CD International Enterprises Sees Chinese Government's Recent Elimination of Magnesium Export Tax Having a Positive Impact on Sales and Gross Margins in Fiscal 2013
DEERFIELD BEACH, Fla., Jan. 9, 2013 /PRNewswire/ -- CD International Enterprises, Inc. ("CD International") (OTCQB:CDII), a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services, today announced it sees the Chinese government's elimination of the 10% magnesium export tax, effective January 1, 2013, having a positive impact on sales and gross margins for its Magnesium Segment in fiscal 2013.
The export tax, which has been in effect since 2008, was designed to discourage exports of magnesium and part of the government's overall effort to reduce pollution associated with certain types of industrial production. Over the past three years many producers have faced increasing pricing pressure from traders believed to be evading export taxes giving them the ability to undercut and drive down market prices of producers subject to the 10% tax. Management of CD International believes the elimination of this tax will level the playing field and make magnesium more profitable including sales through its IMG sales arm. With the automobile industry forecasting record global sales, magnesium products no longer subject to this tax will become more competitively priced with other materials leading to a potential for increased sales for the entire industry.
Commenting on the elimination of the magnesium export tax, Dr. James Wang, Chairman and CEO of CD International, stated, "We are pleased to see the government take action to help restore balance to the magnesium industry. Our company, as well as a number of other Chinese magnesium producers, believes we have faced unfair competition from unscrupulous traders who have avoided taxes and severely depressed gross margins for the whole industry. Prior to the implementation of this tax our margins were significantly higher and we believe there will be a return to a more normal export pricing environment as we no longer have to face potential unfair competition in the marketplace."
About CD International Enterprises, Inc.
CD International Enterprises, Inc. (OTCQB: CDII), is a U.S. based company that produces, sources, and distributes industrial commodities in China and the Americas and provides business and financial corporate consulting services. Headquartered in Deerfield Beach, Florida with corporate offices in Shanghai, CD International's unique infrastructure provides a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. For more information about CD International, please visit http://www.cdii.net.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, CD International Enterprises, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding the impact of the elimination of magnesium export taxes in China on our sales, gross margins and profits in our Magnesium segment.
We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2012.
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