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Future Plans

Focus on DME sales in China
As we believe that the growth of demand in DME will exceed the growth of demand in Methanol, we expect DME sales to become our main growth contributor from the first half of 2007. We intend to focus our financial and operating resources on DME production and sales, especially for use as a blendstock for LPG and as an alternative transportation fuel.

Expand DME production capacity in existing and new locations
By the first half of 2007, we will increase DME capacity in our Shandong plants from approximately 150,000 mtpa to 400,000 mtpa, and we plan to add a further 200,000 mtpa by acquiring a new facility in Guangzhou. In the longer term, we plan to add an additional 1 million mtpa production capacity through the development of a new plant in Zhangjiagang, Jiangsu Province, for which construction of the first phase is expected to commence in the first half of 2007. These two new plants are strategically located in the top two regions with unmet LPG demand in the PRC. Our target is to have an aggregate DME production capacity of about 2.5 million mpta by the end of 2009.

We intend to actively promote and foster the development of the DME market, by providing technologies and operational support to our current and potential customers, participating in pilot projects for DME fuel transportation with various government entities and private companies, and publishing articles in trade journals, magazines or reputable websites to increase the public awareness and acceptance of DME.

Enhance our access to raw materials
We will continue to build on existing relationships with our coal suppliers, as well as identify alternative supply sources to ensure we do not face concentration risks. We are also seeking to establish relationships with Methanol suppliers who are close to our production facilities to ensure security of supply at reasonable prices.