Jun. 9, 2003

Toyo Engineering Corp. of Tokyo, Japan (TEC, president & CEO Toshihiko Hirose) has received a contract from Lutianhua Group Inc., a Chinese public chemical company, for a methanol production plant at the Sichuan West Chemical City in Luzhou of Sichuan province. This plant, promoted jointly by the governments of China and Sichuan province, will have a production capacity of 1,350 tons/day methanol, and is in line the Lutianhua's stated plan for implementation of dimethyl ether (DME) for a fuel use as a next-generation clean-energy source.

Specifically, the project entails construction of a plant which will manufacture methanol to be used in the production of DME, under the license of a British company Johnson Matthey (Synetix) for the methanol synthesis incorporating with TEC's patented MRF-Z® Reactor in the core section of the methanol plant.

TEC's service range for this project includes licensing, basic design, major equipment procurement and other technical services including review of detailed design executed by the client and support for commissioning the synthesis system. Completion of the plant is scheduled for spring 2005.

This contract was awarded following a previous contract by the client for the world's first commercial fuel-use DME plant based on TEC process, with a capacity of 10,000 tons/year, and will be the third plant in China utilizing the MRF-Z® Reactor. The commercially proven reliability of the MRF-Z® Reactor in methanol plants, as well as the results achieved by the DME plant construction in progress and the already-completed large-capacity (2000 ton/day) urea granulation plant, also licensed by TEC, were among the major factors considered by the same client in awarding this contract to TEC.

TEC, which can boast of abundant achievements in technologies of synthesis gas production from natural gas, will take advantage of this new contract to vigorously deploy its operations in China, aiming for future methanol and DME contracts in China's inland regions, which have minor but many gas fields.

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