Hanfeng Evergreen Inc.
TSX : HF

Hanfeng Evergreen Inc.

June 23, 2008 19:38 ET

Hanfeng Expands Internationally Through 200,000 Tonne per Annum NPK Joint Venture in Indonesia

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 entered into a letter of intent to form a joint venture with PT. Matahari Kahuripan Indonesia ("MAKIN Group"), a major Indonesian palm oil and tobacco producer, and PT. Sumber Agrindo Sejahtera ("Sejahtera Group"), the largest agricultural distributor in Indonesia, to build and operate a 200,000 tonne per annum ("tpa") slow release NPK fertilizer ("NPK") production facility in Surabaya, Indonesia. The plant will utilize patented slow release technology developed by Hanfeng's R&D team in China. The preliminary budget for the facility is approximately $30 million, which will be paid by the joint venture partners based on ownership percentage (Hanfeng 34%, MAKIN Group 33%, Sejahtera Group 33%). Hanfeng will fund its portion with cash on hand and internally generated cash flow.

Surabaya is the second largest city in Indonesia, with a population of approximately 6 million. The site for the proposed slow release NPK facility is 3 kilometers away from the urea supplier and 12 kilometers from Surabaya port, the second largest port in Indonesia. The required land has been secured and a detailed feasibility study is underway. Construction on the 200,000 tpa slow release NPK plant is expected to commence in the fall of 2008 and completed by September 2009. Once the plant is in operation, it is expected that joint venture partner MAKIN Group will consume approximately 80 percent of the production. The remainder will be distributed by Sejahtera Group in Indonesia and Malaysia. Additional land is available for future expansion of the facility.

"This plant marks Hanfeng's first venture where we will utilize our own slow and controlled release technology to establish production outside of China. Hanfeng's proven slow release technologies attract significant international interest, which we can leverage to multiple markets globally and create additional opportunities for future growth," said Mr. Xinduo Yu, President and CEO of Hanfeng.

The fertilizer products produced by the NPK plant will target the tobacco and the rapidly growing palm oil markets. The Southeastern Asia region is the largest producer of oil palm in the world. As a major source of bio-diesel fuel, policies have been implemented in Indonesia, Malaysia and other countries to encourage farmers to plant oil palm. MAKIN Group estimates that the current 4 million hectares of oil palm plantations in Indonesia will grow to 7 million hectares by 2015. Hanfeng's slow release fertilizers boost the growth of oil palm trees, as well as reduce the amount of fertilizer leached during the regions long rainy seasons. Through extensive field trials and promotions with MAKIN Group and Sejahtera Group, Hanfeng's slow release fertilizers have been well received by customers and the products have been registered with various local authorities. Annual demand in the Southeast Asia region for these types of slow release fertilizers is estimated by MAKIN Group at approximately 4 million tonnes. Currently there are only five NPK plants in Indonesia, none of which is producing slow release fertilizers.


"We are very pleased to work together with Hanfeng in Indonesia to establish a slow release NPK plant. Our main crops are oil palm trees and tobacco. Most of the slow release fertilizer from this project will be used at our own plantation, which I believe will significantly increase our crop yield as well as bring us new opportunities in the future," said Mr. Heryanto Sutanto, the CEO of MAKIN Group.

The Group Managing Director of Sejahtera Group, Mr. Yudi Limardi said, "Hanfeng's slow release fertilizers are particularly suitable for the Southeastern Asia region. With two years of field trials, Hanfeng has also designed the specific releasing cycle that is specifically fit for the need of cash crops, such as oil palm and tobacco. This product has been well received by our customers. With the project in Indonesia, we will be able to further reduce costs for our customers. We are confident of the future potential as well."

Hanfeng will hold a conference call at 10:00 am ET on Tuesday, June 24, 2008. Analysts and investors are invited to participate on the conference call:



Date: Tuesday, June 24, 2008
Time: 10:00 am Eastern
Dial In Number: 416-641-6136 or 1-866-299-8690
Taped Replay: 416-695-5800 or 1-800-408-3053 (available for 7 days)
Taped Replay Passcode: 3265472


About Matahari Kahuripan Indonesia ("MAKIN Group")

MAKIN Group is one of the ten largest companies in Indonesia, and the second largest domestic tobacco producer. With more than 20 subsidiaries, its scope of operation includes tobacco plantation and tobacco manufacturing, as well as oil palm plantation and production. MAKIN Group specializes in oil palm production and has approximately 1.7 million hectares dedicated to oil palm, which is expected to expand to 3 million hectares by 2015.

About Sumber Agrindo Sejahtera ("Sejahtera Group")

Sejahtera Group is the largest agricultural distributor in Indonesia. It distributes fertilizers, pesticides, and agricultural products and equipment through its network in Malaysia, Indonesia, Thailand and other Southeast Asian countries.

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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