Startech Issues Letter to Shareholders

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TO BUSINESS AND TECHNOLOGY EDITORS:

Startech Issues Letter to Shareholders

CONNECTICUT, WILTON, Mar. 7 -/E-Wire/-- The following statement was issued today by Startech Environmental Corp. at their 2001 Annual Meeting of Shareholders:

Good morning Ladies and Gentleman:

I am Joseph Longo, President and CEO of Startech. If I have not already done so, let me take this opportunity to welcome you to the Annual Meeting of Shareholders for Startech Environmental Corp. (Nasdaq: STHK) and thank you for your investment in the Company and sharing in our vision of the future.

2000 was a year of significant events in our corporate history. Three of the most significant events are as follows. The first is the completion of our Showroom that many of you saw earlier today. It has always been clear to us that in order to maximize our sales ability, and to aggressively promote and support the sale and construction of our Plasma Converter throughout industry and government, we needed a world-class facility. As you saw this morning we created such a facility. The way that the Showroom evolved allowed us to incorporate many of the design modifications we have engineered to make the Plasma Converter even more effective and efficient. The completion of our Showroom places Startech in a premier position to exploit the growing industry wide awareness of plasma technology as the new paradigm in waste remediation. And, that paradigm is one wherein waste will be viewed as a valuable renewable resource, rather than as a revenue eroding and problematic liability. We intend to use the facility to continue the sales momentum that has already started early in 2001. While we had planned to reach this point much earlier in our operating history, it is now that we begin our march towards consistent revenue and sales growth.

The second event was the completion of our S-1 Registration Statement with the Securities and Exchange Commission. Although we have been a public company since November of 1995, this was our first full scale SEC review. This type of review took an enormous effort by all Management. It lasted for over five months and examined every aspect of our business. That review was successfully completed in early October of 2000 when our registration was declared effective.

The third event was our listing on the NASDAQ. Again, this also required a large amount of time and attention by Management and it was successfully completed in late October 2000 when we received notice that our application had been approved for listing. This was an important step for us because trading on the NASDAQ will create significant benefits for the company and its shareholders, such as increased visibility to a larger investor base, including international exposure due to NASDAQ's commitment to global outreach, access to an increased pool of capital, and will give investor's greater comfort due to the stringent entrance and maintenance standards employed by NASDAQ for each of its listed companies.

Here are some other important accomplishments and events that have taken place that will help us create increased shareholder value.

1) The additions of Raymond J. Clark and Brendan J. Kennedy to our Board of Directors. Both Mr. Clark and Mr. Kennedy will provide us with extremely valuable skills in their areas of expertise and will be superlative ambassadors to represent the high level of integrity and professionalism the market demands.

2) Increased exposure to the marketplace by being featured in CBS Marketwatch, CEO Cast, The Street.com, The Wall Street Transcript, Chemical Engineering, The Wall Street Reporter, Waste Age, Hydrogen Magazine, US Industry Today and The Hartford Business Journal.

3) Creation of a highly professional marketing brochure a copy of which you have been provided.

4) Moving into our new corporate offices in Wilton, CT

5) Our strategic alliance with Skidmore, Owings and Merrill, and

6) The addition of many important new employees to assist in engineering and production, including Dr. Forest Liang, a world renowned scientist.

Now, the next issue that every one of you is waiting to ask is what has taken so long to produce sales and what is the status of previous announcements? I will provide as much information as I can on this issue without inhibiting our ability to move forward with our partners. Our partners often want us to maintain confidentiality on many aspects of the agreements.

Our original business model was planned around there being a demonstration facility to showcase our technology. Initially, our system in Aberdeen, Maryland was fulfilling this role early in our business plan. At the same time we were using Aberdeen, we continued to build and finalize relationships with various other Distributors, Customers and Representatives. The key component to us in building these relationships was establishing a partner that would purchase, finance and site a system as expeditiously as possible. We received many assurances and promises surrounding the commitments that were made to us by the parties. We believed every party we contracted with had the ability to succeed based upon the representations they made and we relied upon. Unfortunately, a small company such as ours, selling a new technology, does not always have the luxury of dealing with the likes of a fortune 500 company at the start. We relied upon the promises that were made, and in some cases have been disappointed in the outcome. I will elaborate on that statement in a moment.

The business model we had developed was a function of our financial ability at the time we began marketing our product. We simply could not expend the resources necessary to create a world-class showroom and still have the finances to continue our sales efforts. Instead, we developed a Distributor arrangement that provided exclusivity to a specific area to a Distributor in return for that Distributor contracting to purchase a system for demonstration purposes. We felt confident that based upon the Distributor contracts we had in place we could have a system built and delivered without spending our limited capital. We then would use that system to show future customers.

