A new production facility for China Valves Technology, Inc. is slated to begin formal production by mid-September 2009. The facility covers over 13,000 square meters and is equipped with state-of-the-art, fully automated machines. The construction was completed in the first quarter of 2009.

At Kaifeng Valve, production will mainly focus on high-end large diameter metal valves used in thermal and nuclear power plants, as well as by the oil petrochemical and water supply and drainage industries. The new facility will produce high-quality forged steel valves for use in supercritical thermal power generating units. China Valves Technology believes itself to be the only China-based company capable of manufacturing this advanced product. The new facility will also produce conventional islands valves of nuclear power stations.

Mr. Siping Fang, Chairman and Chief Executive Officer of China Valves, commented, “Our new facility will focus on production of high-end valve products, and we plan to quickly ramp up production to reach 100% utilization by the end of 2009. Based on feedback from end valve users in the power generation and oil and petrochemical industries, demand for large diameter valves and forged steel valves will remain strong due to the shortage of production capacity for valve products used in more critical applications, such as supercritical thermal power generating units. This conscious and ongoing shift in our product portfolio towards technologically advanced valves should significantly improve our competitive position in the high-end valve market in China.”

Mr. Fang added, “We expect the new facility to contribute $9.8 million in revenue and $3 million in net income in 2009. On a full year basis when at full capacity and accounting for seasonality we expect the new facility will contribute approximately $29.4 million in revenue and approximately $9 million in net income. These estimates assume that the facility’s product mix remains in line with current backlog. However, annualized revenue and net margin may change as our product offerings evolve.”