China Integrated Energy Provides Update on Expansion Plans

XI'AN, China, Jan. 27, 2011 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (Nasdaq: CBEH) (the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China ("PRC"), today announced an update on its expansion plans.

Management is committed to growing all three of the Company's business segments - the production and sale of biodiesel, the wholesale distribution of finished oil and heavy oil products, and the operation of retail gas stations - to support the Company's long term growth strategy. As of September 30, 2010, the Company had cash and cash equivalents of approximately $79.7 million. Together with strong operating cash flow and net proceeds of approximately $37.4 million from two recent capital raises, the Company believes that it has adequate funds to support its growth plans.  In the fourth quarter of 2010, the Company spent a total of $25.7 million for two separate acquisitions that will generate a combined $44.3 million in revenues in 2011.

1. Shenmu gas station: On October 25, 2010, the Company acquired Shenmu gas station in Yulin City, Shaanxi Province, for $9.2 million in cash. Management estimates the Shenmu gas station will generate approximately $12.3 million in revenue in 2011.
2. Chongqing biodiesel production plant: On October 26, 2010, the Company acquired a 50,000-ton biodiesel production facility, located in Chongqing City, from Chongqing Tianrun Energy Development Co., Ltd., for $16.5 million in cash. Management expects this acquisition to add approximately $32 million in revenue in 2011.

Additionally, the Company is expected to complete the construction of its new 50,000-ton biodiesel production facility adjacent to its existing 100,000-ton biodiesel production facility in Tongchuan City, Shaanxi Province, by the end of this month. The total construction cost of the new 50,000-ton biodiesel production facility is now approximately $19.3 million, of which $18.3 million has been spent by the Company to date. The remaining $1 million will be paid in the first quarter of 2011. The Company expects to generate approximately $21 million in annual revenues from this new facility in 2011.

The Company has identified the following as priority capital projects in 2011:

(a) The 200,000-ton facility is expected to be ramping up to 90% capacity in the fourth quarter of 2012, and expected to reach full utilization in 2013. The new 200,000-ton facility is expected to contribute $84 million in annual revenue in 2012 and $140 million in annual revenue in 2013.

Update on the Acquisition of Hainan Lin Gao Chemical Co., Ltd

On January 3, 2011, the Company announced plans to expand its biodiesel production capacity by acquiring assets including but not limited to infrastructure, land use rights to 15 acres of land, and storage tanks with 15,000 cubic meters of storage capacity in Lin Gao County, Hainan province, for approximately $9 million in cash. The Company is performing due diligence, and expects to complete the acquisition by the end of the first quarter 2011.

The Company plans to build a 300,000-ton biodiesel plant at this facility and has revised its phase one expansion plan to construct a 200,000-ton biodiesel production facility, from the previously announced 100,000-ton facility. The estimated construction cost of phase one is approximately $37 million and is expected to be completed fourteen months after the closing of the acquisition.

Working Capital Needs to Fuel Growth in 2011

For 2011, the Company estimates a $45.0 million to $50.0 million of working capital requirements for the growth of all three business segments, which includes an increase of approximately 25% to 30% in wholesale distribution volume in 2011 from 2010, and the two capital projects of Hainan Lin Gao Chemical Co., Ltd. and Chongqing FengDou Keyu Trade Co., Ltd. The Company believes that it has adequate capital to support its current growth plans.

About China Integrated Energy, Inc.

China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in China engaged in three business segments: the production and sale of biodiesel, the wholesale distribution of finished oil and heavy oil products, and the operation of thirteen retail gas stations. The Company operates a 100,000-ton biodiesel production plant located in Tongchuan City, Shaanxi Province and a 50,000-ton plant in Chongqing City, China. The Company expects to increase the total biodiesel production capacity to 200,000 tons upon completion of a new 50,000-ton production facility adjacent to the 100,000-ton plant in Tongchuan City in January 2011. The Company utilizes a distribution network covering 16 provinces and municipalities, established over the past 11 years, to distribute both heavy oil and finished oil including gasoline, petro-diesel and biodiesel. For additional information on the Company please visit http://www.chinaintegratedenergy.com.

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Safe Harbor Statement

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.