HQSM Reveals Feedmill Construction Plans

Fishmeal-Free Enriched Feed to Produce Superior Products
September 2, 2005

HQ Sustainable Maritime Industries, Inc. a Delaware, U.S. corporation engaged in integrated aquaculture and aquatic product processing, announced today that it has approved a feasibility study for the construction of a new feedmill in Wenchang, near its other production facilities.

The new plant represents an investment of US$ 3.8 million producing 72,000 tons of feed annually with a total projected sales value of US$ 20 million.

The feed formulations will be prepared with the benefit of the latest American technologies to assure a minimum of toxicity (for example the elimination of fishmeal) and an optimum of health benefits for consumers.

New floating feed formulations will reduce waste in the aquaculture reservoirs thus reducing the requirement for chemicals to stabilise reservoir health.

The plant feasibility report approved by HQSM's Board, shows strong profitability especially when considered as an important component of the group's vertically integrated strategy.

Said CEO Norbert Sporns, "The feedmill construction allows HQSM to retain important technologies it has accessed, using the feed additive fabrication capabilities of its Nutraceutical plant in formulating exceptional, toxin free feeds. This will fit well with new marketing initiatives in the United States. The Group's sales and profitability will expand considerably."

HQ Sustainable Maritime Industries, Inc. is an integrated aquaculture and aquatic product processing company, with operations based in the environmentally pristine island province of Hainan, in the South China Sea.

HQ's activities include using renewable ocean resources, practicing cooperative sustainable aquaculture, using nutraceutically enriched feeds and conducting fish processing and sales. Its variety of farmed and ocean-harvested products -- ranging from tilapia and shrimp to squid and red snapper -- are sold around the world.

The Company holds HACCP certification from the U.S. FDA and the EU Code assignment of quality, permitting its products to be sold in these international markets. It has recently acquired a nutraceuticals and health products company, which is HACCP certified, and produces and sells products subject to stringent laboratory tests certified by the China Ministry of Health. This plant produces nutraceuticals, which enrich feed used by HQ's cooperative aquaculture operations. In addition to operational offices based in Haikou, Hainan, HQ has offices in Montreal, Hong Kong, New York City, Beijing, and Shanghai. (