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Announcement by Luxi Chemical on the Investment in the First Phase of a Project to Produce 1.2 Million Tons of Bisphenol A Per Year. Author/Source: Energy & Chemical Industry News. Date: November 17, 2021. Clicks: 10. Announcement by Luxi Chemical Group Co., Ltd. on the Investment in the First Phase of a Project to Produce 1.2 Million Tons of Bisphenol A Per Year. The company and all members of its board of directors guarantee that the information disclosed is true, accurate, and complete, with no false records, misleading statements, or significant omissions. I. Overview of the Project Investment 1. At the 10th meeting of its eighth board of directors, held on December 23, 2020, Luxi Chemical Group Co., Ltd. (hereinafter referred to as “the Company” or “our Company”) approved the resolution regarding the proposed investment projects. The Company plans to invest in the construction of a project for producing 600,000 tons per year of caprolactam and nylon 6, a project for producing 1.2 million tons per year of bisphenol A, and a project for integrated downstream processing of ethylene – all of these projects will be implemented in phases, thereby continuously improving the industrial layout within the park and enhancing the Company’s competitiveness and overall strength. For more details, please refer to the announcement issued by the Company on December 25, 2020, on the Juchao Information Network (Announcement No.: 2020-090). 2. On November 16, 2021, the company held the 19th meeting of its eighth board of directors, during which the resolution regarding the investment in the construction of the first phase of a project to produce 1.2 million tons of bisphenol A per year was approved. In light of the company’s product portfolio and market trends, the company plans to invest in building the first phase of this project, thereby extending, enhancing, and strengthening its production capabilities, and thus improving its competitiveness and overall strength. In accordance with the Company’s Articles of Association and Article 9.2 of the Rules for the Listing of Shares on the Shenzhen Stock Exchange, once this proposal is approved by the company’s board of directors, it does not need to be submitted to the company’s shareholders’ meeting for approval. 3. This investment does not constitute a related-party transaction, nor does it constitute a major asset restructuring. II. Investment Entity This project is carried out by our company, and its basic information is as follows: Company Name: Luxi Chemical Group Co., Ltd. Unified Social Credit Code: 91370000614071479T Address: Headquarter of Luxi Chemical in the High-Tech Industrial Development Zone of Liaocheng City Enterprise Type: Joint Stock Company Legal Representative: Zhang Jincheng Registered Capital: 190,431.9011 million yuan Business Scope: Production and sales of chemical fertilizers and chemical raw materials within the scope permitted by the safety production license (operations by branch offices are subject to relevant restrictions) ； Heating and steam supply services ； Production and sales of chemical products (excluding hazardous chemicals and drugs easily used for drug production) ； Design, manufacturing, installation, and sales of specialized equipment for chemical production ； Chemical engineering technical consulting and services. Import and export of goods or technologies (**except for those whose import and export is prohibited or requires administrative approval**). (For projects that require approval according to law, business operations can only be carried out after obtaining approval from the relevant authorities.) III. Basic information on the investment target The construction scope of this project mainly includes: a 200,000-ton bisphenol A production facility along with various supporting utilities and auxiliary facilities. The total investment for the first phase is expected to be 790 million yuan. The funds required for the project’s construction will be obtained mainly through the company’s own resources and bank loans, to ensure the smooth progress of the project. The project is expected to be completed and put into operation in 2022, enabling the production of an additional 200,000 tons of bisphenol A to meet the needs of the company’s polycarbonate production facilities. Once the project is put into operation, it is expected to generate annual revenue of 2.8 billion yuan and profits and taxes of 380 million yuan. IV. Purpose of the project investment, impact on the company, and existing risks: Apart from bisphenol A, the raw materials used in the company’s current polycarbonate production facilities are supplied from within the industrial park. To address the issues related to raw material supply, the company plans to invest in the first phase of a project to produce 1.2 million tons of bisphenol A, thereby securing a stable source of raw materials and reducing the impact of market fluctuations and transportation risks associated with purchasing raw materials from external sources. Leveraging the industrial structure of the park and its advantages, the company further extends, complements, and strengthens the industrial chains. It actively focuses on the sourcing of raw materials for chemical new material products, continuously improving the circular industrial chains within the park. As the industrial structure of the park continues to evolve, this lays a solid foundation for the company’s future expansion in the field of chemical new materials. During the project construction phase, the investment cost is influenced by various factors such as construction materials, labor costs, and the progress of the project, which in turn affects the overall investment cost of the project ； There are uncertainties regarding the trial operation of the project, raw material prices, and the future market sales of the products; the profitability of new projects is also uncertain, posing certain risks ； In addition to bank loans and self-funded funds for this project, the company will actively explore other financing channels and methods to prevent and reduce financial risks. V. Independent Directors’ Opinion: The company’s independent directors believe that the company has conducted thorough market research and feasibility studies on this project. Investing in the construction of the first phase of this project, which will have an annual production capacity of 1.2 million tons of bisphenol A, will help to develop the chemical new materials industry, further advance the circular economy, increase the market share of the company’s products, and enhance the company’s profitability. This approach is in line with the long-term interests of the company’s shareholders, and therefore they approve of the construction of this project. VI. List of Documents for Reference 1. Resolutions of the 19th Meeting of the Eighth Board of Directors ； 2. Independent opinion of the independent directors on the company’s investment in the first phase of the project to produce 1.2 million tons of bisphenol A per year. This is to announce. Board of Directors of Luxi Chemical Group Co., Ltd. November 16, 2021