China Biodiesel International Holding Co., Ltd. ('CBI' or the 'Company')

Pre-close statement for the year ended 31 December 2008

CBI, one of the leading producers of biodiesel focused on the Chinese market, today announces a pre-close trading update for the financial year ended 31 December 2008. The Company also confirms it will announce its results for the year ended 31 December 2008 ('2008 Financial Year') on 20 April 2009.

In the second half of 2008, the petrochemical industry experienced a decline in demand for its products linked to the international financial crisis and the perceived growth prospects of the Chinese and global economies. This fall in demand led to a decline in the Company's sales volume during the second half of the 2008 Financial Year. CBI's sales volume during the second half of the 2008 Financial Year was 11,853 metric tons, 11.66% less than 13,418 tons sold in the first six months of 2008. 

Revenue for the second half of the 2008 Financial Year was further impacted by falls in the selling price of CBI products. The average selling price in the second half of the 2008 Financial Year of RMB6,309 per ton was 5.42% less than RMB6,671 per ton achieved in the first half of the year. Falling selling prices also impacted the cost of raw materials, which while in 2009 should lead to improvements in gross margins, has led to the Company incurring a loss on carried inventory. As set out in the October 2008 trading statement, the board of CBI therefore expects to report an operational loss in the second half of 2008.

The financial grants received by the Company during the 2008 Financial Year reached RMB15.35 million. In December 2008, CBI's branded biodiesel of 'Zhuoneng' was officially named by the government as a 'Provincial Famous Brand Product'.

In December 2008 regulations released by the Chinese government announced that biodiesel companies which utilise waste animal and vegetable oils as feedstock can apply for refund of value-added tax. The board of CBI is pleased to confirm that both its Longyan and Xiamen subsidiaries have both recently qualified for this refunding and therefore the Company expects going forward to enjoy lower tax expense and potentially higher margins.

CBI's chairman, Mr. Huodong Ye, commented: 

'In 2008, the Company experienced many great challenges but also achieved much experience. We believe the global economic crisis will continue to impact the biodiesel industry in 2009, however we are confident that the financial performance of the Company will improve during the year as a more mature product mix is released into the market, our brand is further acknowledged and the recent preferential tax policies are implemented. 

For further information:

Gloria He, CFO: +86 (592) 7191103
James Wang, Company Secretary: +86 (592) 7191109

Tom Price or Bobbie Hilliam
Evolution Securities: +44 (0) 20 7071 4300