Major Customers

3 Months Ended

Jun. 30, 2011

Major Customers

Major Customers

NOTE 7.   MAJOR CUSTOMERS

On September 1, 2003, the Company signed an exclusive 17-year agreement with Harbin Municipal Urban Administrative Bureau (“HMUAB”) to dispose of approximately one-third of the city’s solid waste disposal. The contract will expire on August 30, 2020. The revenue from HMUAB accounted for 38% of the gross revenue for the six months ended June 30, 2011 and 34% of the gross revenue for the six months ended June 30, 2010.

In January 2010, the Company signed a PET bottle processing agreement and a consignment sales agreement with Harbin Dongxin Group (“Dongxin”). The contract was renewed in August 2011.  In accordance with the agreements, Dongxin shall be responsible for processing, packaging and selling the PET bottles sorted from the landfill or purchased by the Company. The Company shall pay a processing fee to Dongxin in return. Dongxin sells the processed PET bottles at an agreed price.  The Company fixes a minimum resale price, which Harbin Dongxin Group must collect and remit to the Company upon sale of the recycled PET.  Harbin Dongxin Group is entitled to retain any revenue it obtains from the resale in excess of the fixed minimum price.

In March 2010, the Company signed a plastic bottle cap processing and consignment sales agreements with Harbin Bin County Welfare Plastic Products Co., Ltd (“HBC”). The contract was renewed in August 2011.  In accordance with the agreements, HBC will be responsible for processing the plastic bottle caps sorted from the landfill. The Company will pay a processing fee to HBC in return. The processed plastic granules will be sold by HBC at an agreed price.  The Company fixes a minimum resale price, which HBC must collect and remit to us upon sale of the granules.  HBC is entitled to retain any revenue it obtains from the resale in excess of the fixed minimum price.

The following table presents sales from major customers with individual sales over 10% of total net revenue.

	Three months ended June 30,
	2011					2010
	Sales		% of Total Sales			Sales		% of Total Sales
HMUAB	$	1,264,354		62	%	$	1,186,829		23	%
Dongxin		473,033		23	%		3,351,000		64	%
HBC		287,332		14	%		705,923		13	%
Total	$	2,024,719		100	%	$	5,243,752		100	%

	Six months ended June 30,
	2011					2010
			% of					% of
	Sales		Total Sales			Sales		Total Sales
HMUAB	$	2,497,369		38	%	$	2,309,528		34	%
Dongxin		3,563,777		54	%		3,816,055		56	%
HBC		501,197		8	%		705,923		10	%
	$	6,562,343		100	%	$	6,831,506		100	%

 Accounts receivable related to HMUAB, Dongxin and HBC are as follows:

	June 30, 2011					December 31, 2010
	Accounts		% of Accounts			Accounts		% of Accounts
	Receivables		Receivables			Receivables		Receivables
HMUAB	$	1,271,271		63	%	$	1,246,873		23	%
Dongxin		468,964		23	%		3,930,912		72	%
HBC		291,490		14	%		267,633		5	%
Total	$	2,031,725		100	%	$	5,445,418		100	%