Hanwei updates wind operations



    TSX: HE

    
    - First four turbines to be installed in April 2008 -
    - Establishes relationships with domestic suppliers to address supply
      chain issues -
    

    VANCOUVER, March 31 /CNW/ - Hanwei Energy Services Corp. ("Hanwei" or the
"Company") is pleased to announce that it has completed and delivered the
first four 1.5 megawatt ("MW") turbines to Daqing Deta Electric Co. Ltd
("Deta"), which will be installed by the end user, Heilongjiang Ruihao Energy
Technology Co., Ltd. ("Ruihao"), in April 2008. The turbines will be installed
using the three blade sets manufactured by Hanwei and delivered in December
2007 and an additional blade set to be delivered by Hanwei in early April
2008. The remaining 16 turbines (24 MW) and blade sets, which are part of the
initial RMB 200 million ($29 million) order with Deta, are scheduled to be
delivered in 2008 under a revised schedule that has been mutually agreed upon
by Hanwei, Deta and Ruihao. All of the wind power equipment manufactured by
Hanwei has been produced using Chinese developed technologies licensed by Deta
and Ruihao.
    The extended schedule for the delivery of turbines is a result of
continued industry-wide supply chain issues. To that end, Hanwei has
successfully established relationships with new Chinese suppliers for key
turbine components, including gearboxes and bearings, that are to be
manufactured to the specifications of the Chinese turbine technology licensed
by Deta and Ruihao. Hanwei believes that it can source all of the required
turbine components from Chinese suppliers for 2008 deliveries. To date, Hanwei
has confirmed delivery schedules from component suppliers for approximately
135 MW of turbine components in 2008, representing more than 50% of its needs
for the 2008, and is working with its suppliers to secure additional
components for the current year. Hanwei is expecting 224 MW in orders for wind
power equipment for 2008, including 24 MW from the initial order with Deta
from 2007, and 200 MW in additional orders, subject to the acquisition of Deta
as set out below.
    The extended schedule for wind blade delivery is due to the
implementation of new manufacturing processes and the need to field test the
blade sets. Hanwei expects results from field testing to be available from
Deta and Ruihao in May 2008. To enhance its wind turbine blade production
capabilities and to accommodate the implementation of new manufacturing
processes, Hanwei has entered into a licensing agreement with Aerodyn
Energiesysteme GmbH ("Aerodyn"), a leading international wind power
engineering firm, under which Hanwei has been granted a non-exclusive right to
produce two versions of Aerodyn's aeroBlade 1.5 in China. The licensing
agreement provides Hanwei with the moulds, technical know-how, specifications
and support to produce the 37.5-metre and 40.3-metre versions of the 1.5 MW
blades and to market and sell them in China under the Hanwei brand. The
production moulds and training set out in the Aerodyn agreement is progressing
on schedule such that Hanwei expects to be able to commence production in May
2008.
    "Supply chain management is a key factor for our future success in the
wind power industry. With China's requirement that all wind equipment have 70
percent domestic content, establishing strong relationships with qualified
Chinese suppliers is vital, not only to satisfy government guidelines, but
also for the cost effective and timely execution of our wind power contracts,"
stated Mr. Fulai Lang, President and CEO of Hanwei. "The new supplier
relationships and wind blade manufacturing technology will help ensure that
the schedule for the existing wind power equipment contract can be achieved,
as well as support the significant component requirements for the pending
contract for 1,200 MW of wind power equipment over five years with Ruihao."
    In a press release dated January 24, 2008, Hanwei announced that it had
entered into a Memorandum of Understanding ("MOU") to acquire 100 percent of
Deta for RMB 600 million ($85.3 million). The MOU contemplates that Hanwei
will pay the acquisition price as to 50 percent in cash and 50 percent in
Hanwei common shares at $5.30 per share in a series of payments based on
annual wind power equipment manufacturing contracts signed between Deta and
Ruihao. Under the MOU, signed by Hanwei, Deta and Ruihao, Deta will enter into
a contract (the "Wind Power Equipment Contract") with Ruihao to provide
1,200 MW of wind power turbines, blades, towers and control systems (together
the "Wind Power Equipment") valued at approximately RMB 8.4 billion ($1.2
billion), and a right of first refusal to provide all future Wind Power
Equipment for wind farms that Ruihao owns or controls. Under the Wind Power
Equipment Contract, Deta is to be guaranteed a 15% net after tax profit. In
return, Hanwei will grant Ruihao the right to purchase, at market prices, all
additional Wind Power Equipment manufactured by Hanwei. Ruihao has also agreed
to transfer to Deta all of its current wind power equipment technology and its
rights to the land and building now being used by Hanwei to house its wind
power equipment manufacturing plant. Hanwei is working with Deta and Ruihao to
revise the MOU to satisfy Chinese and Canadian corporate, securities and tax
issues, but expects the acquisition to close, subject to completion of due
diligence and board approval, on terms comparable to those set out above.
    Hanwei will require additional working capital to support its growth
plan, including for its wind power business. Hanwei intends to augment its
cash in hand and cash from operations with new debt facilities (totaling
approximately RMB $450 million ($68 million) that have been preliminarily
arranged with a commercial bank and a related party of a customer, at
prevailing market interest rates in China.

