June 17, 2011

China Integrated Energy Inc, formerly known as China Bio Energy Holding Group Co Ltd, completed an investment of US$19.3 million for the construction and development of biodiesel production facility located In Tongchuan city, Shaanxi province.

Of the total project cost, US$18.3 million has been paid by the company to date, and the remaining US$1 million will be paid in the first quarter of 2011. The facility is expected to produce about 50,000 tonnes biodiesel annually.

The facility is expected to be operating at 25% to 30% capacity in the first quarter of 2011 and 50% to 60% capacity in the second quarter, ramping to 80% to 90% utilisation rate in the third quarter. For the full-year 2011, the new facility is expected to contribute approximately US$21 million in revenue and US$5.2 million in net income.

The company's advanced production technology at this facility is estimated to reduce production costs by approximately 20% and utilises an even further diverse supply of raw materials, such as crop straw, agricultural waste and organic waste, and will provide the company with better input cost controls while ensuring optimal capacity utilisation.

The facility will add about 50,000 tonnes to the company's annual biodiesel production capacity, bringing total capacity to 200,000 tonnes. The construction of the project has been completed.

Gao Xincheng, chief executive officer of China Integrated Energy, said, "Our new biodiesel facility is an integral step in our growth strategy for 2011. It brings on line an additional 50,000 tonnes of capacity to meet the growing market demand for biodiesel, supported by the government's goal to increase renewable energy consumption to 15% of China's total energy consumption by year 2020.

"This new facility, along with our plans to construct a 300,000-tonne biodiesel plant (phase one with 200,000-tonne) upon the acquisition of Hainan Lin Gao Chemical Co, will support our revenue and net income targets moving forward."