Hanfeng Enters Into SCU Joint Venture Agreement With Fengxi Fertilizer Group
CCNMATTHEWS
Hanfeng Evergreen Inc.
August 9, 2007 - 07:30:01 AM
Hanfeng Enters Into SCU Joint Venture Agreement With Fengxi Fertilizer Group
TORONTO, ONTARIO--(CCNMatthews - Aug. 9, 2007) - Hanfeng Evergreen Inc.
("Hanfeng" or the "Company") (TSX:HF), a leading provider of slow and
controlled release fertilizers in China, announced today that it has entered
into a 50/50 joint venture agreement with Shanxi Fengxi Fertilizer Group Ltd.
("Fengxi") to build and operate a 50,000 tonne per annum sulphur coated urea
("SCU") production facility (the "SCU facility") in Shanxi province in China.
The initial phase of the SCU facility is expected to be completed in April
2008. The SCU facility's design will allow additional production capacity once
the initial phase has been successfully tested and commissioned. Estimated
cost for the initial phase is approximately $6.9 million ($50 million RMB),
which will be paid 50/50 by the joint venture partners. Hanfeng will fund its
portion by cash on hand.
With production capacity of 6 million tonnes per annum of fertilizer and
chemical products, Fengxi is one of the largest nitrogen fertilizer producers
in China. Within Shanxi province, Fengxi currently produces 3 million tonnes
of urea annually with plans to further increase to 3.9 million tonnes.
Fengxi's coal gasification urea production provides quality urea at extremely
competitive costs.
The SCU facility will be constructed immediately next to Fengxi's urea finish
line, significantly reducing the capital costs associated with the
construction and installation of required infrastructure such as buildings,
warehouses, underground connections, and heating systems, which are already in
place. The SCU produced by the facility will be marketed primarily to wheat,
corn and cotton growers, which is the primary crop in the province.
Per an existing agreement, Agrium has an exclusive right to acquire 50% of
Hanfeng's interest through a holding company in Canada for all future SCU
projects in China for a period of 18 months ending on April 2009.
"Hanfeng's future growth will be driven by the expansion of our existing
production base and through the roll out of our Joint Venture strategy,"
stated Mr. Xinduo Yu, President and CEO of Hanfeng. "Our proven track record
and leading position in China's slow and controlled release fertilizer market
provides us the opportunity to partner with industry leaders like Fengxi.
Their production facilities are best in class and are located in the largest
wheat and cotton producing provinces in China. We could not be more pleased to
be working with this well-respected partner."
"Slow and controlled release fertilizers are the future for China's
agricultural industry," stated Mr. Haishui Dong, President and Chairman of
Fengxi. "Hanfeng is recognized as the only established developer and producer
of these products. They have a proven track record of profitably
commercializing patented technologies that are widely accepted by the market
in China. We look forward to a long and successful partnership with them."
About Fengxi Fertilizer Group Ltd.
Shanxi Fengxi Fertilizer Industry (Group) Ltd., ranks as one of the top 50
enterprises in the chemical industry in China and in the top 10 in the
Country's nitrogen fertilizer industry. Fengxi is a state-owned coal-chemical
group enterprise with business units in fertilizer and chemical production,
and machinery manufacturing. It is the largest manufacturing enterprise of
synthetic ammonia, urea and methanol in Shanxi Province, with production
capacity of 6 million metric tonnes of fertilizer and chemical products in
total. Located in the boundary of Shanxi, Shaanxi and Henan, it has 1000
professional technical staff, and is a flagship company among the chemical and
industrial enterprises in China.
About Hanfeng Evergreen Inc.
Hanfeng is a leading provider of slow and controlled release fertilizes to
blenders, the agriculture market and the urban greening market. Hanfeng was
the first to introduce the concept of slow and controlled release fertilizers
into China's agriculture market with its establishment of the first commercial
scale slow-release fertilizer 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.
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