Hanfeng Evergreen Inc.

Hanfeng Evergreen Inc.

June 08, 2009 08:00 ET

Hanfeng to Expand Joint Venture With Shandong Mingshui Great Chemical Group to 240,000 Metric Tonnes Per Annum

TORONTO, ONTARIO--(Marketwire - June 8, 2009) - Hanfeng Evergreen Inc. ("Hanfeng" or the "Company")(TSX:HF), a leading producer of slow and controlled release fertilizers in China, is pleased to announce that it will build an additional polymer coated urea ("PCU") production line with its 50/50 joint venture partner, Shandong Mingshui Great Chemical Group ("Minghua"). The additional PCU production line will have an annual capacity of 100,000 metric tonnes per annum ("mtpa") and will be constructed next to the newly completed 100,000 mtpa PCU facility, which commenced production in May. With the addition of the new 100,000 mtpa PCU production line and the 40,000 mtpa sulfur coated urea ("SCU") facility acquired last month, the Hanfeng Minghua joint venture will have aggregate production capacity of 240,000 mtpa, making it the largest single PCU and SCU manufacturing facility worldwide.

Construction of the 100,000 mtpa PCU line will commence in August 2009 and is scheduled for completion in the third quarter of 2010. The production line will share the infrastructure, utility supplies and operational management with the existing 100,000 mtpa PCU and 40,000 mtpa SCU plants, enabling significantly reduced administration costs and energy consumption. The estimated cost for this second PCU production line is approximately $5 million (RMB30 million), which will be paid 50/50 by the joint venture partners. Hanfeng will fund its portion with cash on hand and internally generated cash flow.

It has been proven that conventional fertilizer is a major source of non-point pollution. In comparison, SCU and PCU have a more precise control over the nutrient release period, reducing application time, decreasing the fertilizer application rate, while increasing crop yield, and creating fewer emissions and reducing non-point pollution. Field trials jointly conducted by Hanfeng and the Ministry of Agriculture demonstrated that sulfur coated slow release fertilizers can significantly increase crop yield by over 30 percent in some cases. Hanfeng SCU and PCU have won extensive recognition, both from the Chinese government and the agriculture market for their outstanding effectiveness, and their ability to increase yield and improve farm economics, while reducing pollution.

"Since construction commenced at the first 100,000 mtpa PCU facility, we have experienced significant demand from our existing customers for slow release products," stated Jianzhong Shi, President of Minghua. "To satisfy the growing demand, Hanfeng and Minghua have agreed to construct the second 100,000 mtpa PCU facility as we expect customer orders will outstrip our production capacity in the near term. As a large-scale nitrogen enterprise with a 50-year operating history, we are obliged to produce high efficiency, environmental friendly fertilizers. By using Hanfeng's proven technology, our joint venture can realize fast operation at low cost to benefit farmers and at the same time reduce energy consumption and pollution emissions."

"Hanfeng's joint ventures with a large-scale state-owned enterprises are the optimal model to realize rapid expansion and development of our slow release technology," stated Xinduo Yu, President and CEO of Hanfeng. "Capitalizing on Minghua's long established, extensive distribution network and raw material pricing advantage, and our advanced slow release technology and track record on plant construction, our joint venture will not only bring benefits to consumers but to our joint venture partners and shareholders."

About Hanfeng Evergreen Inc.

Hanfeng is the largest producer of slow and controlled release fertilizers in China. It was the first company to introduce the concept of slow and controlled release fertilizers into China's agriculture market with its establishment of the first commercial scale production in China. All production facilities are located in prime agricultural regions of China. The Company is headquartered in Toronto, Ontario and its shares trade on the Toronto Stock Exchange. www.hanfengevergreen.com

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Hanfeng's business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars except for noted otherwise.

Contact Information