China XLX Fertiliser Ltd. : Successful maiden trial run of water-soluble fertiliser production facility in Xinjiang marks another breakthrough for China XLX’s development of high-efficiency fertiliser operations

Press Release

(For immediate release)

Successful maiden trial run of water-soluble fertiliser production facility in Xinjiang marks another breakthrough for China XLX's development of high-efficiency fertiliser operations

(18 January 2013, Hong Kong) China XLX Fertiliser Ltd. ("China XLX Fertiliser" or the "Company", together with its subsidiaries known as the "Group") (HKSE: 01866.HK; SGX: B9R.SI) is pleased to announce that it has concluded a successful maiden trial run of its water-soluble fertiliser production facility in Xinjiang. The Group will push forward with its new brand strategy as a "pioneer of high-efficiency fertilisers in China" and further expand water-soluble polyaspartic-based fertiliser operations to boost its overall profitability.
The water-soluble fertiliser production facility is one part of the Group's fifth plant in Xinjiang under development. Upon full operation in March 2013, it will have annual production capacity of 150,000 tonnes and become the China's single largest water-soluble fertiliser production facility. Boasting the highest degree of automation in the industry, it will produce fertilisers with more precise formulas.
Water-soluble fertilisers are fully water-soluble multi-element compound fertilisers. They dissolve quickly in water and their nutrients can easily be absorbed by plants. Consumers of these fertilisers are located mainly in Northwest China, in particular Xinjiang. Facing water shortage problems in this region, local farmers apply water-soluble fertilisers to the soil in tandem with the use of water-saving drip irrigation system in order to truly benefit from the coupling of fertilisers and water and substantially boost the fertiliser utilization rate.
Mr. Liu Xingxu, Chairman and CEO of the Group, said, "As the biggest private fertiliser producer in China, the Group is determined to deliver superior and highly efficient fertilisers to farmers. We launched a new brand strategy at the end of last year, repositioning ourselves as 'a pioneer of high-efficiency fertilisers in China'. The successful trial run of this water-soluble fertiliser production facility not only opens the door for us to tap into the water-soluble fertiliser sector, but also enables us to cultivate a marketing network in Xinjiang for our fifth plant. This is a strategic move to reinforce our position as 'a pioneer of high-efficiency fertilisers in China'."
"The fertiliser utilization rate in China remains low. Farmers cannot fully utilize crop nutrients, and their overuse imposes environmental problems. In comparison with traditional fertilisers, water-soluble polyaspartic-based fertilisers are more effective in retaining crop nutrients and are more easily absorbed by plants. Moreover, they help avoid the overuse problems and are thus less harmful to the environment," added Mr. Liu Xingxu.

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The development of the Group's fourth plant in Xinxiang, Henan is going smoothly. Due to commence operation in the second half of 2013, it will boost the Group's annual urea production capacity from 1.25 million tonnes to more than 2 million tonnes. Meanwhile, the fifth plant in Xinjiang is scheduled to be completed by the end of 2016 and will add annual urea production capacity of
500,000 tonnes to the Group.
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About China XLX Fertiliser Ltd.

China XLX Fertiliser Ltd., one of the largest and most cost efficient coal-based urea producers in China, is mainly engaged in the production and sale of urea, compound fertiliser and methanol. Its current production capacity of urea, compound fertiliser and methanol is 1.25 million tonnes, 750,000 tonnes and
200,000 tonnes, respectively. The Group is developing its fourth urea plant in Xinxiang City, Henan Province. Upon completion in the second half of 2013, the Group's annual production capacity of urea will increase to over two million tonnes. Meanwhile, it has forged a strategic partnership with Primavera Capital, an internationally renowned private equity fund, at the end of 2011. The Group will lever its extensive experience and resources network in the capital markets to drive continuous business growth. The Company's shares are dually traded on the main boards of the Stock Exchange of Hong Kong Limited (stock code:
01866.HK) and the Singapore Stock Exchange (stock code: B9R.SI).

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