Gulf Resources (GFRE) Announces the Completion of Upgrades to its Pesticide Additive Production Line

NEW YORK & SHANDONG, China, Dec. 29 /PRNewswire-Asia-FirstCall/ — Gulf Resources, Inc. (Nasdaq: GFRE) (“Gulf Resources” or the “Company”), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced that the Company completed upgrades to its chemical production line focused on producing pesticide additives.

The updated production line is expected to increase the production capacity of pesticide additives from 1,800 metric tons to 3,000 metric tons annually and improve the quality of the pesticide additives.

“The pesticide industry has been growing at a phenomenal pace in China and with the ongoing domestic upgrades in raw materials, human capital and production techniques, we believe that China will be the global leader in the industry going forward.” said Mr. Xiaobin Liu, Chief Executive Officer of Gulf Resources. “Driven by the fast-growth of domestic and international pesticide markets, we believe that the demand for pesticide additives will continue its rapid growth. Gulf Resources strives to produce high quality pesticide additives that will meet the demands of our customers. The timely completion of the production line will enhance our top and bottom lines for 2010. We are pleased that we have received positive feedback from our current customers about the quality of the pesticide additives produced by the upgraded production line.”

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited (“SCHC”) and Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”). The Company believes that it is one of the largest producers of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil & gas field explorations and as papermaking chemical agents. For more information about the Company, please visit http://www.gulfresourcesinc.cn .

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company’s reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.