U.S. Company Signs Agreement to Implement First Ever Government-supported Heavy Metals Cleanup in China.

WEST NYACK, NY--(BUSINESS WIRE)--Sept. 21, 1999--

Solucorp Industries, Ltd., West Nyack, New York, Culminates

Two-Year Effort

In the spirit of improving the climate of U.S.-Chinese negotiations over admitting China to the World Trade Organization, China recently signed a multi-faceted agreement giving the green light to an American company to begin China's first government supported cleanup of heavy metals contamination, one of the country's worst environmental problems.

The first phase of a massive project to begin remediation of a huge chromium slag mountain at the Tong Sheng Chemical Plant, owned by BOHAI Chemical Group Co., in the city of Tianjin, China's third largest, will begin next year. The agreement calls for the remediation to be accomplished by use of a process utilizing MBS(R) (Molecular Bonding System), a patented heavy metals remediation system developed by Solucorp Industries, Ltd., (OTC: SLUP) West Nyack, New York.

The municipal government of Tianjin advanced a $1 million loan to BOHAI for the start-up of Phase I of the project. BOHAI Chemical is responsible for funding the entire project.

In addition to remediation of the chromium slag mountain -- estimated officially at 170,000 tons, but may be as large as 400,000 to 800,000 tons -- two "in-line" systems will be installed by Solucorp at the BOHAI Chemical plant production facility, to eliminate future contamination at its source. The in-line systems, installed as part of the production of sodium chromate at the Tong Sheng plant, remediates the slag as it is being produced.

According to Peter Mantia, President of Solucorp Industries, who was present in China when the agreement was signed, the mayor of Tianjin strongly supports utilizing Solucorp's MBS technology, which has the status of a U.S. EPA Superfund Innovative Technology, to permanently solve the heavy metals contamination problem that has plagued the city of Tianjin and its 9.2 million people for more than 40 years.

The agreement, which made national news in China, was reported as the first government-sponsored heavy metals cleanup. Chinese officials referred to the agreement in the context of the American agreement to extend normal trade relations with China as set forth in the July 27, 1999 statement by President Clinton in which the environment of China was an issue.

This agreement with China was signed jointly by Solucorp and Smart International, Solucorp's representative in China. Solucorp and Smart International entered into a license agreement in 1997 whereby Smart has the exclusive rights to Solucorp's MBS process in China. Smart International is the primary producer of the chemicals required for the MBS process.

The Tianjin project when completed, based on the lower estimate of 400,000 tons of slag, will require approximately 32,000 tons of MBS chemicals to be produced by Smart. Based on this estimation, Phase I remediation operations alone will require 13,600 tons of MBS material. Solucorp has stockpiled about 7,000 tons at Smart's facilities and has prepaid an additional 7,000 tons of chemicals over the past two years. The BOHAI agreement requires Solucorp to ship existing inventory of MBS to a Solucorp site location at the BOHAI facility. BOHAI will pay Solucorp for the inventory as it is used in operations, which are expected to begin in the first quarter of 2000.

Solucorp is unable to determine the full value of this agreement, but management stresses the importance of this agreement as the successful culmination of two years of efforts by Solucorp and Smart to convince the Chinese government of the superiority of the MBS process and to penetrate the environmental cleanup markets in China through its relationship with BOHAI Chemical and with the support of the Chinese government, the Chinese equivalent of the EPA, and high ranking government officials.

The importance of the agreement to the government of China is attested to by the high ranking officials who attended the signing, including the secretary of the party manager representing the government of China; the vice mayor of Tianjin; the department chief of the Tianjin municipal government; the deputy director general of the Tianjin Environmental Protection Bureau; the chairman of the China Chamber of International Commerce and the chairman of the China Council for Promotion of International Trade.

The Solucorp-Smart International agreement guaranteed, among other things, completion of Phase I of the project within one year and that the treated slag under acid rain conditions would meet simulated requirements for the hazardous materials to be non-leachable for 1,000 years. The remediation outcome must also meet Chinese and U.S. Toxicity Characteristic Leaching Procedure (TCLP) requirements.

Another important facet of the agreement, BOHAI Chemical also agreed to commence negotiations to structure a joint venture whereby BOHAI Chemical Group would be an exclusive licensee to market and expand, for Solucorp and Smart, the patented MBS technology in stabilizing and remediating contaminated waste streams in existence throughout China.

BOHAI officials said that utilization of Solucorp's MBS technology, "will have a huge impact on the environmental protection movement nationally in China."

BOHAI Chemical Group is listed on the Hong Kong Stock Exchange, with annual sales of about $1.25 billlion and 130,000 employees.