Hanwei subsidiary Harvest secures credit facility to fund FRP pipe production expansion



    TSX: HE

    VANCOUVER, July 7 /CNW/ - Hanwei Energy Services Corp. ("Hanwei" or the
"Company") announced today that its subsidiary, Daqing Harvest Longwall High
Pressure FRP Pipe Co. Ltd. ("Harvest"), has secured a credit facility from
China Construction Bank for up to RMB100 million or approximately $15 million.
The term of the facility is one year and carries an effective annual interest
rate of 8.62%. The credit facility is secured by Harvest's account
receivables.
    The funds available from the facility will be used to expand annual FRP
(fibreglass reinforced plastic) pipe production capacity at Hanwei's Daqing
facility from the current 3,200 km to 4,600 km. The expansion will include a
total of up to eight new lines, as well as facilities to develop larger
diameter high pressure FRP pipe to be used in a wider scope of potential
applications including down hole oil field casing, petrochemical plants, and
fire protection systems. The estimated budget for the additional lines,
building, and facilities is RMB35 million (or approximately $5.2 million) with
completion and commissioning expected in the third quarter of 2008.
    The increased production capacity is being added to satisfy growing
demand for Hanwei's FRP products in China and Kazakhstan. The Company
currently has over RMB170 million (or approximately $25 million) of confirmed
pipe sales orders.
    "Demand for our FRP pipe continues to outpace our production capacity,"
stated Fulai Lang, President and CEO of Hanwei. "With the funding in place for
our expansion in Daqing and a very strong order book, we expect to meet or
potentially exceed our 70% annual sales growth target for our FRP pipe
business."
    Harvest is 91% owned by Hanwei. The remaining 9% is owned by Daqing
Changyuan Investment Co. Ltd., an indirect subsidiary of China National
Petroleum Corp., a Chinese state-owned entity and the parent company of
PetroChina Co., Ltd., a major Chinese oil and gas company listed on the New
York Stock Exchange (NYSE:   PTR).

    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

    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 the use of the funds available from the credit
facility, the demand for Hanwei's FRP pipe products in China and Kazakhstan,
Hanwei's annual sales growth target for its FRP pipe business, Hanwei's FRP
pipe production capacity, the expansion of FRP pipe production capacity at
Hanwei's Daqing facility, and the expansion of Hanwei's product line to
include production capacity for large diameter (24") FRP pipe. 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 that Hanwei may not be able
to complete the credit facility from China Construction Bank, the demand for
Hanwei's FRP pipe may not continue to outpace its production capacity,
Hanwei's annual sales growth for its FRP pipe business may not continue,
Hanwei may not be able to expand its FRP pipe production capacity at its
Daqing facility, Hanwei may not be able to expand its product line to include
production capacity for large diameter FRP pipe, Hanwei may not be able to
obtain any required approvals to expand its production capacity or product
line such approvals may be subject to conditions that are unacceptable, Hanwei
may not be able to effectively manage the expansion of its operations, Hanwei
may not be able to negotiate favourable pricing terms for additional supplies,
supply chain issues or changes in technology or product requirements may cause
delays in the delivery of products, Hanwei depends on its intellectual
property and the failure to protect that property may adversely affect future
growth, Hanwei faces significant competition and seasonal fluctuations in
revenues, there may be insufficient insurance for its operations, changes in
costs of raw materials or energy may adversely affect operating margins,
profit margins may be impacted by price inflation, operations are subject to
environmental risks and hazards, exchange rates fluctuate, and there are
specific risks associated with doing business in China (including those
related to state ownership, government intervention, foreign investment,
repatriation of profit, currency conversion, shareholders' rights and
enforcement of judgments, a developing legal system, recent regulations
relating to cross-border mergers and acquisitions, protection of intellectual
property, permits and business licenses, appropriation, tax, infrastructure
and interest rate fluctuations). 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, which is available on SEDAR at www.sedar.com.
    Hanwei has included in this news release figures based on orders
received, which is a non-GAAP measure. Readers are cautioned that orders
received is not a recognized measure under Canadian GAAP and should not be
construed to be an indicator of performance or liquidity or cash flows.
Hanwei's method of calculating this measure may differ from the method used by
other entities and accordingly Hanwei's measure may not be comparable to those
used by other entities. Hanwei uses these figures because management has a
high degree of confidence that the orders received will represent sales and it
believes such figures provide a useful indication of Hanwei's progress.

    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.





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

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HANWEI ENERGY SERVICES CORP.

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