Gulf Resources Optimized on China's Bromine Market      

Mr. Liu, CEO of Gulf Resources, Inc., a leading manufacturer of bromine, crude salt and specialty chemical products in China, recently told CCR that China's bromine market has a bright prospect in the second half of 2009.
   He said that bromine is mainly used as raw material in the production of fire retardant, pharmaceuticals, pesticides and industrial refrigerants. Its utilization in China's fire retardant sector is expanding and China's "appliance rustication" policy has accelerated refrigerants popularization in refrigerator and air conditioner market. Lithium bromide as a refrigerant has much lower cost than Freon, and its demand will also expand in the future. In terms of pharmaceuticals, medical reform provides a good opportunity for the development of antibiotics industry.
   Mr. Liu said demand for bromine in China is about 190 000 tons at present, among this, Gulf Resources contributes 160 000 tons of output. The company is planning to expand its capacity through acquiring bromine and crude salt manufacturing assets. (CCR2009 No. 3)
   Bromine and crude salt account for about two thirds of Gulf Resources' business, and the company's main bromine production bases are in China, providing 20% of China's total bromine output.
   Mr. Liu continues that Gulf Resources' performance was heavily influenced by the economic crisis in 2008, especially in December 2008 and January 2009 when the company's revenue dropped to the bottom. In the second quarter of 2009, Gulf Resources' performance has bottomed out with net revenue of US$29.6 million, a year-over-year increase of 24.5%, and gross margin was 44.4%, compared to 40.8% in second quarter of 2008. Revenues for the first six months of 2009 were US$53.2 million, up 16.2% from revenues of US$45.8 million for the first six months of 2008. Gross margin was 43.7%, compared to 41.8% for the first six months of 2008.
   "We expect bromine prices to increase steadily in the remainder of 2009 as we continue to see domestic demand for bromine exceed domestic supply, and as we have seen major customers become more accommodating towards higher offering prices due to optimism regarding future market conditions," commented Mr. Liu.
    For fiscal year 2009, Gulf Resources reaffirms the revenue guidance of approximately US$98 million to US$103 million, net income of approximately US$27 million to US$29 million.