07-08-2012

Keyuan Petrochemicals second SBS production line has entered into commercial production

Keyuan Petrochemicals Inc, an independent manufacturer and supplier of various petrochemical products in China, today announced that it has completed the trial production and comprehensive tests of its second production line for Styrene-Butadiene-Styrene ("SBS") and has now commenced commercial production.

Keyuan completed construction of the new 70,000 tons SBS production facility in September 2011. After several months' of trial production that included various technique tests, the Company started commercial production with the first production line in January 2012.  As of June 30, 2012, this production line had produced 13,049 metric tons of SBS. As a result of the trial production, testing and the operational experience gained from the first line, management believes that second production line will be better adjusted and optimized for commercial production. SBS is currently selling at $3,175 per ton in China.

The Company has received positive feedback from the domestic customers about its SBS products. Meanwhile, the Company has started preparation to enter into global markets, reaching out to several potential foreign customers and sending out samples for testing. Some of the potential foreign customers have already expressed their interest in SBS products and intention to purchase as Keyuan's samples have passed their tests.

"In order to provide high quality products, we always make various adjustments and tests according to different industrial and internal standard before the approval of commercial production. The performance of our SBS production facility has surpassed our expectation, both in technique and market acceptance," said Mr. Chunfeng Tao Chairman and Chief Executive Officer of Keyuan Petrochemicals Inc. "We are confident that the full launch of SBS commercial production will bring better profit and returns to the Company and its shareholders."