Lumena Announces Annual Results 2010

Mr. Zhang Zhi Gang appointed as Chairman and Executive Director of Lumena

Revenue and Net Profit Surged by 45.9% and 33.8% respectively to RMB1,961.2 million and 729.3 million

HONG KONG, April 1, 2011 /PRNewswire-Asia/ --

Financial Highlights

China Lumena New Materials Corp. ("Lumena" or the "Company", HKEx Stock Code: 67), one of the largest thenardite producers* and the world's largest PPS resin producer**, announced its annual results for the 12 months ended 31 December 2010 (the "year under review").

For the year ended 31 December 2010, the Company's revenue increased to approximately RMB1,961.2 million (2009: RMB1,344.0 million), representing an increase of approximately 45.9% as compared to the previous year. The increase in revenue was attributable to the commencement of commercial operation of its new medical thenardite production facility and the new animal feed specialty thenardite production facility.  During the period under review, the Company recorded a gross profit of RMB1,419.7 million (2009: RMB979.6 million), representing an increase of approximately 44.9% as compared to the previous year. The overall gross profit margin was 72.4% (2009: 72.9%). Profit for the year attributable to owners of the Company increased by 36.8% to RMB729.3 million (2009: RMB544.9 million). .

For the 12 months ended 31 December 2010, revenue contributed by specialty, medical and powder thenardite were RMB1,040.7 million, RMB790.4 million and RMB130.1 million respectively, accounted for approximately 53.1%, 40.3% and 6.6% of the overall revenue respectively in 2010. Revenue contributed by medical thenardite rose significantly from 25% of total revenue in 2009 to 40.3% of total revenue in 2010.

The Company enjoys strong brand and product recognition among downstream industries in China. The brand "Chuanmei" has been successively recognized as a "Sichuan Famous Brand Product" since 1993 and the registered trademark "Chuanmei" was recognized as a "China Well-known Trademark" by the State Administration for Industry and Commerce of the PRC in March 2008. In 2010, the Company was also honoured as an "Outstanding Quality Control Enterprise", an "Outstanding Safety Production Enterprise" and an "Advanced Enterprise with Excellent Performance in Quality Control", and passed the reassessment of the "Environmental Management System" and the "ISO9001: 2008 Quality Control System".

Mr. Zhang Daming, Executive Director and CEO of Lumena, said, "The thenardite market has been volatile in 2009 as with all non-ferrous commodities in China, but in 2010 we have witnessed gradual restoration of stability in the market. In addition, the niche high-end segment of the market such as medical and specialty thenardite, has proved to be robust and unaffected by the volatilities in the commodities market. Domestic sales of thenardite kept increasing in the same pace with the PRC economy in 2010. We have further developed high-end thenardite products with higher profit margin, thereby achieving a satisfactory growth in our overall operating results in 2010."

As of 31 December 2010, other than three captive underground glauberite mines in Dahongshan Mining Area, Guangji Mining Area and Muma Mining Area, the Company has successfully acquired the mining right over Yuegou Mining Area in Meishan city. The Company upgraded its original facilities to produce the specialty thenardite that could be used as an animal feed additive, and obtained the "Feed Additive Manufacturing Licence" issued by the Department of Agriculture of the People's Republic of China. The new production facility commenced commercial operation in September 2010 with an annual production capacity of 300,000 tonnes. Capacity expansion will further consolidate the Company's efforts in the business development of thenardite products.

The introduction of downstream thenardite product is another key for the Company's success. It also endeavoured to expand the clinical application of medical thenardite in 2010. Currently, the Group has completed the preparatory work for the production and sales of thenardite medicines. It is expected that the thenardite medicines will be formally launched to the market in April 2011. Vertical expansion of thenardite business will further strengthen the competitiveness of Lumena.

On 7 November 2010, the Company announced the acquisition of Sino Polymer New Materials Co., Ltd. ("Sino Polymer"), with an aim to expand the Company's product portfolio to downstream thenardite products. Sino Polymer is the largest producer of polyphenylene sulfide ("PPS") resin in the world. PPS is widely used in the fields of electric appliances, electronic devices, automotive, transportation, environmental protection and dedusting, aerospace and coating etc. It has been listed in the catalogue of new materials that priority has been given by the State for focused cultivation and development in the Twelfth Five-year Plan. The acquisition has been completed on 14 January 2011. With growing emphasis given to the development of high-end high-performance specialty chemicals, the Company considered the acquisition an important step toward this direction, which signifies that the Group has implemented its strategic initiatives to expand downstream thenardite products.　In respect of the research and development, the Company has submitted two patent applications for the Group's refined sodium sulphide which are applicable to the production of high-end PPS products. It is also developing natrii sulfas exsiccatus, another clinical product of medical thenardite, to widen the application of thenardite and boost its demand.

Meanwhile, the board of the company will make appropriate internal adjustments to ensure the persistent outstanding performance of the company after its expansion.  The Company announces restructuring of the Board after acquisition of Sino Polymer, at the same time increasing the presence of senior operational professionals to the Board. Amongst other Board changes, Mr. Suo Lang Duo Ji resigned as Chairman and Non-executive Director. Mr. Zhang Zhi Gang, CEO and Executive Director of Sino Polymer, is appointed as Chairman and Executive Director of the Company. Such change in board members will bring in a more professional and experienced management team, which will assure shareholders of much fruitful returns after expansion..

Mr. Zhang Zhi Gang, the newly appointed Chairman and Executive Director said, "Looking ahead, following the completion of the acquisition of Sino Polymer in January 2011, the Group has become one of the world's leading manufacturers of high-end special new materials. We will intensify our efforts in the R&D and promotion of high-end products to increase our profitability. We will put more efforts in the R&D of PPS and develop more applications for PPS products. We will constantly develop more PPS products, with an attempt to further strengthen the leading position of the Group in PPS industry and to maintain our core competitiveness. The change in board members marks a new milestone of the Company. As the new Chairman and Executive Director of the Company, I committed that, together with the management team, we will pay more attention on our business growth and I will make use of my extensive industry experience to lead Lumena to reach new high."

About China Lumena New Materials Corp.

Lumena focuses its operations on the mining, processing and manufacturing of natural thenardite products, and is one of the largest thenardite producers in the world in terms of production capacity as of 31 December 2010*. Equipped with the world's largest single line production facility, the Company produces high quality thenardite products, including powder thenardite, specialty thenardite and medical thenardite. Lumena operates four captive underground glauberite mines in Dahongshan Mining Area, Guangji Mining Area, Muma Mining Area and Yuegou Mining Area in Sichuan Province. Its reserves are higher than the average grade in China, according to JT Boyd***. In January 2011, Lumena successfully acquired the world's largest PPS resin producer, Sino Polymer New Materials Co., Ltd., expanding downstream business to production, development and sales of PPS resin, PPS compounds and PPS fibre.

* In terms of production capacity as of December 31, 2010, according to Behre Dolbear, an independent market research consultant

** In terms of production capacity as of December 31, 2009, according to SRI Consulting, an independent research service firm

*** John T. Boyd Company, a mining consultant firm

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