Haike Chemical Group Regulatory News (HAIK)

HaiKe Chemical Group Ltd

Commencement of operations at Ruilin refinery facility

HaiKe Chemical Group Ltd ("HaiKe" or the "Company"), the AIM quoted (AIM: HAIK) petrochemical, speciality chemical and biochemical business based in China, is pleased to announce that Dongying Hi-Tech Ruilin Chemical Ltd.,("Ruilin"), its new joint venture refinery facility, has been successfully completed on schedule and is now fully operational.

Ruilin will produce and sell gasoline, diesel oil, liquefied gas, asphalt and heavy oil domestically, where the demand for these products currently outweighs supply. Located three miles from Dongying Port, an important economic hub, the facility has easy access to cheapand efficienttransportation for its feedstock and finished products. Ruilin has an annual production capacity of 2.7 million metric tonnes which brings HaiKe's total refinery capacity to 4.5 million metric tonnes per annum.

Ruilin is a joint venture with Xindu GroupCompany Ltd., an investment company focused on the oil and gas sector, and Jindayuan Real Estate Company Ltd., an oil and gas infrastructure developer. HaiKe has a 49% stake in the joint venture and the remaining 51% is held between the two joint venture partners.

In total approximately RMB 900m has been invested to date by the joint venture partners, of which HaiKe has contributed 49%. This includes the RMB400m initial investment. Approximately RMB160m has been spent on construction of the facility, RMB570m on plant and equipment, with the remainder comprising pre-operating expenses and working capital. A further RMB100m will be contributed once the facility has passed quality assurance checks. HaiKe's approximate RMB 490m total contribution has and will be financed by the Company's cash and debt facilities.

HaiKe's principal goal from the joint venture is to increase the production and sale of its petrochemical products.

Mr. Yang Xiaohong, Executive Chairman, said:

"Our core objective is to grow our petrochemical business and take advantage of the demand for our products in China. The successful construction of Ruilin on schedule and within budget, will increase our production capacity and significantly strengthens our refinery business and position in the local market."

Notes to Editors

HaiKe Chemical Group

HaiKe Chemical Group Ltd is a petrochemical, speciality chemical and biochemical business based in Shandong province, China. The Group's principal products are diesel and other oil-related products produced through oil refining operations, as well as speciality chemical and biochemical products. The Company currently has an annual oil refining capacity of 1.8 million tonnes and a speciality chemicals and bio-chemicals production capacity of 545 thousand tonnes. HaiKe was admitted to AIM, a market operated by the London Stock Exchange, on 14 February 2007. www.haikechemical.com

Xindu Group

Xindu Group is a holding company focused on financial investments of oil and gas related activities in China. The Group specialises in the investment of petroleum technological development, petroleum and gas engineering and urban gas pipelines.

Jindayuan

Jindayuan is a China based infrastructure developer specialising in infrastructure construction of urban gas and natural gas pipelines and facilities management.