updated 1/24/2011 10:17:59 AM ET 2011-01-24T15:17:59

NEW YORK, Jan. 24, 2011 (GLOBE NEWSWIRE) -- China Carbon Graphite Group, Inc. (OTCBB:CHGI) ("China Carbon" or the "Company"), the largest wholesale supplier of fine-grain and high-purity graphite in China, and one of the nation's top manufacturers of carbon and graphite products, today announced that it has completed the exterior construction of its new 30,000-ton plant, and will start installation and shakedown testing of a 4200-ton compressor and 36 annular kilns soon. The new facilities are expected to begin production by June 2011.

The new plant will focus on manufacturing ultra-high graphite electrodes with a diameter ranging from 600 to 800mm, fine grain, and high-purity graphite. The industrial application of these widely used products, which includes, aerospace, defense, automotive and clean tech end products, currently carries the greatest demand of all forms of graphite.

According to the Company, this new plant will have the largest and the most technologically advanced equipment in China capable of producing ultra-high electrodes with a diameter as large as 800 mm, and rounded fine grain electrodes with a diameter as large as 600 mm. The demand of these two types of graphite products is currently overwhelming. The expansion makes the Company China's first domestic producer of 800 mm diameter ultra-high electrodes and also further strengthens the Company's leading position in China's fine grain graphite market.

"Once new facilities are fully operational, our production capacity will be doubled from our current level," said Donghai Yu, China Carbon's CEO. "This new plant will focus on manufacturing higher margin products, including ultra high electrodes, and fine grain and high-purity graphite, with a gross profit margin of 30%, 35% and 21-29%, respectively. As a result, we fully expect to have higher profitability beginning in 2011 from a combination of increased production, higher margin sales and our ability of locking in raw material costs by using our $27 million loan."

"This expansion represents an important step for China Carbon that will solidify its status as one of the most significant manufacturers of graphite and related products in China."

About Graphite

Graphite as a material has the following desirable features: a compact and well-distributed structure, an ability to handle and perform in high and intense heat environments, good electrical conductivity, compression resistance, and ease of processing. It is widely used to manufacture high-temperature crucibles used in metallurgy, as a lubricant in mechanical manufacturing, for electrodes and pencil lead. It is also widely used as a refractory material and mold coating in the metallurgical industry, as a stabilizer of fire in certain military applications, as a carbon brush in the electric motor industry, as electrodes in battery manufacturing, and is used as a catalyst in the chemical fertilizer industry. By deep processing crystalline flake graphite, high-tech products such as colloidal graphite, graphite sealing materials and composite materials, graphite products and graphite wear-reducing additives can also be produced, which products have become important non-metal mineral raw materials for numerous industrial applications.

Graphite is also used in the nuclear power and in national defense industries. It serves as an effective neutron moderator in atomic reactors, the most common of which is the uranium-graphite reactor. In an atomic reactor, moderating materials should have a high-melting point, stability and be corrosion resistant. Graphite meets all of these requirements. Graphite used for this purpose should be of very high purity, and in particular, should display a limited boron content of less than 0.5 PPM. In the national defense industry, graphite is also used to produce solid fuel nozzles used in rockets, missile nose cones, components of space navigation equipment, as a heat insulating material and an anti-radiation material.

About China Carbon Graphite Group, Inc.

China Carbon Graphite Group, through its affiliate, Xingyong Carbon Co., Ltd., manufactures graphite and carbon and graphite based products in China. The company is the largest wholesale supplier of fine-grain and high-purity graphite in China and one of the nation's top overall producers of carbon and graphite products. Fine grain graphite is widely used in smelting for colored metals and rare-earth metal smelting as well as the manufacture of molds. High purity graphite is used in metallurgy, mechanical industry, aviation, electronic, atomic energy, chemical industry, food industry and a variety of other fields. In September 2007, the company was approved and designated by the Ministry of Science & Technology as a "National Hi-tech Enterprise." Of the more than 400 carbon graphite producers in China, China Carbon is the only non-state-owned company to receive this honor. For more information, visit www.chinacarboninc.com.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors.

CONTACT: Nuwa Group, LLC
         Investor Contact:
         Mr. Kevin Fickle

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