SOURCE: New Oriental Energy & Chemical Corp.

July 07, 2008 08:30 ET

New Oriental Energy & Chemical Says Government Decision to Reduce the Value-Added Tax (VAT) on Dimethyl Ether (DME) Reflects Its Strong Interest in Boosting Utilization of Coal-Based Alternative Energy

The Company Also Sees Favorable Impact on Its FY '09 Bottom Line

NEW YORK, NY--(Marketwire - July 7, 2008) - New Oriental Energy & Chemical Corp. (NASDAQ: NOEC), a specialty chemical and emerging alternative fuel manufacturer in The People's Republic of China (PRC), said today that it greatly welcomed the joint announcement of China's State Administration of Taxation and The Ministry of Finance to lower the value-added tax (VAT) on dimethyl ether (DME) from 17% to 13%. According to the Company, this reflects strong governmental interest in boosting the usage of clean, more economical coal-based alternative energy, and moves the industry into a new development phase. Further, the decision to lower the tax is expected to have a favorable impact on New Oriental's bottom line in the remaining three quarters of fiscal year 2009 which began on April 1, 2008.

Increased Push to Replace Diesel with DME

Mr. Chen Si Qiang, CEO and Chairman of the Board of New Oriental Energy & Chemical Corp., commented, "The government's decision reflects the current energy situation in China characterized by continually rising international oil prices, significant air pollution problems and the seeming imbalance in the Chinese refined oil supply between petrol and diesel fuel and the serious shortage of diesel oil resources. Given China's plentiful supply of coal, the only way out is to push harder on the development of coal-based alternative clean energy and ether products. The most realistic way this will move forward is to replace the usage of diesel with coal-based DME utilizing the advanced technology available to accomplish this. Clearly, the reduction in the DME VAT further advances the development of this industry. Additionally, the reduction can be expected to improve our gross margins on DME production in the remaining quarters of the year in proportion to the decrease in the tax."

About New Oriental Energy & Chemical Corp.

New Oriental Energy & Chemical Corp. which recently upgraded its US listing to the NASDAQ Global Market (NASDAQ: NOEC), is an emerging alternative fuel and specialty chemical manufacturer based in Henan Province, China. The Company is focused on the production of Dimethyl ether (DME), methanol and fertilizer products. The Company sells its products primarily through a network of distribution partners. Additional information on the Company is available on its website at www.neworientalenergy.com.

Safe Harbor Statement

This press release may contain forward-looking statements concerning New Oriental Energy & Chemical Corp. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology or product techniques, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. New Oriental Energy & Chemical Corp. undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Contact Information

  • Contact:

    Mr. Wang Gui Quan
    President
    New Oriental Energy & Chemical Corp.
    Xicheng Industrial Zone of Luoshan, Xinyang
    Henan Province, The People's Republic of China
    Tel: (011-86) 376-2169211

    Investors:

    Mark Miller
    East West Network Group
    mmeastwest@hotmail.com
    Ph: (770) 436-7429

    Press:

    Ken Donenfeld
    DGI Investor Relations
    donfgroup@aol.com
    kdonenfeld@dgiir.com
    Ph: (212) 425-5700
    Fax: (212) 425-6951