May 2009, Ritar started the construction of Phase II of Hengyang Industrial Park project, which will make Ritar lead the same lines of Valve Regulated Lead Acid Batteries in China after total completion.

Hengyang government has agreed to provide the Company a new industrial park in Hengyang which will enable Ritar to expand production capacity for lead acid batteries by more than three times current production capacity. Once the new facility is in full production, Ritar"s total annual production capacity will increase to approximately US$650 million, up from its current annual production capacity of US$200 million.

Ritar’s new industrial park is part of the Chinese government’s US$586 billion economic stimulus package launched at the end of 2008. In an effort to encourage new development in Hengyang, the Hengyang government has agreed to add a new industrial park with nine production facilities and two dormitories on 214.7 square kilometers of land next to Ritar’s current industrial park. The new industrial park is expected to be completed and ready for equipment to be installed by October 2009.

"We are extremely pleased to have the support of the Hengyang government to expand our production capacity for lead acid batteries. The new industrial park, which has a market ＆#118alue of approximately US$30 million, will enables us to increase our annual production capacity by over three times our current capacity. In addition, the new facilities, once equipped with new state-of- the-art machinery, will also be more efficient resulting in about a 3% improvement in our gross margin," commented Mr. Jiada Hu, China Ritar’s Chairman and CEO. "The completion of this agreement with the Hengyang government is extremely timely as demand for our lead acid batteries continues to grow, specifically in telecommunication, alternative energy and electric vehicle markets."