Gulf Resources announces further temporary delay in the opening of its bromine plants
July 05 2018 - 8:30AM
Gulf Resources, Inc. (NASDAQ:GURE) ("Gulf Resources" or the
"Company"), a leading manufacturer of bromine, crude salt,
specialty chemical products, and natural gas in China, today
announced a further temporary delay in the opening of its bromine
plants situated in Shandong Province, China.
On June 29 2018, the Company received a formal notice (dated
June 25, 2018) jointly issued by various provincial government
agencies in Shandong Province (the “Notice”) forwarded by the
Weifang City Special Operations Leading Group Office of Safe
Production, Transformation and Upgrading of Chemical
Industry. In the Notice, the provincial government agencies
have set forth further requirements and procedures covering the
following four aspects for the chemical industrial enterprises
(which includes our bromine plants): project approval, planning
approval, land use rights approval and environmental protection
assessment approval. Those standards and procedures apply to
all chemical industrial enterprises in Shandong Province that have
not completed project approval procedures, planning approval
procedures, land use rights approval procedures and environmental
protection assessment procedures. The Company believes that
the government will not grant approval to open the Company’s plants
until the Company has fully complied with the aforesaid rules set
forth in the Notice.
Since bromine is considered to be a chemical, the Company
believes all of the Company’s bromine plants are subject to the
Notice and that implementation of the Notice will cause a delay in
opening the Company’s bromine plants as a result due to the now
prolonged inspection and approval process. Prior to this Notice,
the Company completed the rectification and improvement within
factory areas required by the local government agencies. The
current outstanding issues are (1) finding a solution for
co-production of bromine and crude salt at 4 of the 10 bromine
plants regarding its rectification and improvement (2) building the
new aqueduct required by government rectification and
improvement.
Among the four required approvals set forth in the notice, the
Company had already completed the safety production and
environmental protection assessment for all of its 10 bromine
plants.
The other three issues relate to all bromine plants in Shouguang
City including the Company’s all bromine plants, except plant No.1,
which already has its factory area land use certificate. While
Shouguang City agreed to the Company leasing land and approved the
establishment of our all bromine plants, it did not require nor
grant us the project approval, land use rights approval, and
planning approval that the provincial government is now requiring
pursuant to the Notice.
The Shouguang City Bromine Association, on behalf of all the
bromine plants in Shouguang, has started discussions with the local
government agencies. The local governmental agencies, realized that
the original requirements for the bromine industry that they
established were lacking in project approval, planning approval and
land use rights approval and now the requirements need improvement
according to the requirements of the provincial government. The
local government is coordinating with several government
departments to solve these three outstanding approval issues as
quickly as possible, however, the bromine plants cannot commence
production until obtain those approvals.
The Company is not certain how long the temporary delay will be
due to the discussions between Shouguang City Bromine Association
and local government agencies. The Company believes that this is
another step by the government to improve the environment. It
further believes the goal of the government is not to close all
plants, but rather to codify the regulations related to project
approval, land use, planning approval and environmental protection
assessment approval so that illegal plants are not able to open in
the future and so that plants close to population centers do not
cause serious environmental damage. In addition, the Company
believes that the Shandong provincial government wants to assure
that each of its regional and county governments has applied the
Notice in a consistent manner.
The Company does not anticipate that the Company’s new chemical
factory will be significantly impacted by the Notice. The
Company has secured from the government the land use rights for its
chemical plants located at the Bohai Marine Fine Chemical Industry
Park and presented a completed construction design draft and other
related documents to the local authorities for approval. The
Company was expecting to receive feedback from the local
authorities. However, the Company does believe there could be a
delay for the approval process given the ongoing rectification and
approvals process for the Company’s other plants.
Mr. Liu , the CEO of Gulf Resources, stated, “We are committed
to communicating effectively on a consistent basis with our
shareholders. We, obviously, have no control over the desire of the
government to implement regulations that will improve the
environment and the health of the people. However, we believe that,
working with the Bromine Association, we will be able to resolve
this issue in the relatively near future.”
About Gulf Resources, Inc. Gulf Resources, Inc.
operates through four wholly-owned subsidiaries, Shouguang City
Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical
Industry Co., Limited ("SYCI"), and Daying County Haoyuan Chemical
Company Limited (“DCHC”). 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 and gas field explorations and
papermaking chemical agents, and materials for human and animal
antibiotics. DCHC was established to further explore and develop
natural gas and brine resources (including bromine and crude salt)
in China. For more information,
visit www.gulfresourcesinc.com.
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 risk 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.
CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu (Haiyan Xu) beishengrong@vip.163.com
Gulf Resources (NASDAQ:GURE)
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