Tiger Ethanol says it will benefit greatly from the choice of Hami, Xinjiang Province in far western China for its first ethanol plant.

According to James Leung, President and CEO of Tiger: "We are gratified to see that the last year of preparation by our staff both in Canada and China is paying off in that we are now ready for the next step of implementation of our project, the construction of the factory. In anticipation, we have had a major engineering design firm prepare preliminary plans for the factory, orders for equipment are being readied and we are confident that we will remain on schedule for the construction and completion of our first plant."

The company says the Hami site has obtained full support from all levels of government and has an abundant supply of raw materials and also has available an extensive area of high quality farmland for future expansion of the agricultural raw materials resource base. The availability of skilled manpower for running and servicing the plant is also an asset of the Hami site.

Lou Qi Shou, a 5% joint venture partner, operates a successful distillation plant producing potable alcohol in Hami. Lou has been chairman of the Xinjiang Wang Yi Brewing Company in Hami since 1999 and he will serve as a consultant to the joint venture after start-up and normal operation of the plant.

The company has received all necessary operating licenses and permits to build and operate an ethanol plant and Xinjiang Province has granted the venture a long term Deed of Use for 150 acres of industrial land to be used as the site of Tiger's ethanol plant. In further support of Tiger's Venture, the plant site will be furnished to the venture with all necessary services in place including roads, electricity, water, communications and railroad sidings.

Xinjiang province has implemented broad policies to attract foreign investment to develop its central and western regions in accordance with China's national policies. According to the policy, the staff at the Provincial planning department were directly influenced by negotiations regarding China's accession to the World Trade Organization and the measures to be adopted by the government of the region after China's entry into the WTO. As a result, the Provincial Development Policies have been designed in a manner that should provide a comparatively stable business environment for ventures such as Tiger.

Among the recently adopted preferential policies for foreign investment were those targets at 'new-type' industries that are intended to serve the National interest such as those involved in the development of energy-saving technologies, technologies for resource regeneration and comprehensive utilization (renewable fuels), and environmental pollution control projects and control technologies. As a result of these preferential policies, the company says it received a tax exemption incentive from the Hami government. This exemption provides the company's joint venture with full relief from income tax for five years commencing when the company first earns a profit. From the sixth to eighth year thereafter, the income tax will be 33% of the then prevailing rate, after which the corporate tax will be accessed at the full rate that now equals to 33% of net earnings.

The company broke ground for its Hami, Xinjiang Province plant on November 29, 2006. The ground breaking ceremonies were attended by the political leadership of both Hami and Xinjiang Province.

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