Hanfeng enters into strategic partnerships with Agrium and PetroChina

    TSX Symbol: HF

        -   Agrium to acquire 19.6% of Hanfeng

        -   PetroChina to acquire 1.6% of Hanfeng

        -   Raises $80.6 million from treasury issues

    TORONTO, April 2 /CNW/ - Hanfeng Evergreen Inc. ("Hanfeng" or the
"Company"), a leading provider of slow and controlled release fertilizers in
China, announced today that it has entered into separate agreements with
Agrium Advanced Technologies ("Agrium AT"), a business segment of Agrium Inc.,
and with PetroChina Ningxia Petrochemical Company ("PetroChina"), a division
of PetroChina Petrochemical Company, to further expand its slow and controlled
release fertilizer business in the domestic market in China and into
international markets, including North America.


    Hanfeng and Agrium AT have agreed to work cooperatively to develop and
enhance their product offerings to both companies' customers.
    Agrium AT has agreed to subscribe for 11,959,000 common shares of
Hanfeng, purchased for cash at $6.22 per share, representing an investment of
approximately $74.4 million in Hanfeng. Agrium AT's ownership will represent
approximately 19.6 percent of the outstanding shares of the Company after
giving effect to these transactions. This ownership will be approximately
equal to that of Mr. Xinduo Yu, Hanfeng's largest shareholder and CEO.
    Two nominees of Agrium AT will join Hanfeng's board of directors and
Agrium AT will be entitled to maintain board representation proportionate to
its ownership.
    If Hanfeng issues shares in the future, Agrium AT will have the right to
subscribe to maintain its proportionate interest in the Company. Each of
Agrium AT and Mr. Yu have granted the other a right of first refusal if either
wishes to sell their Hanfeng shares in any significant quantity over the next
five years. Each of Agrium AT and Mr. Yu have also agreed to a provision
preventing either of them from acquiring more than 25 percent of the
outstanding shares of Hanfeng, except pursuant to an offer for all shares.
Oakwest Corporation Limited ("Oakwest"), a company of which Robert Beutel,
Hanfeng's Chairman, is a principal which currently owns approximately
2.3 percent of Hanfeng, has also agreed to a provision not to increase its
ownership beyond 5 percent for the next two years. Each of Mr. Yu and Oakwest
have agreed not to dispose of more than 25 percent of their shares without
Agrium AT's consent, for five years in Mr. Yu's case and two years in
Oakwest's case.
    "Agrium recognizes both the enormous potential of the China market and
Hanfeng's operational and technical expertise," stated Michael Wilson, the
President and CEO of Agrium Inc. "In partnering with them, we feel that both
companies are now in a very strong position to enhance product offerings in
our respective markets."
    Agrium AT and Hanfeng have an existing exclusive licensing agreement in
place regarding production technologies for sulphur-coated urea ("SCU"). In
connection with this new alliance, that SCU agreement has been amended.
Hanfeng will establish a new wholly-owned subsidiary ("Holdco") which will
hold the rights to the SCU agreement. The purpose of Holdco will be to explore
new SCU projects and joint venture opportunities in China. Hanfeng has granted
Agrium AT an option to acquire 50 percent of Holdco. The option may be
exercised by Agrium AT at any time between six and 24 months after closing.


