GULF RESOURCES, INC.
BROMINE AND CRUDE SALT BUSINESS
The Haoyuan Group claims to own a subsidiary named Shouguang Haoyuan Chemical Company Limited, which has aname almost identical to GFRE’s primary subsidiary, Shouguang City Haoyuan Chemical Company Limited (“SCHC”),which accounts for 77% of GFRE’s FY 2010 gross revenue.
In the following table we compared the description of the Haoyuan Group’s subsidiary,taken from Haoyuan Group’s web-site, against the description of SCHC in GFRE’s SEC filings. The similarities are beyond coincidence.The Haoyuan Group claims to own a subsidiary with almost the exact same name as GFRE’s SCHC. The Haoyuan Group’ssubsidiary manufactures and sells bromine and crude salt,just like SCHC. It operates out of exactly the same location as SCHCand has an almost identical capacity for bromine production. The Haoyuan Group’s subsidiary has a research and developmentrelationship with Shandong University,just like SCHC. Coincidence?We think not.Rather, the Haoyuan Group is in effect representing that it owns GFRE’s bromine and crude salt business. Unfortunatelyfor investors,the Haoyuan Group also claims to own and operate GFRE’s chemical products business.
GFRE’S PUBLIC FILINGS
THE HAOYUAN GROUP’S WEBSITE
Subsidiary Name Shouguang City Haoyuan Chemical Company Limited Shouguang Haoyuan Chemical Co., Ltd.Location of theCompany
Our production sites are located in the ShandongProvince in northeastern China . . . in the north regionof Shouguang city
Shouguang Haoyuan Chemical Co., Ltd., is located in the north of Shouguang city
We manufacture and trade bromine and crude salt.
manufacturing of . . . Bromine and Crude salt.
Capacity FY 2010, SCHC sold30,000tons of Bromine and370,437 tons of crude salt.
Now Haoyuan Chemical has a bromine plant with the capacity of 30,000tons per year, salt field of 12,000 acres with the capacityof 20,000 tons per year.
[the company] has been engaged in productinnovation and research and development projectswithShandong University.
Haoyuan Chemical relying onShandong University, increaseScientific and technical input, absorb the experienced technical personnel and strengthen the management.