Signs $2.9 million sales/licensing agreement
VANCOUVER, Dec. 17 /CNW/ - Hanwei Energy Services Corp. ("Hanwei") is
pleased to announce it has entered into a licensing agreement (the
"Agreement") with Concept Management Consulting Private Limited ("Concept") to
provide high-pressure FRP (fibreglass reinforced plastic) pipe production
equipment and technology for India. Per the terms of the Agreement, Hanwei
will receive a one-time licensing fee of Cdn. $2.9 million in exchange for
equipment and certain technology specific to the annual production of 400
kilometres of high-pressure FRP pipe and a 10-year exclusive right to produce
and sell the product in India. Delivery of the equipment is scheduled for the
second quarter of 2008.
The Agreement allows Concept the use of all Hanwei's patents and
trademarks for 2"-8" FRP pipe only and can be extended for an additional 5
years upon mutual consent of the parties. Concept is bound by the Agreement to
protect all of Hanwei's proprietary processes and is prohibited from exporting
any FRP products or technology without consent from Hanwei. In the event that
demand exceeds 400 kilometres per year, Hanwei will sell Concept FRP pipe at
prices to be agreed upon, or will license additional production equipment for
additional license fees, subject to negotiation.
"Hanwei is one of only two companies producing high pressure FRP pipe for
oil gathering in Asia and demand for our product is growing rapidly," stated
Fulai Lang, President and CEO of Hanwei. "India is a large, under served
market and the license agreement provides a low-risk opportunity to introduce
our FRP pipe through an established company with strong strategic
relationships throughout the industry."
With a population of more than 1 billion, India is emerging as one of the
world's largest consumers of energy, with domestic demand set to triple by
2020. The country currently ranks sixth in the world in terms of petroleum
demand and by 2010 is projected to replace South Korea and emerge as the
fourth-largest consumer of energy, after the United States, China and Japan.
Approximately 40 percent of India's power production is fueled by oil and gas.
As a net importer of oil (production of 807,000 barrels per day versus
consumption of 2.575 million barrels per day), India is undertaking numerous
initiatives to intensify the exploration and development of its significant
oil reserves, as well as the redevelopment of its existing fields in order to
improve recovery factors.
Hanwei has successfully established itself as a leader in the production
of FRP products in China and has been aggressively pursuing opportunities to
expand into other Asian markets. In addition to the license agreement in
India, Hanwei expects to begin operations in Kazakhstan in 2008, supported by
its marketing partner China Petroleum Technology and Development Corporation,
a subsidiary of China National Petroleum Corporation. (See Hanwei press
releases dated August 2 and August 14, 2007)
About Concept Management Consulting Private Limited
Concept was created in 1997 and caters to the strategic and
entrepreneurial consulting requirements of various Indian and foreign
businesses as well as meeting the needs of overseas businesses seeking
assistance in entering the Indian Market and in establishing and managing
businesses in India. Concept clients range in annual sales from Rs. 30 crores
(US$7 million) to Rs. 2000 crores (US$450 million) and span a diverse range of
businesses including advertising, construction, infrastructure, plastics,
polyester fibre, metal, real estate development, seed, steel, sugar and toll
operations. The client list is equally diverse in the range of ownership from
private family owned Indian companies to stock exchange listed and government
owned companies, both Indian and foreign.
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.
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 with respect to Hanwei's graduation from the TSX Venture Exchange
to the Toronto Stock Exchange, Hanwei's increased exposure to investors and
analysts in both the national and global capital, and Hanwei's efforts to
expand its international customer base and attract global business partners.
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 which could cause
actual results or events to differ materially from a conclusion in such
forward-looking information include Hanwei's inability to fulfill the TSX
requirements for listing. 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 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. HOWEVER, HANWEI
EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION,
FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.
For further information:
For further information: Kim Oishi, Senior Vice President, Finance and
Business Development, Telephone: (416) 804-9228, email@example.com;
Kevin O'Connor, Investor Relations, Telephone: (416) 962-3300,