Gulf Resources Begins Formal Production of New Bromine and Crude Salt Assets

Published Dec 14th, 2009

NEW YORK and SHANDONG, China, Dec. 14 /PRNewswire-Asia-FirstCall/ -- Gulf Resources, Inc. (Nasdaq: GFRE) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today provided an update on the integration of manufacturing assets that the Company acquired in September 2009. The Company started formal production using the assets on December 14, 2009.

Gulf Resources completed the transfer of ownership of bromine and crude salt manufacturing assets on September 30, 2009. With support from the sellers of the assets and the local government, the Company signed a land lease agreement with local authorities and obtained the required land use rights for the property. The Company has recently finished the maintenance and modification of the assets. After having completed successful trial production, the company expects the newly acquired assets will result in a daily bromine and crude salt production of 10 and 370 metric tons, respectively.

"We were able to start timely production using the newly acquired assets because of the support of the local government, assistance from the sellers of the assets, and the efforts of the management team," said Mr. Xiaobin Liu, Chief Executive Officer of Gulf Resources. "With bromine prices higher compared with September levels, the additional production capacity will keep us well positioned for achieving our financial goals for the current fiscal year. Looking ahead at 2010, we expect China's strong economy and the government's continued efforts to regulate small, unlicensed bromine producers to help Gulf Resources meet its goal of expanding production capacity. This should allow for continued growth in our top and bottom lines."

About Gulf Resources, Inc.

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 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 about the Company, please visit http://www.gulfresourcesinc.cn .

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.