LOS ANGELES and SHENZHEN, China, May 7 /Xinhua-PRNewswire-FirstCall/ -- Gulf Resources, Inc. (the "Company") (OTC Bulleton Board: GUFR), a leading provider of chemical products used in oil and gas field explorations, oil and gas distribution, and oil field drilling announced today that its wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Company Limited ("SYCI"), signed a long-term cooperative agreement with the Huaneng Yimin Power Plant, a division of Huaneng Yimin Coal & Electricity Co. Ltd. ("HYCEC") to become its exclusive supplier of biocide. Gulf Resources expects this agreement to contribute $1.1 million in product sales and a net profit of $150,000 during 2007.
"HYCEC" is a conglomerate and one of 52 National Key Projects, which has several subsidiaries comprising of power plants and open-pit mine production units, including the Yimin Coal Field.
Generic biocide chemical products generally used with power generation equipment and pipelines tend to accumulate highly toxic substances and typically have an effective life span of two to three days. SYCI's research and development efforts have enabled the Company to develop an efficient, broad-spectrum of multi-purpose, non-toxic, environmentally friendly biocide which carries a bactericidal rate of 98 percent and maintains an effective life span of six to eight days. Management estimates this process will yield a twelve percent production cost savings compared to traditional biocide.
SYCI was able to secure this exclusive supply contract through a successful bidding process. The company's superior proprietary technology and its quality after-sales customer service were cited as the reasons for being awarded the business with "HYCEC". The Company anticipates revenues from this agreement will grow at least twenty percent per year for the foreseeable future.
Mr. Ming Yang, CEO of Gulf Resources, commented, "We are very pleased to formalize this exclusive supply agreement with Huaneng Yimin Coal and Electricity Co. Ltd. This relationship offers another avenue for growth by providing a conduit to the large, established power generation chemicals market. We believe this relationship serves as a testament to our innovative research and development capabilities, in addition to the quality customer service we provide."
About Gulf Resources, Inc.
Gulf Resources, Inc. operates through two wholly-owned subsidiaries: SCHC which is engaged in manufacturing and trading Bromine and Crude Salt in China. Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture, and SYCI which manufactures chemical products utilized in oil & gas field explorations and as papermaking chemical agents. For more information, please visit http://www.gulfresourcesco.com .
About Huaneng Yimin Coal & Electricity Co. Ltd.
HYCEC located in Inner Mongolia, covering 99.28 square kilometers, is large-scale coal & electricity consortium with 5,061 employees. Currently HYCEC has two Russian-made 500MW power generation units implemented in 1998 and 1999, which are supported by an open pit coal mine with an annual production capacity of tons of coal 7.7 million. By the end of this year, 2 more domestic-made 600MW units and additional open pit mine maintaining 6 million tons of annual production capacity will become part of its operation. The company's long-term operating goal is to achieve a capacity of around 7,000MW and 30 million tons of annual coal production capacity by 2015.
Safe Harbor Statement:
Certain statements in this news release may contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, this specific supply agreement with Huaneng Yimin Coal & Electricity Co. Ltd., the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact:
Ethan Chuang
Tel: +1-714-858-1147
Email: Ethan@gulfresourcesco.com
Matthew Hayden
HC International, Inc.
Tel: +1-858-704-5065
Email: matt@haydenir.com
