Hanwei and Ershigs move forward on China joint venture



    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.





For further information:

For further information: Kim Oishi, Senior Vice President, Finance and
Business Development, Telephone: (416) 804-9228, koishi@hanweienergy.com;
Kevin O'Connor, Investor Relations, Telephone: (416) 962-3300,
ko@spinnakercmi.com

Organization Profile

HANWEI ENERGY SERVICES CORP.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890