Every Distributor is still required, as a condition of their Distributorship, to purchase a demonstration system to be installed in their area of exclusivity. However, once it became clear to us that contractual commitments that had been made to us were going to be either delayed, or in some cases were no longer viable, we took two steps to correct the situation. The first step was to analyze our relationships and continue those that were still active, although delayed for a variety of reasons by the Distributor or Buyer, and/or end those we felt were no longer capable of going forward. The second step was to immediately commit our focus on building our own world-class facility that was under our complete control. Step number two was only possible from the time we completed our last private placement in November of 1999, a little over a year ago. Our decision to move forward on this was first considered last April. At that time we began to look at possible space for such a facility. After spending a great deal of time and effort in negotiating for a specific property the negotiations broke down when an untenable clause was required regarding responsibility for pre-existing environmental hazards that may have existed at this selected location. That three-month delay caused us to lose valuable time and focus.

Ultimately, the facility many of you toured today was the result of our changed business model that involved us building our own facility rather than waiting for others to fulfill their contractual commitments. We have never been stronger or in a better position to market and sell the Plasma Converter.

Having said the above, we, like many of you, were disappointed in the fact that we did not deliver a system to a customer in 2000. The reasons for this are varied, and some I have mentioned, and often are the result of a myriad of factors, but one reason that is not involved is the ability of Startech to manufacture and deliver a system that operates exactly as we claim. There has not been one announcement or sales initiative that we did not believe was going to result exactly as announced. Some of these announced sales have simply been delayed at the request of the buyer, while others are no longer being pursued because the potential buyer could not proceed.

I already mentioned the obvious fact that small companies do not always get to contract with established, financially secure partners. Chances sometimes need to be taken. This fact, and this fact alone, caused us to enter into some contracts and initiatives that did not come to fruition. Again, every Agreement we entered into was a valid binding contract that we believed could be successful. Fortunately, as we have progressed as a company, the companies we become involved with are in a much better position to follow through on their commitments. Our most recent sale to Eiko Systems Company is an example of this. Others, although fully committed to honor their contractual obligations, have caused the delay of the completion of their system.

The initial sale we announced for Japan, while not cancelled, is not being actively pursued due to the actions of the Buyer. Some post-contractual demands were made that we could not support and no further progress payments have been made.

The most recent sale in Japan, to Eiko Systems Company, is on a fast track and is a top priority. South Africa and Taiwan are still very much active and we are working diligently with our Distributors to move those contracts forward. We can say that the general nature of the delays in these deals relate to financing, system size and configuration and regulatory protocols. Each of the above mentioned sales are firm contracts with a deposit. Our relationships with our existing Distributors on those deals are excellent and we fully expect that these sales will result in delivered systems. Startech stands ready, willing and able to proceed. We have been very accommodating to each of these buyers and continue to work in a manner that best serves the interests of Startech and its shareholders.

Initiatives in numerous domestic and international markets, some that we have announced and others we have not, are in various stages of the sales cycle. It has not been our practice to announce every new relationship we enter into that may produce a sale. We currently have active initiatives in various parts of the United States, China, Egypt, Ireland, Poland, Australia, Malta, Japan, South Africa, Taiwan, Canada, Italy, Philippines, Columbia, India, Bangladesh, Kuwait, Saudi Arabia, Greece, and many others. We continue to cast as wide a net as possible. Other initiatives that we have previously announced, such as Puerto Rico, Korea and Hawaii are no longer moving forward with the exact same parties on the same projects we have announced, but we do continue to market and sell our product in those geographic areas.

The new millennium is an exciting time in the history of the world. It is a time that calls for revolutionary answers to the same old problems that have plagued mankind since the advent of the industrial age. Over the past five years we at Startech have been attempting to educate government and industry about the power of plasma. That effort, although frustrating slow at times, is beginning to pay dividends. We now stand at the threshold of an untapped marketplace that patiently awaits the effective solution to its problem. We believe that Startech has such a solution.

Again, Startech has never been stronger. We finally have all the tools necessary to pursue an aggressive marketing campaign. Our new marketing brochure, greater investment community standing, world-class showroom and superior product will position us to make 2001 the year Startech Environmental Corp. is put on the map. To all of you who have just invested, we say welcome. To all of you out there who have been so patient and faithful we say thank you.

Safe Harbor for Forward-Looking Statements: Except for the statements of historical fact, the information presented here today constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, opinions and beliefs of the company and its Management, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, in the continued acceptance of Plasma based technologies as an effective form of material destruction.

Startech Environmental Corp.

Robert DeRochie for Startech Environmental Corp., [REDACTED-PHONE]/

/Company News On-Call: http://www.prnewswire.com/comp/113537.html or fax,

[REDACTED-PHONE], ext. 113537

http://www.startech.net

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