    Hanfeng has agreed to enter into a joint venture with PetroChina that
combines Hanfeng's technical expertise in slow and controlled fertilizers and
its proven ability to construct and profitably operate production facilities
with China's largest urea producer. Through their joint venture, the companies
intend to construct facilities that would utilize urea produced by PetroChina
and Hanfeng's proprietary technology to produce SCU.
    PetroChina will purchase 1 million common shares of Hanfeng at a price of
$6.22 per share, representing an investment of approximately $6.2 million in
Hanfeng and approximately 1.6 percent of the outstanding shares, after giving
effect to both issues.
    "Hanfeng has made significant technological advances in both the
formulation and production of slow and controlled release fertilizers and has
an established track record of successfully constructing and operating
state-of-the-art plants," stated a Senior Director for PetroChina Chemical
Products. "Their SCU technology has set the industry standard in China and we
expect significant demand for the product as it provides an efficient and
effective alternative to conventional fertilizers. In constructing plants on
our existing infrastructure, the joint venture can reduce costs and accelerate
our time to market. We look forward to growing our relationship with Hanfeng."
    Proceeds from the two share issuances will be utilized by Hanfeng to fund
additional fertilizer production facilities, to reduce debt, and to fund
expansions at the Company's Heilongjiang and Jiangsu facilities. Hanfeng is
currently in the process of completing feasibility studies.
    "Our growth to date is the result of the focused execution of a business
strategy aimed at establishing Hanfeng as an effective operator and producer,
and a leader in developing, advancing and commercializing slow and controlled
release fertilizers," said Mr. Xinduo Yu, President and CEO of Hanfeng
Evergreen Inc. "In allying ourselves with globally recognized companies like
Agrium and PetroChina, we further solidify our leading position and accelerate
our low-cost growth in the two largest fertilizer markets in the world."
    Hanfeng Evergreen Inc. will hold a conference call on Monday, April
2, 2007 at 10:30 am ET. Madeline Yu, CFO, and Robert Beutel, Chairman of the
Board, will host the call.

    Date:                    Monday, April 2, 2007
    Time:                    10:30 am ET
    Dial in Number:          1-888-280-8349 or 416-695-5261
    Taped Replay:            1-888-509-0081 or 416-695-5275
    Taped Replay Pass Code:  642593 (available until April 9, 2007)
    Live Webcast Link:

    About Agrium

    Agrium Inc. is a leading global producer and marketer of agricultural
nutrients, industrial products, and specialty fertilizers, and a major retail
supplier of agricultural products and services in both North and South
America. Agrium produces and markets three primary groups of nutrients:
nitrogen, phosphate and potash as well as controlled release fertilizers and
micronutrients. Agrium's strategy is to grow through incremental expansion of
its existing operations and acquisitions as well as the development,
commercialization and marketing of new products and international

    About PetroChina

    PetroChina Ningxia Petrochemical Company is a division of PetroChina
Petrochemical Company. PetroChina is an integrated energy and chemical company
and one of the largest companies in China in terms of sales. It is engaged in
a broad range of petroleum and natural gas related activities, including: the
exploration, development, production and sales of crude oil and natural gas;
the refining, transportation, storage and marketing of crude oil and petroleum
products; the production and sales of basic petrochemical products, derivative
chemical products and other chemical products; and the transmission of natural
gas, crude oil and refined products, and the sales of natural gas.

    About Hanfeng

    Hanfeng is a leading provider of slow and controlled release fertilizes
to blenders, the agriculture market and the urban greening market. Hanfeng was
the first to introduce the concept of slow and controlled release fertilizers
into China's agriculture market with its establishment of the first commercial
scale slow-release fertilizer production in China. All production facilities
are located in prime agricultural regions of China. The Company is
headquartered in Toronto, Ontario and its shares trade on the Toronto Stock

    This press release contains forward-looking statements based on current
expectations. These forward-looking statements entail various risks and
uncertainties that could cause actual results to differ materially from those
reflected in these forward-looking statements. Risks and uncertainties about
Hanfeng's business are more fully discussed in the Company's disclosure
materials, including its annual information form and MD&A, filed with the
securities regulatory authorities in Canada, available at www.sedar.com

For further information:

For further information: Madeline Haiying Yu, CA, Hanfeng Evergreen
Inc., Chief Financial Officer, Email: info@hanfengevergreen.com, Phone: (416)
368-8588; Kevin O'Connor, Genoa Management Ltd., Investor Relations, Email:
koconnor@genoa.ca, Phone: (416) 962-3300

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