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Euro Tech Holdings Company Limited Reports Letter of Intent Signed to Form Manufacturing Joint Venture in China

Posted on: Friday, 14 July 2006, 06:00 CDT

HONG KONG, July 14 /Xinhua-PRNewswire-FirstCall/ -- Euro Tech Holdings Company Limited today announced that its majority owned subsidiary, PACT Asia Pacific Ltd. ("PACT") has entered into a letter of intent with Wuxi TONTAN Environmental Engineering Co., Ltd. ("TONT") in China, and PACT Engineering FZC ("PACTFZC"), a Middle Eastern water treatment company based in Dubai, to form a manufacturing joint venture ("JV") in China, whereby PACT will invest US$425,000 and have a 51% controlling interest of the joint venture, the shareholding of the other parties is 30% by TONT and 19% by PACTFZC.

TONT, which has been the main fabricator for PACT during the past 7 years, has been actively operating since 1999 for water and wastewater treatment equipment for local and multinational clients in China. TONT manufactures both standard equipment as well as custom built equipment used in the water and wastewater treatment industry. Some of TONT's products are: mechanical screens; clarifier scrapers; polymer feeders; decanters; dissolved air flotation units; belt and screw conveyors; package water treatment units; reverse osmosis skids; and water tanks.

PACTFZC through its expanding offices in the Middle East, North Africa and the EX Soviet Republics is expected to make some contribution to the sales volume of the JV.

The JV will operate from the existing facilities of TONT in Wuxi which consists of about 5,000 square meter covered fabrication area, office and storage facilities. The facilities are complete with a range of machinery used for mild steel and stainless steel prepping, cutting, welding, testing and painting.

Subject to the local government approval, the JV will be registered and formed in the 4th quarter of 2006. The JV will definitely have a positive effect on PACT for better control on quality and delivery of products.

Certain statements in this news release regarding the Company's expectations, estimates, present view of circumstances or events, and statements containing words such as estimates, anticipates, intends, or expects, or words of similar import, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements indicate uncertainty and the Company can give no assurance with regard to actual outcomes. Specific risk factors may include, without limitation, having the Company's offices and operations situated in Hong Kong and China, doing business in China, competing with Chinese manufactured products, competing with the Company's own suppliers, dependence on vendors, and lack of long term written agreements with suppliers and customers, development of new products, entering new markets, possible downturns in business conditions, increased competition, loss of significant customers, availability of qualified personnel, negotiating definitive agreements, new marketing efforts and the timely development of resources. See the "Risk Factor" discussions in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F for its fiscal year ended December 31, 2005.

CONTACT: Euro Tech Holdings Company Limited, Hong Kong T.C. Leung, Chairman and CEO, or Jerry Wong, CFO Tel: +852-2814-0311 Fax: +852-2873-4887 Website: http://www.euro-tech.com/ Pact's website: http://www.pactchina.com/

Euro Tech Holdings Company Limited

CONTACT: T.C. Leung, or Jerry Wong, both of Euro Tech Holdings CompanyLimited, +852-2814-0311, or fax, +852-2873-4887

Web site: http://www.euro-tech.com/http://www.pactchina.com/

Source: PRNewswire

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