Qifeng Invests RMB550 Million in Total to Construct China's Largest Carbon Fiber Precursor Production Facilities with Annual Capacity of 5000 Tons Commence Production

Meeting robust demand in domestic downstream market with products of good functionality and quality and tapping global market

HONG KONG, Nov. 18, 2011 /PRNewswire-Asia/ -- Jilin Qifeng Chemical Fiber Co., Ltd., ("Qifeng Chemical Fiber" or the "Company" and, together with its subsidiaries, the "Group", HKEx Stock Code: 549), a world-known PAN-based fiber manufacturer, today announced that its carbon fiber precursor production base with an annual capacity of 5,000 tons commence production, with a ceremony taking place at Jilin Tangu Carbon Fiber Co., Ltd..

Qifeng Chemical Fiber set up a wholly-owned subsidiary Jilin Tangu Carbon Fiber Co., Ltd., in December 2008 and invested approximately RMB550 million with advanced imported facilities for developing the project of PAN-based fiber production base with an annual capacity of 5,000 tons. The project includes four production lines, of which one produces T300 grade of 1K and 3K carbon fiber precursor with an annual capacity of 500 tons and the remaining three produce T300 grade of 12K carbon fiber precursor with an annual capacity of 1,500 tons at a low cost. In April 2009, the project was named by government of Jilin Province as a "Major science and technology project under Jilin's technological innovation development plans for large-scale industrial enterprises from 2009 to 2012". Supported and high regarded by the government, the trial run of Qifeng Chemical Fiber's 5,000-ton PAN-based fiber production line was completed in September 2011 after two years of preparation, installation and construction. The plant has commenced production today.

Speaking of the project, Mr. Wang Jinjun, chairman of Qifeng Chemical Fiber, said, "Leveraging on our products of good functionality and quality, together with the supply and demand between the carbon fiber precursor industry and the downstream market, we aim to tap the global market based on our solid domestic carbon fiber precursor market. We currently collaborate with Iran, Russia and South Korea and will step up efforts to secure carbon fiber precursor buyers from Greece. We believe we can capitalize on opportunities to strengthen our leading position in China's acrylic industry and further the development of carbon fiber."

Carbon fiber is a new type of high-performance fiber material characterized by high strength and used extensively for military, industrial and civil purposes. While other carbon fiber precursor manufacturers in China adopt a one-step approach, Qifeng Chemical Fiber uses an advanced wet processed methylacetamine two-step spinning technology for its production and has obtained proprietary intellectual property rights for its innovative technology with two patents for the preparation method of polymer for PAN-based carbon fiber precursor and the preparation method of PAN-based carbon fiber precursor.

Looking ahead, Mr. Wang continued, "As China's economy and the textile industry continue to grow with carbonization plants completed or expanded, the demand for carbon fiber precursor is expected to go up. We plan to increase our production capacity by 15,000 tons on top of the 5,000-ton scale. At the end of the 12th Five-year Plan period, the annual production capacity of carbon fiber precursor is expected to reach 20,000 tons. As such, we look forward to future achievements as a result of our relentless efforts in the carbon fiber industry."

About Jilin Qifeng Chemical Fiber Co., Ltd.

Qifeng Chemical Fiber is a world-known PAN-based fiber manufacturer with a production base at Songhua River, Jilin city, Jilin province. Qifeng Chemical Fiber, the Hong Kong-listed unit of Jilin Chemical Fiber Group Co., Ltd., is principally engaged in the production of acrylic fiber with an annual capacity of 140,000 tons, a consolidated capacity of 240,000 tons and an annual production capacity of 5,000 tons for carbon fiber precursor. Qifeng Chemical Fiber offers more than 170 kinds of products including acrylic top, acrylic tow and acrylic staple fiber and carbon fiber precursor, of which over 40 kinds are sold to the global market.

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