Agreement Contemplates DAQUING Purchasing up to $20 Million
Worth of Products During 2008
NEW YORK and SHANDONG, China, Jan. 25 /Xinhua-PRNewswire/ -- Gulf Resources, Inc. (the "Company") (OTC Bulletin Board: GFRE) announced today that its wholly owned subsidiary company, ShouGuang City YuXin Chemical Company, Ltd. (SCHC), and DAQING Petrochemical General Manufacture have consummated a Letter of Intent representing the planned purchase of approximately 10,000 tons of oil refining chemical additives to be utilized by DaQing in its oil refining operations during 2008. The anticipated level of purchases would generate approximately $20 million in revenues for the Company during 2008.
DAQING Petrochemical Complex Office, a subsidiary of China National Petroleum Corporation (CNPC), (NYSE: PTR), is one of the largest Petrochemical Joint Enterprises in China. Furthermore, DAQING is the operator of the largest oil field in China and its main businesses include Petrochemical, Petrochemical Extended Processing, and Project Design and Project Construction. Additionally, the Company has been serving China National Petroleum Corp. by providing project planning, production, and technical support for petrochemical production and processing, as well as social services for employees. SCHC is a first-grade (premium) supplier to the Chinese oil industry having obtained a first level vender qualification from China National Petroleum Corporation and China Petroleum & Chemical Corporation (SINOPEC). SCHC has focused its development efforts on various customized products specifically to address needs of the DaQing Oil Field and is a trusted contract supplier of DaQing Oil Field and DAQING Petrochemical General Manufacture. The Letter of Intent covers a number of products that SCHC will supply, including petrochemical additives, demulsifiers, and a cetane improver for diesel fuel, with an aggregate estimated production yield of 10,000 metric tons, which if shipped during 2008 would equate to approximately $20 million in revenue.
Mr. Ming Yang, the Chief Executive Officer of Gulf Resources, Inc., commented “The consummation of this Letter of Intent between our subsidiary, YuXin Chemical Company, Ltd. and DAQING Petrochemical General Manufacture, provides further confirmation that our Company’s products have achieved acceptance by large-scale Petrochemical enterprises in China. In addition, we have successfully established Gulf Resources as a reputable brand, supported by a strong R&D team, a broad portfolio of products and core production capabilities, in addition to a growing pipeline of new products focused on large-scale oil fields both domestically and internationally. We believe these relationships demonstrate both our position in the market and our ability to significantly grow our business in 2008 and beyond. The revenues associated with this Letter of Intent were a component of our previously issued financial guidance for calendar 2008.”
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 bromine compounds used in industry and agriculture, and SYCI which manufactures and sells chemical products utilized in oil & gas field explorations and as papermaking chemical agents. For more information, please visit http://www.gulfresourcesco.com .
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. This letter of intent discussed in this release and does not represent a formal purchase agreement. The actual results may differ materially depending on a number of risk factors including, but not limited to the letter of intent with DAQING Petrochemical becoming an actual purchase agreement, the general economic and business conditions in the PRC, 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 crude salt, changes in technology, and various other factors beyond our 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.
