SOURCE: Yasheng Group

March 07, 2006 08:00 ET

YaSheng Group's "500,000 Tons of Methanol" Moves Forward With the Approval From China GanSu Reform & Development Committee

REDWOOD CITY, CA -- (MARKET WIRE) -- March 7, 2006 -- China GanSu Reform & Development Committee has approved the initial Plans for YaSheng Group to produce 500,000 tons methanol per year. The GanSu Reform and Development Committee has finished making and approved the required safety and environmental assessment reports, with the government feasibility report expected to be completed shortly. This is a key project and considered a high priority for the Government of GanSu Province, China, and the YaSheng Group. This project has received strong financial and political support by the Chinese government in the pursuit of alternative energy.

This is good news for YaSheng Group by winning full governmental support and project specific approval, allowing the company to finalize the capitalization of the project with construction to begin shortly after. The total investment for this project is approximately $224 million USD among which $67 million USD is expected to be invested by the YaSheng Group with the remaining investment contributed by the GanSu Province of the PRC.

With the companies strategic cooperation with Jiquan Steel Company, Qinghai Sebei Gas Field, and China National Petroleum Corporation supplying natural and Liquid Gas to power the project, will increase the profitability substantially and create several environmental benefits.

Compared with production of methanol on the same scale with similar technology, the project's initial investment will decrease by 38%, the cost of powering the production decreases 31%, and the consumption of raw materials decreases by 22.6%, with toxic emission reduced by 22.6%.

Jiquan Steel Company will utilize a by-product of their production facilities to supply 1.4 billion cubic meters of liquid gas. This by-product is made from a pollutant gas produced by their blast furnaces and converts it into a more environmentally safe use. These methods live up to YaSheng commitment to the environment by the recycling of resources, optimizing the distribution of energy, and improving environmental efficiently.

The Current Market demand and methanol consumption in the North Western region of China in 2002 was 330,000 tons and in 2004 increased to 1.05 million tons. It was expected during 2005 the demand will surpass 1.5 million tons. The current price is $300 hundred USD per ton.

Methanol is a chemical compound and is utilized as a raw material for the chemical industry, fuel, solvent and antifreeze and other industrial uses. The YaSheng Group's production plans of Methanol is expected to address China's growing concern over its energy sources and supplies.

Please visit the related links to previous "YaSheng Group's Methanol Project" press releases to learn more about this exciting project: YaSheng Group Announces Additional Details of Methanol Production (http://biz.yahoo.com/iw/051116/0101446.html) and YaSheng Group to Produce 500,000 Tons of Methanol Annually (http://biz.yahoo.com/iw/051110/0100789.html).

About YaSheng Group:

The YaSheng Group (OTC: YHGG) is a diversified industrial conglomerate incorporated in Redwood City, California, operates in hi-tech agriculture, salt chemistry and biological technology as its core business with advantages in rich land, mineral resources, capital and technology reserves.

Through its 136 subsidiaries, the company operating categories include: chemical engineering, agricultural production, biotech, pharmaceuticals, textile products, printing and dyeing, commercial trading, beverages and inorganic salt manufacturing. With total assets of approximately $1.5 billion USD and over 15,000 employees, YaSheng Group has 155,097,355 shares issued and outstanding as of December 1, 2004.

Further information concerning YaSheng Group can be found on the Corporate website:

http://www.yashenggroup.com

Forward-Looking Statements:

Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.

Contact Information

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