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ShengdaTech Breaks Ground at New NPCC Facility in Zibo

October 27, 2008

Increases Total Designed Capacity to 160,000 MT from 120,000 MT

TAIAN CITY, China, Oct. 27 /Xinhua-PRNewswire-FirstCall/ — ShengdaTech, Inc. (“ShengdaTech” or “the Company”) a leading manufacturer of nano precipitated calcium carbonate (NPCC) in the People’s Republic of China (PRC) and a major manufacturer of coal-based chemical products in Tai’an City, Shandong Province, PRC, today announced that the Company has broken ground on its new NPCC facility in Zibo and has begun construction.

The Zibo facility will have a total designed capacity of 160,000 metric tons (MT), instead of 120,000 MT as previously announced. The Company determined that greater economy of scale can be realized through this revised plan. In addition to the facility being built, the 58 acres of land in which the Company has invested allows for additional capacity expansion in the future. The first phase will have total capacity of 60,000 metric tons (“MT”) and is expected to begin production in July 2009. The Company previously announced plans to expand the facility further with the second phase of 60,000 MT to meet increasing market demand by the end of 2009; however, in light of the worldwide economic slow-down, the Company will reassess the demand/supply situation as the start date for the second phase of expansion approaches.

“We are happy to report that we have begun construction of our new NPCC facility in Zibo. We have received favorable tax incentives from the local government for the expansion of our production of NPCC, which is recognized as a high technology and desirable form of industrial development in the region,” Mr. Xiangzhi Chen, President and CEO of ShengdaTech, commented. “We continue to experience very robust demand for NPCC from both our established markets, such as the tire industry, and from the new applications that ShengdaTech has pioneered. Our NPCC facilities are currently operating at 100% of their designed capacity, and we continue to receive strong orders due to the combination of measurable cost savings and performance improvements that our NPCC products offer our customers. We believe the additional capacity at the Zibo facility will enable us to meet the growing demand from our ever expanding customer base, while assuring that we will maintain our well- established market position as the industry’s leader.”

About ShengdaTech, Inc.

ShengdaTech Inc. (“the Company”) is engaged in the business of manufacturing, marketing and selling nano precipitated calcium carbonate (“NPCC”) and coal-based chemicals for use in various applications. The Company converts limestone into NPCC using proprietary technology. The unique chemical and physical attributes make NPCC a valuable cost-effective ingredient in tires, paints, polyvinyl chloride (“PVC”) building materials and other products. NPCC enhances the durability of many products by increasing strength, heat resistance, and dimension stabilization. The Company is also engaged in the manufacture and sale of coal-based chemical products, namely ammonium bicarbonate, liquid ammonia, methanol and melamine. The Company markets and sells its coal-based chemical products mainly for chemical fertilizers and raw materials in the production of organic and inorganic chemical products, including formaldehyde and pesticides. For more information, contact CCG directly or go to ShengdaTech’s website at http://www.shengdatechinc.com/ .

Safe Harbor Statement

Any statements set forth above that are not historical facts are forward- looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as the preferential tax treatment from government, unanticipated changes in product demand especially in the PVC, polyethylene, and paper industry, changes in composition of these industries, ability to attract new customers, ability to increase our product’s applications, ability of our customers to sell products, cost of raw material, downturns in the Chinese economy, and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission.

   For further information, please contact:     Crocker Coulson    President    CCG Investor Relations    Tel:   +1-646-213-1915    Email: crocker.coulson@ccgir.com    Web:   http://www.ccgirasia.com/  

ShengdaTech, Inc.

CONTACT: Crocker Coulson, President, CCG Investor Relations, +1-646-213-1915, or crocker.coulson@ccgir.com, for ShengdaTech Inc.

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




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