    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.
Please visit our website at: www.hanweienergy.com.

    FORWARD LOOKING INFORMATION

    This news release contains forward-looking statements and information
that are based on the beliefs of management and reflect Hanwei's current
expectations. When used in this news release, the words "estimate", "project",
"belief", "anticipate", "intend", "expect", "plan", "predict", "may" or
"should" and the negative of these words or such variations thereon or
comparable terminology, are intended to identify forward-looking statements
and information. Such statements and information reflect the current views of
Hanwei with respect to risks and uncertainties that may cause actual results
to differ materially from those contemplated in those forward-looking
statements and information.
    There are a number of important factors that could cause Hanwei's actual
results to differ materially from those indicated or implied by
forward-looking statements and information, including Hanwei's growth strategy
may fail, Hanwei is currently dependent on the oil and gas industry and the
wind power industry for the majority of its sales, Hanwei may not be able to
develop its proposed new products and services, risks related to expanding
operations, Hanwei is dependent on a few major customers, a robust market for
wind power products in China is still in the process of developing, Hanwei's
wind power products have not been tested through actual operations, Hanwei may
not be able to meet the delivery schedule of its wind power equipment
(including wind turbines), Hanwei may not secure debt financing that is needed
for its growth plans, Hanwei faces risks with respect to supply chain
management, particularly with respect to its wind power business, changes in
technology or product requirements may affect Hanwei's ability to compete in
the wind power equipment industry, there is significant uncertainty
surrounding wind power regulation in China, Hanwei must meet Chinese
governmental localization requirements in producing its wind power products,
in connection with improvements to its wind power blade product offerings,
Hanwei may be dependent on the license granted by Aerodyn, the proposed
acquisition of Deta may not complete on the terms negotiated or may fail,
Hanwei is dependent on key personnel, Hanwei depends on its intellectual
property and the failure to protect that intellectual property may adversely
affect Hanwei's future growth and success, Hanwei currently faces and will
continue to face significant competition, Hanwei's pipe business currently
faces seasonal fluctuations in revenues, Hanwei may not have adequate
insurance for all potential claims, changes in raw material or energy costs
may adversely affect Hanwei's operating margins, Hanwei's operations are
subject to environmental risks and hazards, Hanwei faces specific risks
associated with doing business in China (including risks relating to state
ownership, government intervention, foreign investment, repatriation of profit
and currency conversion, shareholders' rights and enforcement of judgments,
developing legal system, recent Chinese regulations relating to cross-border
mergers and acquisitions, protection of intellectual property rights, permits
and business licenses, appropriation, tax, infrastructure and interest rate
fluctuations), Hanwei faces specific risks associated with doing business in
Kazakhstan, Hanwei faces risks associated with licensing FRP technology to
Concept in India, the proposed joint venture for its coal business may fail,
Hanwei is subject to exchange rate fluctuations, a significant percentage of
Hanwei's common shares are owned, in the aggregate, by its directors and
officers and Hanwei may be affected by actions of its joint venture partner.
    Hanwei cautions that the foregoing list of material factors is not
exhaustive. When relying on Hanwei's forward-looking statements and
information to make decisions, investors and others should carefully consider
the foregoing factors and other uncertainties and potential events. Hanwei has
assumed a certain progression, which may not be realized. It has also assumed
that the material factors referred to in the previous paragraph will not cause
such forward-looking statements and information to differ materially from
actual results or events. However, the list of these factors is not exhaustive
and is subject to change and there can be no assurance that such assumptions
will reflect the actual outcome of such items or factors. While Hanwei may
elect to, it does not undertake to update this information at any particular
time.
    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 July 10, 2007 filed with Canadian securities regulators, which is
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.





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,
koconnor@genoa.ca

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HANWEI ENERGY SERVICES CORP.

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