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KHD Humboldt Wedag International Ltd. And CITIC Heavy Machinery Company Execute an Exclusive Cooperation Agreement for the Engineering and Manufacturing of Cement Plants Around the World

Posted on: Friday, 30 March 2007, 09:00 CDT

BEIJING and HONG KONG, March 30 /PRNewswire-FirstCall/ -- CITIC Heavy Machinery Company Ltd. ("CITIC HMC") and KHD Humboldt Wedag International Ltd. ("KHD") jointly announced a far-reaching exclusive cooperation agreement to jointly offer their engineering, manufacturing and sale of plant equipment and services to the global cement industry.

This agreement serves as a vehicle for both partners to efficiently implement a number of their strategic goals. CITIC HMC had a strategic focus to expand the market for their product and services outside of China. KHD had a strategic focus to gain access to both the expanding domestic Chinese cement market and low-cost manufacturing platforms for their equipment and services. The timely, effective alternatives available for implementing these strategies included either acquisition or exclusive cooperation.

Under the agreement, CITIC HMC and KHD will combine their cement businesses to better deliver their collective design and development, manufacturing service and process technologies to the global market on a best value basis. CITIC HMC and KHD believe the value of this cooperation agreement complements international market demands.

The companies have agreed to grant each other right of first refusal to jointly offer turnkey cement plant systems for new plants, capacity increases and operational enhancements and jointly develop new and enhanced equipment designs.

CITIC HMC will provide its products and services exclusively to KHD on projects outside the People's Republic of China. In return, CITIC HMC will provide, on an exclusive basis, KHD services and products on cement projects inside the People's Republic of China.

Under a manufacturing agreement, CITIC HMC will manufacture KHD products for use by KHD and KHD will grant a license to CITIC HMC for manufacturing of KHD products for use by CITIC on its projects.

Subject to availability, both KHD and CITIC HMC agree to provide each other with engineering and design support.

The agreement also covers joint research and development projects as well as the formation of jointly held operating companies.

Mr. Ren Qinxin, President of CITIC HMC, said "KHD has an established market reputation for delivery of advanced technologies and quality equipment to which CITIC HMC has contributed through our past supply agreements. CITIC HMC looks forward to the expanded application of its engineering and manufacturing capabilities to the exclusive offering of equipment and process systems to our collective customer base throughout the world. Continual enhancement of our collective equipment and system designs, coupled with the opportunity for significant cost reduction will be a winning combination for the CITIC HMC - KHD team and for our customers."

Mr. James Busche, CEO of KHD, enthusiastically commented "CITIC HMC has been a reliable manufacturer of KHD designed products for many years. Our enhanced exclusive co-operation will further increase KHD's competitive position to economically supply cement equipment and services throughout the world and now provide a marketing channel for the sale of KHD proprietary equipment within China; this is in addition to our product portfolio in non- cement markets.

"This exclusive agreement is a significant step in CITIC HMC / KHD's continuing strategic effort to truly globalize available design and supply platforms to maximize CITIC HMC / KHD's global competitive position and better serve our customers."

About CITIC Heavy Machinery Company Ltd.

CITIC Heavy Machinery Company Ltd. is a subsidiary of CITIC Group (please visit the website at http://citic.com/), the largest mining machinery manufacturer and one of the largest heavy machinery manufactures in China specializing in cement, mining, metallurgical process, nonferrous, power generation and environmental equipment. Engineering and product design capabilities are provided by its Mine Mechanical Engineering Design and Research Institute of Luoyang. To obtain further information on CITIC HMC, please visit their website at http://citichmc.com/

About KHD Humboldt Wedag International Ltd.

KHD Humboldt Wedag International Ltd (the "Company") owns companies that operate internationally in the industrial plant engineering and equipment supply industry, and specializes in the cement, coal and minerals processing industries. To obtain further information on the Company, please visit our website at http://www.khdhumboldt.com/

Disclaimer for Forward-Looking Information

This news release contains "forward-looking statements" as defined by the Private Litigation Reform Act of 1995. Statements in this press release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among others, the expectation and/or claim, as applicable, that (i) the Company will increase its sale of equipment and services in the domestic Chinese cement market, (ii) the Company will be able to lower the manufacturing costs of the equipment it sells, and (iii) the agreement with CITIC HMC will increase the Company's competitive position. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward- looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) a downturn in general economic conditions in the domestic Chinese market, (2) acceptance of the Company's products and services, including those developed and/or provided jointly with CITIC HMC, by the domestic Chinese market (3) a decreased demand for the Company's and similar products in the domestic Chinese market, and in other markets like Asia, Europe, the United States and internationally, (4) a decrease in the demand for cement, minerals and related products in China, (5) the number of competitors with competitively priced products and services, (6) product development or other initiatives by the Company's competitors, (7) shifts in industry capacity, (8) fluctuations in foreign exchange and interest rates, (9) fluctuations in availability and cost of raw materials or energy, (10) delays in the start or implementation of projects included in our forecasts, (11) disputes regarding the performance of our equipment and services, (12) the uncertainty of government regulation and politics in Asia and other markets, (13) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, and (14) other factors beyond the Company's control.

The risks and uncertainties that could affect future events or the Company's future financial performance are more fully described in the Company's quarterly reports (on Form 6-K filed in the US and on Form 51-102F1 filed in Canada), the Company's annual reports (on Form 20-F filed in the US and Canada) and the other recent filings in the US and Canada. These filings are available at http://www.sec.gov/ in the US and http://www.sedar.com/ in Canada.

Contact Information: Allen & Caron Inc. Rene Randall Joseph Allen (investors) KHD Humboldt Wedag International Ltd. 1 (212) 691-8087 1 (604) 683-8286 joe@allencaron.com randall.r@khd.de or Len Hall (media) 1 (949) 474-4300 len@allencaron.com

KHD Humboldt Wedag International Ltd.

CONTACT: Investors, Joseph Allen, 1-212-691-8087, joe@allencaron.com, orMedia, Len Hall, +1-949-474-4300, len@allencaron.com, both for KHD HumboldtWedag International Ltd.; or Rene Randall, KHD Humboldt Wedag InternationalLtd., +1-604-683-8286, randall.r@khd.de

Web site: http://www.khdhumboldt.com/

Source: PRNewswire-FirstCall

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