full factory production commence this week, page-6

IMH has announced the completion of the Phoslock manufacturing facility in Kunming,
China, with commissioning underway. Full production (24 hrs 7 days a week) will commence on 25/6/04. The first container shipment of 20 tonnes to an Australian water authority is expected shortly thereafter, to be followed by further shipments to Australia, NZ & within China.

The take up of Phoslock has been delayed as clients have preferred to wait for the granulated product, rather than the slurry. I expect production of all granulated Phoslock to in China, reducing supply costs, increasing potential contribution to IMH & lessening the need for licensee in each country/area

With strong interest globally & an increasing enquiry rate, as a result of existing problems & increasing legislative & regulatory requirements,I expect sales to increase significantly. With a low fixed cost base. IMH is heavily leveraged to expanding sales levels.