New York & Shandong Province, March 6 2009  - Gulf Resources, Inc. (OTCBB: GFRE) (“Gulf Resources” or the “Company”), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced that the Company’s wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”) on March 3, 2009 signed an agreement with Kuerle City Xingdong Trading Co., Ltd. (“Xingdong”), a distributor of additive materials for oilfields in Xinjiang autonomous region, to deliver environmentally friendly chemical products valued at approximately $7.5 million.

 

According to the purchase order, Gulf Resources will deliver 2,500 metric tons of environmentally friendly polyether lubricant, and 1,500 tons of environmentally friendly solid lubricant from March 2009 to December 2009.

 

In September 2008, Gulf Resources, through SYCI, began formal production at its new chemical production line with 5,000 metric tones of annual capacity of environmentally friendly additive products, including solid lubricant and polyether lubricant, for use in oil and gas exploration.  That same month, SYCI received an initial three-month purchase order from Xingdong to deliver 800 metric tons of its environmentally friendly oil and gas exploration additive products worth a total of $1.6 million. The Company’s environmentally friendly oil and gas exploration chemical products generated a gross profit margin of approximately 42% in 2008.

 

“The feedback from end customers regarding the quality and performance of the first round of chemical products sold through Xindong was excellent, resulting in these follow-up orders,” commented Ming Yang, Chief Executive Officer of Gulf Resources, “We expect to see solid growth in sales of our environmentally friendly chemicals products this year due to increasing oil and gas exploration activities in the Xinjiang autonomous region, the primary region for oil and gas exploration in China. By actively developing and expanding our high-end, higher margin chemical business parallel to our bromine and crude salt business, we are optimistic about maintaining our overall gross profit margin even though bromine prices may remain volatile in the first half of 2009.”

 

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited (“SCHC”) and Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”). The Company believes that it is one of the largest producers of bromine in the People’s Republic of China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil & gas field explorations and as papermaking chemical agents. For more information, please visit www.gulfresourcesinc.cn.

 

 

 

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