China has recognized the economic and social damage caused by acid rain from sulphur dioxide emissions and has set targets for the reduction of these emissions. In its 11th Five-Year Plan the government targets a 20 percent reduction in sulphur dioxide emissions by 2010. Additionally, the Chinese government has mandated that all new and retrofitted coal-fired plants install FGD (flu gas desulphurization) equipment.

Hanwei's FGD segment produces and sells FRP products for FGD pollution control systems for coal-fired power plants in China. The segment operates under a 50/50 joint venture with Ershigs, Inc. (“Ershigs”), a leading US based FRP product manufacturer. Together with Ershigs, Hanwei provides the first China-based FRP FGD solution with advanced technology for large diameter and corrosion resistant products for the coal power market, as well as a wide range of industries with need for similar products.

The Hanwei/Ershigs joint venture operates from a manufacturing facility located in Yanjiao, Hebei Province. Hanwei has established industry and customer relationships in the China FGD market with its initial spray header product. Building on that network, the Hanwei Ershigs team has commenced marketing new FRP FGD products (to be produced using the Ershigs large diameter winder and proprietary FRP technology) and Hanwei's FRP spray headers and related accessories.