Gulf Resources, Inc. (Gulf Resources) said that its wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Co., Limited (SYCI) has received $7.5 million order from Kuerle City Xingdong Trading Co., Ltd. (Xingdong) on March 3, 2009 to deliver environmentally friendly chemical products. Gulf Resources will deliver 2,500 metric tons of environmentally friendly polyether lubricant, and 1,500 metric tons of environmentally friendly solid lubricant from March 2009 to December 2009.

Gulf Resources, through SYCI, has began formal production in September 2008 at its new chemical production line with 5,000 metric tones of annual capacity of environmentally friendly additive products, including solid lubricant and polyether lubricant, for use in oil and gas exploration. SYCI has received an initial three-month purchase order from Xingdong in September 2008 to deliver 800 metric tons of its environmentally friendly oil and gas exploration additive products worth a total of $1.6 million. The company’s environmentally friendly oil and gas exploration chemical products generated a gross profit margin of approximately 42% in 2008.

“The feedback from end customers regarding the quality and performance of the first round of chemical products sold through Xindong was excellent, resulting in these follow-up orders,” commented Ming Yang, chief executive officer of Gulf Resources, “We expect to see solid growth in sales of our environmentally friendly chemicals products this year due to increasing oil and gas exploration activities in the Xinjiang autonomous region, the primary region for oil and gas exploration in China. By actively developing and expanding our high-end, higher margin chemical business parallel to our bromine and crude salt business, we are optimistic about maintaining our overall gross profit margin even though bromine prices may remain volatile in the first half of 2009.”

Gulf Resources, Inc. is a China based manufacturer of bromine, crude salt and specialty chemical products.