China's Largest Producer of Acetic Acid Returns to China Energy Recovery for Greater Energy Efficiency
Multi-million Dollar Energy Costs can be Potentially Saved Annually
SHANGHAI, China, Jan. 27 /PRNewswire-Asia/ -- China Energy Recovery, Inc. (OTC Bulletin Board: CGYV - ISIN: US16943V2060; "CER"), a leader in the waste heat energy recovery sector of the industrial energy efficiency industry, announced today that it has recently entered into an EPC (Engineering, Procurement and Construction) contract for a retrofit project (the "Project") to build a new low temperature heat recovery system (the "System") for the sulfuric acid plant of Jiangsu Sopo Chemical Group ("Sopo Group"). Sopo Group is a leading Chinese integrated chemical company and China's largest producer of Acetic Acid (Glacial), one of the major basic chemicals for industrial uses.
The Project is arranged as a sales-type lease which offers the company higher margin compared to regular EPC projects. The currently determined total contract value amounts to RMB60.8 million (roughly $8.9 million USD at the prevailing exchange rate on the date of the release) with a 4-year installment payment term. The main low temperature heat recovery system for the Project will be specially procured from MECS, Inc., a leading US-based company specializing in sulfuric acid manufacturing equipment and systems and formerly part of Monsanto. CER partners with MECS to provide the low temperature heat recovery systems for sulfuric acid plants in China.
The primary purpose of the System is to utilize the waste heat released from the sulfuric acid production process and to use it to supply the main facilities with the hot steam, which would otherwise have to be supplied from coal-fired generators. Through this process, not only are energy costs significantly reduced but Sopo Group is able to meet strict environmental protection requirements. It is estimated that upon completion in early 2010, the System will help Sopo Group save roughly 17,000 tons of coal (coal equivalent), which would otherwise be required to produce the same amount of hot steam, and thus prevent the release of approximately 45,000 tons of carbon dioxide emission each year. Moreover, approximately 200,000 tons of cooling water will also be saved annually.
"Sopo Group has been a long-time customer of CER," stated CER's CEO, Mr Qinghuan Wu. "We are happy they continue to see the benefits that waste energy recovery can provide and have returned to us to build the new project. This project is important to CER as it demonstrates our customers' recognition of CER's strong engineering capability in carrying out EPC projects for energy recovery systems. We are also pleased to continue to partner with MECS to utilize their superior technology in low temperature heat recovery for sulfuric acid plants. The Project presents a robust start of the year for CER in 2009. We shall continue to strive to provide the best value to our customers, especially in this current economic environment, because it is the corner stone of our sustained long term growth."
The number presented above is the total contract value, which includes a 17% Value Added Tax ("VAT") on the domestically purchased equipment, the retainage amount for product warranty purposes which is 5% of the total contract value and will be recognized as deferred revenue, and the interest income due to the sales-type lease arrangement. The total contract value would be increased to RMB71.2 million (roughly $10.4 million USD) if the Customs Duty and import VAT would not be exempted. The numbers presented represent values based on current exchange rates. Changes in the currency exchange rates would result in a commensurate change in contract value.
What is Waste Heat Energy Recovery?
Industrial facilities release significant amounts of excess heat into the atmosphere in the form of hot exhaust gases or high-pressure steam. Energy recovery is the process of recovering vast amounts of that wasted energy and converting it into usable heat energy or electricity, dramatically lowering energy costs. Energy recovery systems are also capable of capturing harmful pollutants that would otherwise be released into the environment. It is estimated that if energy currently wasted by all the U.S. industrial facilities could be recovered, it could produce power equivalent to 20% of U.S. electricity generation capacity without burning any additional fossil fuel, and could help many industries to meet stringent environmental regulations.
About China Energy Recovery, Inc.
CER is an international leader in designing, manufacturing and installing waste heat energy recovery systems which provide facilities with greater energy efficiency. The company's primary focus is on the Chinese market. CER's technology captures industrial waste energy to produce low-cost electrical power, enabling industrial manufacturers to reduce their energy costs, shrink their emissions footprint, and generate sellable emissions credits. CER has deployed its systems throughout China and in such international markets as Egypt, Korea, Vietnam and Malaysia. CER focuses on numerous industries in which a rapid payback on invested capital is achieved by its customers, including: chemical, paper manufacturing, refining (including methanol refining), etc. CER continues to invest in R&D and plans to build China's first state-of-the-art energy recovery system research and fabrication facility to allow it to meet the increased demand for its products and services. For more information on CER, please visit: http://www.chinaenergyrecovery.com/s/Home.asp . Information on CER's website does not comprise a part of this press release.
Forward-Looking Statement Disclaimer
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, as amended. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that CER believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors that CER believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of CER and may not materialize, including, without limitation, the efficacy and market acceptance of CER's products and services, and CER's ability to successfully complete orders and collect revenues therefrom. Investors are cautioned that any such statements are not guarantees of future performance. Actual results or developments may differ materially from those projected in the forward-looking statements as a result of many factors. Furthermore, CER does not intend (and is not obligated) to update publicly any forward-looking statements, except as required by law. The contents of this release should be considered in conjunction with the warnings and cautionary statements contained in CER's filings with the SEC, including CER's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2008.
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Sean Mahoney
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