China Carbon Graphite Group, Inc. ("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 operations at its new facility, which includes baking and dipping plants, will commence later this month and become fully operational by September 2011.

China Carbon has already completed installations at the facility as well as testing at the baking plant. The baking plant will go online later this month and testing at the extrusion press plant will be finished by September 2011 with operations beginning shortly thereafter, according to the Company's management team. Once the facility is completely up and running, China Carbon anticipates that it will have an annual production capacity of 30,000 tons, which would double the Company's current annual production capacity. With its expansion efforts, China Carbon looks to better position itself to meet the growing demand the Company is seeing for its higher margin products.

When compared to the first quarter of 2010, the Company's sales more than doubled in the first quarter of 2011, with 80 percent of its revenues coming from sales of its higher margin products. Accordingly, China Carbon plans to primarily manufacture its higher margin products, such as Ultra high power graphite electrodes and fine grain and high purity graphite products, at its facility.

Donghai Yu, China Carbon's Chief Executive officer, commented, "We want to diversify our products' applications and enter in as many markets as possible. Right now, we feel that we have an excellent opportunity to really enrich our business by providing more of our higher margin products to some of China's fastest growing industries, including the aerospace, defense, automotive, steel and clean-tech industries."

In particular, China Carbon anticipates maintaining and enhancing its supply of large size, ultra high power graphite electrodes to Chinese steel plants. Currently, the margin for large size, ultra high power graphite electrode is high due to the shortage of supply to demand. In an effort to take advantage of this trend, the Company is striving to become China first domestic producer of 800 mm diameter ultra high power graphite electrodes.

"Our ability to produce higher margin products is one of our key competitive advantages," added Mr. Yu. "Large size carbon and graphite manufacturing requires the most sophisticated technologies but can deliver us more than a 30 percent gross profit margin. We believe that we are already China's leading manufacturer of large size carbon and graphite products, and through our capacity expansion and product development, our goal is to enhance our production of these products and gain further leverage in the market."