VANCOUVER, Oct. 5 /CNW/ -- Hanwei Energy Services Corp. ("Hanwei" or the "Company") today provided an operational update for its three operating segments: FRP Pipe, Wind Power Equipment, and FGD Products. In addition, it provided updated guidance for the 12 month period ending December 31, 2009.

FRP Pipe

Domestic Chinese demand for FRP pipe products continues to grow year over year, both in Hanwei's core oil and gas markets, as well as new markets such as water transmission and salt mining. However, in some international markets, most notably Kazakhstan and the southeastern Asia, the Company has experienced a slow down in orders due primarily to project delays and the impact of the global financial crisis. Despite the lower growth in international sales, Hanwei expects overall sales of FRP pipe to grow by 20 percent or better for the 12 month period ending December 31, 2009 compared to the same period in 2008. The Company did not previously provide guidance by sector; however, management had expected FRP pipe revenues to grow by 30 percent or better in 2009 compared to 2008. Since FRP pipe margins are higher for China sales, Hanwei expects gross and net margins to improve in 2009 compared to 2008.

Hanwei was successful in diversifying its customer base in 2009 by industry and geography due to investments made in product development and marketing. In China, Hanwei introduced FRP pipe products used in the salt mining industry for water injection into salt deposits and transportation of salt water to processing plants, replacing steel pipe because of the longer life of FRP pipe under corrosive conditions. Hanwei has obtained sales orders and expressions of interests of approximately $5 million from the China salt mining industry for delivery in the fourth quarter of 2009 and early 2010. After a successful launch of its FRP pipe for salt mining in 2009, Hanwei expects growth opportunities from this industry going forward.

In the FRP oil pipe sector, Hanwei has received expressions of interest from the Middle Eastern oil market, adding a new market for FRP oil pipe, to diversify its customer base now concentrated in China and Kazakhstan. The Company expects to start to supply to this market starting in late 2009 from its Daqing facility. Also, Hanwei is setting up production lines in its new manufacturing facility in Tianjin to add capacity and reduce shipping cost to its new Middle Eastern market, with deliveries expected to commence in the second quarter of 2010. It is expected that in 2010 most of the FRP pipe orders for the Middle Eastern market will be supplied from the Tianjin manufacturing facility.

Wind Power Equipment

Deliveries of wind turbines to Daqing Ruihao Energy Technology Co., Ltd. ("Ruihao") and its affiliated companies have been partially delayed to the first half of 2010 due to the later than expected government approval of some of their wind farm projects. As previously disclosed, Hanwei has secured the supply chain and funding to deliver 118 MW of wind power equipment to Ruihao under its agreement to supply 1,200 MW of wind power equipment products. Hanwei previously disclosed that it expected the majority of deliveries to be made in the second half of 2009 and in early 2010, but Ruihao and its affiliated companies that operate the wind farms will be unable to take delivery and install most of the products that were to be delivered during the winter season. However, Hanwei does nevertheless expects to deliver nineteen HV1500-70 1.5-megawatt ("MW") double-fed, variable speed turbines before calendar year end 2009 for installation in the Du Meng County wind farm located in Heilongjiang Province and operated by Ruihao's Daqing Longjiang Wind Power Co. Ltd. ("Longjiang") subsidiary, which is now beneficially controlled by China Wind Power International Corp., a company listed on the TSX Venture Exchange.

The wind power equipment is to be supplied to three subsidiaries of Ruihao, including Longjiang, which owns and operates the wind farm in Du Meng County, Heilongjiang Province.