China Chemical Holding Co., Ltd.

On October 18, the signing ceremony for the cooperation agreement on assets reorganization between China National Chemical Industry Group and Chenzhou Dahua Group was held in Dahua, Cangzhou. China National Chemical Corporation will increase its capital by 417 million yuan to control 51% of the equity of Chuzhou Dahua Group.

Cangzhou Dahua Group was formerly known as Zhuozhou Chemical Fertilizer Plant in Hebei Province. It was established in 1974 and is a large pillar enterprise group in Hebei Province.

China National Chemical Industry Group is a state-owned large-scale enterprise established on the basis of the former Ministry of Chemical Industry approved by the State Council. The company's business involves oil refining, chemicals, mining, chemical cleaning, chemical research, and catering, and is an internationally competitive enterprise group.

Prior to the signing of the agreement, the two sides jointly hired an intermediary agency accredited by the State-owned Assets Supervision and Administration Commission of the State Council. Based on the net assets of Chenzhou Dahua Group on December 31, 2005, the Group conducted an inventory verification and verification, a financial audit and an assets assessment, and confirmed the Dahua Group's net book value.

After the signing of the agreement, China National Chemical Corporation will invest 417 million yuan in three phases in cash, and will hold 51% of the equity in Chuzhou Dahua Group, and participate in the decision-making and production, operation and management of Cangzhou Dahua Group. According to the "Strategic Cooperation Framework Agreement" signed, China National Chemical Industry Group will invest 7.2 billion yuan in 2011 to build a chemical industrial base including projects such as TDI, melamine, MDT, and so on in Ganzhou, based on Ganzhou Dahua.

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