China Zenith Chemical Group Limited (HKG:0362) expected to record a substantial loss for the six months ended 31 December 2011 as compared to the profit recorded for the same period in 2010.

The estimated loss is mainly due to the suspension of the production of the coal-related chemical products in the aftermath of an industrial accident which occurred in the calcium carbide production facilities of Mudanjiang Daytech Chemical Limited, a wholly owned subsidiary of the Company, in the morning of 30 May 2011. No production activities for coal-related chemical products will be recorded in the financial period under.

Moreover, the increase in the cost of repairs and maintenance for all production facilities to further enhance work safety will be recorded in the current financial period. Further impairment of goodwill on vitamin C, glucose and starch businesses will also be recognized in the current financial period.