Keyuan Petrochemicals Receives Three Patent Notices from Patent Office

NINGBO, China, March 5, 2013

In January 2012, Keyuan signed a cooperation agreement with Fangchenggang City to build a new petrochemicals production facility, Guangxi Keyuan New Materials Industrial Park, in Guangxi Province (the "Guangxi Project"). Once the facility is fully operational, it is expected to have annual production capacity of 400,000 metric tons of Acrylonitrile Butadiene Styrene (the "ABS") and related products. Keyuan has been focused on the complex pre-construction government approval work and on research to improve the efficiency of the production of Guangxi Project since the signing of the agreement.

While working with East China University Of Science and Technology (ECUST), the Company discovered the technique to improve recovery rate and output capacity of Acrylonitrile. Based on that discovery, the Company applied for patents for three devices in the production process in August, 2012, which are Fluidization Reaction System of Acrylonitrile, Cooler of Acrylonitrile Gas and Absorption Tower of Acrylonitrile. These three technology inventions are used for improving the output capacity and recovery rate, decreasing discharge waste to improve production efficiency. The Company has now received the patent notices from Patent Office, which means its application has been approved.

"We are pleased that we can improve the production technology of Acrylonitrile, which will make our production efficiency better than those not in possession of such technology in the market, thereby further improving our competitive strength," said Mr. Chunfeng Tao Chairman and Chief Executive Officer of Keyuan Petrochemicals Inc. "Acrylonitrile is also one of main raw materials needed to produce ABS, therefore, this technology invention will be beneficial for the whole project."

About Keyuan Petrochemicals, Inc.

Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. Having commenced production in October 2010, Keyuan's operations include an annual petrochemical manufacturing design capacity of 720,000 MT for a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilization and yields. In order to meet increasing market demand, Keyuan plans to expand its manufacturing capacity to include a SBS production facility which was completed in September 2011. One SBS production line began commercial production in December 2011 and the second line began commercial production in August, 2012. The Company plans to add additional storage capacity, a raw material pre-treatment facility, an asphalt production facility, and an ABS production facility.

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