TowerGroup Forecasts Cautious, Controlled Technology Investment

Press Release:

TowerGroup Forecasts Cautious, Controlled Technology Investment From U.S. Insurers in 2005

Press Release
News Article February 2005

HONG KONG, Feb. 7 /Xinhua-PRNewswire-FirstCall/ -- China Energy & Carbon Black Holdings, Inc. (BULLETIN BOARD: CHEY) , today announces its wholly owned subsidiary, YaKeLa Carbon Black (''YaKeLa''), received production contracts totalling 8,300 tons of its specialty carbon black from 4 major tire and rubber makers in China.

Hongzhou Chong Che Tire Company and Gui Zhou Guiyang Tires, the 2 largest tires manufacturers in China, have respectively placed orders of 4,000 tons and 2,500 tons of YaKeLa's ''dalxin'' and ''Tabei'' brands of specialty carbon black. Also Dong Hua Rubber Limited and Dong Tian Rubber and Chemicals Limited have also awarded purchase contracts of 1,000 and 800 tons of carbon black, respectively.

According to YaKeLa, the average selling price of these brands of carbon black is $425 per ton.

''In the past two years, we have been focusing our business on China's fast-growing automobile industry. And looks like this strategy is starting to pay off.'' comments Mr. Wang Guo Yuan, Chairman and CEO. ''Our dalxiin and Tabei brands of natural gas carbon black are among the best in China's market. Their super purity and fineness provide excellent structure dynamics properties that are sought-after by tire makers. As increase China's auto industry's demand for tire quality, so does its demand for carbon black quality. Our carbon black help the tire makers to address the needs for improved tread wear, lowering rolling resistance, lower heat build-up and tea resistance. Therefore, our carbon black is being utilized across a broad range of temperature and operating conditions for various types of tires. They are also being used in making specialty rubbers for seals and gaskets for cars and trucks.''

''We hope that this marks the beginning of a long term growth trend of our business for the years to come.'' Mr. Wang concludes.

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