zhengli polymer - sample pitch book

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Zhengli Polymer Technology Co., Ltd.

Enhanced oil recovery and wastewater treatment in China

April 2011

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Disclaimer

This sample presentation includes forward-looking that are subject to important risks, uncertainties and assumptions concerning future conditions that may ultimately prove to be inaccurate and may differ materially from actual future events or results. Likewise, certain confidential information has been removed from this sample presentation, resulting in this sample presentation not being a complete representation of the subject company and its future plans. All statements other than statements of historical fact contained in this presentation that address activities, events or developments that may occur in the future constitute forward-looking statements. Forward-looking statements may include projections, as well as statements regarding future plans or economic performance, or the assumptions underlying any of the foregoing.

The poster of this sample presentation does not assume responsibility for the accuracy or completeness of such forward-looking statements. As such, readers are cautioned not to place undue reliance on such forward-looking statements.

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A polymer with applications in oil extraction

and wastewater treatment industries

Zhengli Polymer is a Leading Chinese Producer

of High-Quality Polyacrylamide (PAM)

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Zhengli Polymer at a Glance

Revenue: $XX.X million;

net profit: $X.X million

(2010)

Production capacity of

11 kilotonnes (“kt”)

30+ variances of PAM

~200 employees

Established in 1995 in

Zhengzhou, Henan Province

#1 PAM producer in

Central Western China

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PAM is in High Demand

417,000

Consumption

CAGR of 17% (2006 to 2009)

tonnes of PAM is consumed in China annually1 >

PAM is more than a

$1.2Billion industry in China

1 Source: China National Functional Polymer Industry Committee,

China National Chemical Information Network (2009)

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PAM Application #1: China’s Oil Problem

Rapidly rising

demand for oil (10-year CAGR of 6.5%*)

Declining oil output

from ageing wells

Increasingly reliant upon imported oil

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* 1999 to 2009

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PAM and Enhanced Oil Recovery

can be recovered using

PAM flooding compared

to conventional

techniques

50% more oil

>$30-$40

economical to use PAM

for tertiary oil extraction

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PAM and Enhanced Oil Recovery

of oil produced

globally is through

tertiary extraction

Only 3%

China is the technological leader

for EOR using PAM 8

Source: International Energy Agency

Only 15% of oil produced in

China is currently

extracted using PAM

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PAM Application #2: Wastewater Treatment

In China,

pollution

affects

75% of

rivers &

lakes

90% of

ground-

water

Chinese government is responding

with increased spending and

stricter regulations

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Wastewater Treatment

PAM

is the

solution!

60% of global PAM consumption

outside of China is used for

water treatment

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Wastewater Treatment

PAM WT Consumption in China

(000’s tonnes)

2006

A new

market for

Zhengli

Polymer

140

0 2007 2008 2009 2010E

120

100

80

60

40

20

CAGR

= 36%

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Zhengli Polymer: A Proven Business Model

Strong brand equity

Strong R&D and product

development capabilities

Long-term industry

relationships

Low-cost producer of high-

quality PAM for multiple

applications

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Financial Highlights

Revenue

(CAD millions)

2006 2009 2010 2006 2009 2010

Net Income

(CAD millions)

2007 2008 2007 2008

CAGR

XXX%

CAGR

XX%

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Growth Strategy

Develop new oilfield

customers

Develop new products

Continue to grow oil

extraction business

Expand wastewater

treatment business

Build strategic alliances

Leverage brand equity in

oil business

Direct sales to end users

M&A?

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Growth Strategy

Continue to expand production capacity

1 Annualized production capacity commencing Q3 of 2011.

2 Annualized production capacity by the end of 2012.

2012E1 2011E1 2010 2006

6 kt

11 kt

18 kt1

28 kt2

Medium-

term plan

to expand

capacity to

68 kt in <5

years

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• Track record of profitable growth

• Well entrenched in enhanced oil recovery market

• Established foothold in fast-growing wastewater treatment industry