HE clean coal tech. project in China moves ahead
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Feb 20, 2009 01:37AM
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Attention Business Editors
TSX: HE VANCOUVER, Feb. 19 /CNW/ - Hanwei Energy Services Corp. ("Hanwei" or the "Company") today announced operations have commenced at the manufacturing facility of the Chinese wholly owned foreign enterprise ("WOFE") owned by Hanwei Ershigs FRP Holdings Ltd. ("Hanwei Ershigs"), its 50:50 joint venture with Ershigs Inc. ("Ershigs"). Hanwei Ershigs was established on August 1, 2008 in the province of British Columbia, Canada as a holding company which will invest a total of RMB50 million ($9.2 million) of which RMB30 million ($5.5 million) will be the registered capital in the WOFE. The WOFE will initially focus on the manufacturing and marketing of fibreglass reinforced plastic ("FRP") products used in flue gas desulphurization ("FGD") pollution control systems for coal-fired power plants in China. The manufacturing facility, located in Yanjiao, Heibei Province, China, has received environmental certification and has commenced production of FRP spray headers and related accessories for FGD systems. Hanwei Ershigs has injected an initial RMB20 million ($3.7 million) of capital into the WOFE in cash and manufacturing equipment, including a large diameter winder that is being shipped from Ershigs in the U.S. to China. The training and technology transfer process has been initiated in China and will continue in North America later this month. The WOFE has also commenced marketing of new FRP FGD products to be produced using the Ershigs large diameter winder and proprietary FRP technology, including preparations for a number of project tenders. "We are very optimistic about the growth prospects for our new WOFE as the China market now represents the single largest FGD market worldwide due to its heavy dependence on coal-fired energy generation in need of environmental upgrades," said Tom Pilcher, President of Ershigs, Inc. "We expect to leverage our industry leading position from our recent success in the U.S. where we have been awarded over 50 large scale FGD projects for the same products we will be introducing to the WOFE." "The WOFE has a winning combination of Ershigs' FRP technology and manufacturing expertise and Hanwei's China operating expertise and industry relationships," stated Fulai Lang, President and CEO of Hanwei. "The Ershigs technology provides the WOFE with a competitive advantage in China's growing market for large diameter advanced FRP solutions. The WOFE will be the only Chinese domestic manufacturer able to offer a complete FRP FGD solution, enabling us to significantly increase our average contract size." The WOFE will initially offer FRP spray headers, ducts and chimney liners targeted at FGD systems for coal-fired plants in China. Hanwei and Ershigs estimate that the total addressable market in China for FRP products for FGD systems over the next three years is more than RMB10.6 billion ($1.95 billion) and RMB6.8 billion ($1.25 billion) for the initial products of the WOFE. The China market is supported by government policy that requires that operators of coal-fired plants install sulphur dioxide scrubbers in all new plants and retrofit all large plants. After establishing production and sales infrastructure for the initial FGD products, the WOFE plans to add the full range of Ershigs' FRP FGD products to its offering for the China coal-fired pollution control market. In addition, the WOFE plans to identify other sectors in China where Ershigs' FRP technology can be used to develop a leading market share, such as tanks and pipes for petrochemical, pulp and paper, water applications. About Hanwei Energy Services Corp. Hanwei Energy Services Corp. provides high value products and services for the energy sector in China and the Asia region. Hanwei serves its major energy customers through manufacturing facilities in China, producing products for the oil, coal power and wind power industries. Hanwei is focusing on providing products and services that address the growing need for improved energy efficiency and environmental protection in China and the Asia region. www.hanweienergy.com About Ershigs Inc. Ershigs is a division of Denali Incorporated, which is the largest custom FRP design, manufacturing and specialty contractor in the U.S. Ershigs has been the leading supplier of quality FRP products and services to the U.S. electric power industry for over 40 years. Extensive experience in FRP design, fabrication, installation and construction management has enabled Ershigs to address a multitude of challenges for power market customers in diverse applications including FRP chimney liners, stacks, ducting, absorber vessels, large diameter storage tanks, abrasion resistant internal spray header piping, external recycle piping, recirculation cooling water piping and chemical feed piping in highly corrosive environments and services. Ershigs combined resources include FRP manufacturing operations in Bellingham, Washington; Sarnia, Ontario; and Grand Bay, Alabama; and a large FRP field manufacturing/construction division which is headquartered in Grand Bay, Alabama. Ershigs has recently completed and/or has under contract more than 50 large-scale FGD coal power projects in the U.S. market. << FORWARD LOOKING INFORMATION >> Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions. This forward-looking information includes information relating to status of and progress under contracts to establish production capacity and production estimates for FGD products. The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the Company will be able to effectively compete for contracts on time and on budget, and that equipment necessary to increase production capacity will be delivered when expected. The forward-looking information in this news release describes Hanwei's expectations as of the date of this news release. The results or events anticipated or predicted in such forward-looking information may differ materially from actual results or events. Material factors or risks which could cause actual results or events to differ materially from a conclusion in such forward-looking information include the risks set out in Hanwei's Annual Information Form and Management's Discussion and Analysis referred to below. When relying on Hanwei's forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Hanwei cautions that the foregoing list of material factors is not exhaustive and is subject to change. For additional information with respect to certain of these and other factors, refer to the risk factors section of Hanwei's Annual Information Form dated April 3, 2008 filed with Canadian securities regulators, and the risks discussed in Hanwei's Management's Discussion and Analysis dated November 14, 2008 for the three and nine months ended September 30, 2008, both of which are available on SEDAR at www.sedar.com. THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF HANWEI AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE HANWEI MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE SECURITIES LEGISLATION. -30-
/For further information: Kim Oishi, Senior Vice President, Finance and Business Development, Telephone: (416) 804-9228, [email protected]; Kevin O'Connor, Investor Relations, Telephone: (416) 962-3300, [email protected]/