Citywide Energy-Saving LED Lighting Project

Diguang International Development Co., Ltd., an emerging, China-based leader in CCFL and LED backlights and LED general lighting technology, today announced launch of a citywide LED lighting project in Xiangfan, Hubei Province, a city of 6.5 million.

Pursuant to a cooperation agreement that the Company has signed with the Xiangfan Municipal Government, Hubei Province, Diguang will apply its LED lighting technologies to road and scenic lights and lighting for government departments, schools, hospitals and commercial buildings throughout Xiangfan. The pilot phase is a 6,000-square-meter technology zone.

To launch the project, the agreement was signed by Mr. Li Hongzhong, the governor of Hubei Province, Mr. Tang Liangzhi, the mayor of Xiangfan City, and Mr. Li Xinhua, the Secretary to the Xiangfan Municipal Party Committee, on behalf of their respective government entities, while Mr. Song Yi, Chairman and CEO, represented Diguang International.

The agreement involves adapting Diguang's LED general lighting technology for a model project to achieve energy savings in lighting 6,000 square meters in Xiangfan, the second largest city in Hubei province after Wuhan. In addition to the benefit of energy savings, LED lamps offer environmental advantages over current conventional general lighting technologies because they do not use toxic mercury.

In fact, plans in Xiangfan are only part of many LED-focused initiatives underway in China. In June, 2003, the Ministry of Science and Technology launched the "National LED Lighting Project," which anticipates achieving energy savings totaling RMB 260 billion (approximately US$37 billion) by 2015.

''This LED general lighting model project has the potential to lead to direct cooperation between Diguang and numerous government departments,'' commented Diguang's CEO, Song Yi. ''The agreement not only fully reflects the Chinese National government's commitment to 'Energy Conservation, Reduction in Emissions of the Greenhouse Effect and Environment Protection,' but also expresses its confidence in Diguang's leadership in LED lighting technology. It is among our key corporate goals to achieve market expansion in LED general lighting, and direct agreements with government authorities can both speed our growth in LED technologies and also potentially yield much greater profit margins than commercial sales.''

''We are committed to promoting the environmental and energy-saving advantages of LED technology, and significant, long-term research and development has qualified us to sign this agreement,'' Mr. Song concluded. ''So we are very pleased to achieve this milestone in our general lighting growth initiative.''

As noted in a recent China Economic Net article by Huang Xin, China's government has announced financial subsidies to promote 50 million energy- saving lamps nationwide annually. Large users such as schools and hospitals will receive a 30 percent subsidy for each energy-saving lamp purchased. Under the government's 11th 5-year plan, which calls for replacement of conventional lighting with 150 million energy-saving lamps, savings would total as much as 29 billion kilowatt hours of electric power, and emissions of the greenhouse gas carbon dioxide would be reduced by 29 million tons. According to current estimates, general lighting consumes 15 percent to 20 percent of global electricity consumption at a time of rising prices for oil and gas and increasing use of -- and prices for -- energy overall. The technology known as LED, an acronym for light-emitting diode, is a solid-state, cold light source that features low working voltage, low energy consumption, high light-emitting efficiency and a long life span. Compared with an incandescent lamp (the most conventional household lighting technology at present), an LED lamp can save up to 80 percent of the electricity consumed, and 50 percent savings compared with a fluorescent lamp. Where the usual lifespan of an incandescent light bulb is 1,000 to 2,000 hours, LED lamps can, in theory, last over 100,000 hours.

As noted in the China Economic Net article, the worldwide market for LED applications, which also include indicator lights for various electronic devices and backlights powering LCD panels on products ranging in size from wristwatches to giant-screen televisions, has grown at an annual average of more than 41%, from US$12.5 billion in 2004 to $50 billion in 2008. The use of LED lighting in the upcoming 2008 Olympics is expected to give the technology significant new prominence.

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