extrusion machinery. The new extrusion line, now fully operational, is significantly larger than AERT's other lines and is designed to run two products simultaneously in lengths of up to 20 feet at a combined rate of up to 10,000 pounds per hour. The interchangeable extrusion die head design allows manufacturing of multiple products on the same line, without sacrificing throughput or line speed. This new line features innovative downstream process automation as well.

In 2007, patents were filed and a program was initiated with Allstate Investments to build a large, commercial scale plastic recycling, blending, and reformulation facility near Watts, Oklahoma.