Yulong Signs Recycling Agreement for Zhengzhou City District; Project Potentially Worth More Than $35 Million over Four Years

PINGDINGSHAN, China

Yulong Eco-Materials Limited (NasdaqCM: YECO), a vertically-integrated manufacturer of eco-friendly building products, today announced it has signed an agreement to process and recycle construction waste in Zheng Dong New District of Zhengzhou City — the provincial capital of Henan Province — and has commenced work on the project in the District’s Gaozhuang administrative village.

As a result of the agreement, signed with the District’s Municipal Construction Office, Yulong – on a timetable set by the Construction Office – will service each of the District’s 28 administrative villages as may be assigned by the Construction Office, and will receive approximately $2.35 (15RMB) per cubic meter of construction waste processed.

In Gaozhuang, Yulong expects to recycle roughly 586,000 cubic meters of construction waste, generating nearly $1.4 million in revenue.

According to the Construction Office, all 28 villages are expected to produce more than 15 million cubic meters of construction waste over the next four years, equating to total potential revenue to Yulong of over $35 million, if all 28 villages are assigned to and serviced by the company.

In addition to revenue received from its recycling services in the District, Yulong shall also have the right to sell its processed waste to local construction companies as recycled raw materials, which would produce additional incremental revenue.

To date, Yulong is the only company appointed to process construction waste in the District. Although the company’s agreement with the Construction Office does allow for the possibility that other recycling providers may become involved, Yulong’s CEO, Mr. Yulong Zhu said he is positioning the company to be able to service as many of the villages as may be assigned by the Construction Office, and expects to be working in at least six villages by the end of next June.

To service these villages, the company plans to utilize up to five mobile recycling stations — including four that Yulong is in the process of acquiring — each with an annual processing capacity of two million metric tons.

One of these stations is currently in use in Gaozhuang, and the other four stations will be deployed across the District as additional villages are assigned to Yulong.

In each village Yulong will be required to complete processing of the waste within a specified length of time, to be determined by the total volume of waste at hand.

Mr. Zhu noted, “We are very proud to have signed this agreement – our second in a new city within two months, and one of the largest contracts we have signed to date. We strongly believe this agreement further validates our growth strategy of expanding our recycling business beyond our base in Pingdingshan and offering other local and provincial governments a cost-effective and technically advanced solution to manage and reduce their construction waste and related pollution.”

The company is currently submitting additional contract bids in several of these areas, added Mr. Zhu, and hopes to provide an update on this progress in the near future.

About Yulong Eco-Materials

Yulong is a vertically integrated manufacturer of eco-friendly building products and a construction waste recycling company, located in the city of Pingdingshan in Henan Province, China. The Company is currently Pingdingshan’s leading producer of fly-ash bricks and concrete as well as its exclusive provider of waste management services.

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