China Fire Signs $1.5 Million Contract with Shenhua Baotou Charcoal Chemical Industry Co., Ltd

BEIJING , Jan. 9 /PRNewswire-Asia-FirstCall/ -- China Fire & Security Group, Inc. (Nasdaq: CFSG) ("China Fire" or "the Company"), a leading industrial fire protection product and solution provider in China, announced today that the Company has won a contract with Shenhua Baotou Charcoal Chemical Industry Co., Ltd ("Shenhua Baotou Charcoal Chemical") for its coal-to-olefins project, valued at approximately $1.5 million.

China Fire will serve as a safety products provider for the coal-to-olefins project carried out by Shenhua Baotou Charcoal Chemical. China Fire will provide various fire detection products including the Company's patented linear heat detector, third-party safety and surveillance products, and technical and engineering support. The project is expected to be completed within two years.

Shenhua Baotou Charcoal Chemical, located in Baotou, Inner Mongolia, is a subsidiary of Shenhua Group Corporation Limited ("Shenhua Group"; 601088.SH), a leading state-owned diversified energy-based company with major businesses concentrating on coal resources and the affiliated railways, power plants, coal terminals and shipping fleets. Shenhua Group currently owns 54 coal mines with a total capacity of 200 million tons, power plants with a total installed capacity of 16,000 MW and 1,400 kilometers railways with a total transportation capacity of 128 million tons. By 2010, Shenhua's expected coal production, installed capacity of power plants, transportation capacity, port handling capacity, coal liquids and chemicals production are expected to reach 300 million tons, 30,000 MW, 200 million tons, 140 million tons and 4 million tons, respectively.

The coal-to-olefin project in Shenhua Group, launched in 2007, is a result of the need for further development and cultivation of China's energy and heavy chemical industry. China has rich coal and coal reserves that exceed 1 trillion tons. With the progress in modern coal chemical technologies, processes for the production of ethylene and propylene from coal to methanol are already well developed. As oil resources continue to become more limited on a global scale, such processes have become increasingly competitive. China Fire believes the coal-to-olefin project can help ease the issue of oil shortages, ensure energy security in China and play a critical role in the sustainable development of the coal industry in China.

The coal-to-olefin project is part of the plan to use "clean coal" technologies that convert coal to methanol to produce ethylene and propylene, the building blocks of various plastics and chemical products manufacturing. The new project, scheduled for completion in 2010, will be capable of producing a full range of linear low and high-density polyethylenes.

Mr. Brian Lin , Chief Executive Officer of China Fire commented, "We're excited to be the safety products provider for Shenhua Baotou Charcoal Chemical's coal-to-olefins project, which further demonstrates our leading position in China's fire safety industry. We believe the petrochemical industry, including coal and chemical power plants, have tremendous growth characteristics and the need for first class fire protection solutions directly benefits CFSG. Although the terms of this contract are relatively small, this is the first of a series of similar plants that are to be built by Shenhua. We believe we are well positioned to win additional projects from this key player in the chemical industry."

Mr. Gangjin Li, Executive Chairman of China Fire commented, "China, as one of the fastest growing economies in the world, is witnessing massive investment in new projects and plant upgrades in almost all segments of the petrochemical process industry. Existing products like Linear Heat Detectors (LHD) have direct applications in the petrochemical industry and we believe will benefit from the industry's impressive growth opportunities. Additionally, in an effort to serve our petrochemical clients with the best fire protection solutions, we are further strengthening our R&D capabilities to develop patented products designated for the petrochemical industry and inviting international brand names for strategic partnerships.

"This is our first contract with Shenhua Baotou Charcoal Chemical and we look forward to developing a long term relationship with this strategic player. We are pleased to be working with an increasing number of petrochemical clients and we remain confident in winning more contracts in the coming year," concluded Mr. Li

About China Fire & Security Group, Inc.

China Fire & Security Group, Inc. (NASDAQ: CFSG), through its wholly owned subsidiaries, Sureland Industrial Fire Safety Limited ("Sureland") and Tianjin Tianxiao Fire Safety Equipment ("Tianxiao"), is a leading total solution provider of industrial fire protection systems in China. Leveraging on its proprietary technologies, China Fire is engaged primarily in the design, manufacture, sales and maintenance services of a broad product portfolio including detectors, controllers, and fire extinguishers. Via its nationwide direct sales force, China Fire has built a solid client base including major companies in iron and steel, traditional power generation, petrochemical and nuclear power industries throughout China. China Fire has a seasoned management team with strong focus on standards and technologies. Currently, China Fire has 52 issued patents covering fire detection, system control and fire extinguishing technologies. Founded in 1995, China Fire is headquartered in Beijing with about 500 employees in more than 30 sales and project offices throughout China. For more information about the Company, please go to http://www.chinafiresecurity.com .

Cautionary Statement Regarding Forward-Looking Information

This presentation may contain forward-looking information about China Fire & Security Group, Inc. and its wholly owned subsidiary Sureland which are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, statements about industry trends and China Fire & Security Groups' future performance, operations and products. This and other "Risk Factors" are contained in China Fire & Security Groups' public filings with the SEC.

SOURCE China Fire & Security Group, Inc.



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