Megola partner sells anti-scale units to Chinese dairy company

July 28, 2004
Through an overseas partner, China Mengniu Dairy Co. Ltd. has ordered and installed a large number of anti-scalant systems from Megola Inc. for use at facilities in the Chinese provinces of Henan, Liaoning, Hebei, and Inner Mongolia.

CORUNNA, ON, Canada, July 27, 2004 (BUSINESS WIRE) -- Megola Inc., which specializes in physical water treatment, microbiological control, wastewater treatment and air purification, announced that China Mengniu Dairy Co. Ltd. has ordered and installed a large number of its ScaleGuard units in various locations in the Chinese provinces of Henan, Liaoning, Hebei, and Inner Mongolia.

Through Megola's distribution agreement with Dalian Bingshan H2O3 Environmental Solutions Co. Ltd., Mengniu Dairy has installed ScaleGuard units to remedy the hard water problems its dairies have experienced in the cooling systems at various plants. Mengniu operates 40 dairy production plants in areas of China and is currently building four more plants. Hard water levels in these regions reach 30 grains of hardness, where 10 grains is considered to be hard.

"These plants have massive cooling systems that can benefit greatly from the protection Megola's ScaleGuard systems provide. Our Asian partner, Dalian Bingshan H2O3 has installed 40 ScaleGuard units in one plant alone. The potential for similar projects throughout China and Southeast Asia appears to be far larger that any of us anticipated when we entered this marketplace through our joint marketing agreement with H2O3. We are very pleased with the progress that has been made in ramping up Asian sales of ScaleGuard and we expect these numbers to continue climbing for the foreseeable future," said Megola CEO Joel Gardner.

Founded in Inner Mongolia in 1999, Mengniu is now one of the leading dairy producers in China. Its products include liquid milk, ice cream and milk powder. In 2002, it was voted by "Contemporary Managers" as the fastest growing private company in China for the period 2000-2002. It recently announced it's investing 960 million RMB � the Chinese yuan � in a three-phase project and would process more than 1,000 tons per day of milk in more than 20 production lines in June 2004. In May, Mengniu raised US$176 million in an initial public offering on the Hong Kong Stock Exchange, attracting $26 million in foreign capital from three investment companies: Morgan Stanley, Dinghui Investment and China Capital Partners.


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