Hanfeng Evergreen Inc.

Hanfeng Evergreen Inc.

June 23, 2008 19:10 ET

Hanfeng Evergreen Enters Into 100,000 Tonnes per Annum Joint Venture With Shandong Mingshui Great Chemical Group

TORONTO, ONTARIO--(Marketwire - June 23, 2008) - Hanfeng Evergreen Inc. ("Hanfeng" or the "Company") (TSX:HF), a leading producer of slow and controlled release fertilizers in China, announced today that it has signed a Letter of Intent to establish a 50/50 joint venture with Shandong Mingshui Great Chemical Group ("Minghua") to build and operate a 100,000 tonnes per annum ("tpa") polymer coated urea ("PCU") production facility (the "PCU facility") in Shandong province China. The PCU facility is expected to be completed by April 2009 and will utilize Hanfeng's patented polymer coating technology, which was developed internally by its R&D team in China. Estimated cost for the PCU facility is approximately $11.8 million (80 million RMB), 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.

The PCU plant will be constructed at Minghua's Minquan facility in Shandong, significantly reducing the capital costs associated with the construction and installation of the required infrastructure such as buildings, warehouses, underground connections, and heating systems, which are already in place. Part of the PCU produced by the facility will supply Hanfeng's distribution network, which is currently being established in key agricultural regions in China.

Due to the strong demand for its slow release products, Hanfeng's sales and R&D teams have been focusing heavily on new product line development. The PCU that will be produced by the facility will utilize the new coating technology upgraded from that used at Hanfeng's specialty coating plant in Heilongjiang. The thinner polymer coating provides numerous benefits for the agricultural user, including higher nitrogen content, more precise control over the release period, and the ability to better control its production costs.

"I believe conventional urea is due to be replaced by slow-release urea or coated urea in the Chinese fertilizer market in the future, as several large-scale nitrogen enterprises are beginning to take notice of its advantages and are beginning to develop slow-release fertilizers. Hanfeng is a leader in the slow-release technology field. By cooperating with Hanfeng, we are expecting to capitalize on our respective advantages to establish a slow-release fertilizer base in Shandong, in order to satisfy the growing demand for Hanfeng's highly efficient and environmental friendly products," stated Jianzhong Shi, President of Minghua.

"Minghua is a large-scale nitrogen producer in China, renowned for its premium product quality, low cost and advanced operational concept. Its new Mingquan production facility is world class and meets all the required environment standards," stated Xinduo Yu, President and CEO of Hanfeng. "Shandong Province is situated in Central China, and is a major fertilizer market with annual consumption estimated at 10 million tonnes. The partnership with a conventional urea enterprise in Shandong fits in Hanfeng's strategic development plan and also marks a new phase of Hanfeng's growth."

About Shandong Mingshui Great Chemical Group

Shandong Mingshui Great Chemical Group, founded in 1958 as one of the few top professional nitrogen companies in China, is renowned for its technology and R&D capacity, and has been called the "Cradle of Chinese Nitrogen Enterprises". Shanxi Jincheng Anthracite Mining Group, a large-scale coal company of China, owns a 35% equity interest in Minghua, and through its partnership, guarantees an adequate supply of raw material to Minghua. The Mingquan facility is located in Zhangqiu, 40 kilometers east of Jinan, the capital of Shandong province. It currently produces 400,000 tpa of granular urea (this production facility was constructed in 2005 and with production beginning in 2006), 350,000 tpa of prill urea, 380,000 tpa of methanol and 100,000 tpa of coated urea. Minghua also has an electrical power plant, and another facility for urea and chemical production.

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.

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