Synutra Announces Long-Term Partnership Agreement with Sodiaal, the Leading Dairy Cooperative in France, and the Building of a New Drying Facility in France
QINGDAO, China and ROCKVILLE, Md., Sept. 18, 2012 /PRNewswire/ -- Synutra International, Inc. (NASDAQ: SYUT), a leading infant formula company in China and a producer, marketer and seller of nutritional products for infants, children and adults, today announced the signing of a long-term industrial and commercial partnership agreement with Sodiaal, the leading dairy cooperative in France, and its subsidiary, Euroserum, the world leader in demineralized whey powders.
Under this partnership agreement, Synutra will build a new drying facility in Carhaix, France (located in the Brittany region), intended to manufacture powdered milk and fat-enriched demineralized whey for the needs of the Synutra group. Located in the heart of the central Brittany milk-collection basin, this new drying facility will meet the strictest European quality and hygiene standards and will be capable of producing 60,000 tons of powder per year initially, with a designed capacity of up to 100,000 tons annually.
Synutra anticipates spending approximately 90 million euros ($118 million) to build and operate this drying facility with the majority of funding for this project expected to come from PRC bank loans. The operational commissioning of the drying facility is expected to take place by year-end 2014, subject to full PRC government approval and, once completed, is expected to employ approximately 75-100 employees. Upon commissioning of the drying facility, Euroserum and Sodiaal will supply the facility with demineralized liquid whey and milk.
This agreement and the construction of the drying facility in Carhaix remains subject to the approvals of the government of the People's Republic of China, granted by (i) the National Development and Reform Commission, (ii) the Ministry of Commerce and (iii) the State Administration of Foreign Exchange (SAFE).
Mr. Liang Zhang, Chairman and CEO of Synutra said, "We are very pleased with this industrial and commercial partnership with Sodiaal and Euroserum. This opportunity allows Synutra to secure its long-term supply of high quality raw materials and fuel Synutra's future growth while maintaining the highest quality standard for our products. We are confident this collaborative effort can further increase consumer confidence and trust in our premium nutritional products."
Mr. Francois Iches, Chairman of Sodiaal said, "We are delighted with this long term partnership agreement with Synutra and its investment of a new drying facility in the Brittany region. This commitment is a strong signal for Sodiaal and our farmers of the long-term commercial relationship between the two groups."
About Synutra International, Inc.
Synutra International, Inc. (Nasdaq: SYUT) is a leading infant formula company in China. It principally produces, markets and sells its products through its operating subsidiaries under the "Shengyuan" or "Synutra" name, together with other complementary brands. It focuses on selling premium infant formula products, which are supplemented by more affordable infant formulas targeting the mass market as well as other nutritional products and ingredients. It sells its products through an extensive nationwide sales and distribution network covering all provinces and provincial-level municipalities in mainland China. As of June 30, 2012, this network comprised over 650 independent distributors and over 800 independent sub-distributors who sell Synutra products in over 66,000 retail outlets.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations, assumptions, estimates and projections about Synutra International, Inc. and its industry. All statements other than statements of historical fact in this release are forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "is/are likely to," "may," "plan," "should," "will," "aim," "potential," "continue," or other similar expressions. The forward-looking statements included in this press release relate to, among others, Synutra's goals and strategies; its future business development, financial condition and results of operations; the expected growth of the nutritional products and infant formula markets in China; market acceptance of Synutra's products; the safety and quality of Synutra's products; Synutra's expectations regarding demand for its products; Synutra's ability to stay abreast of market trends and technological advances; competition in the infant formula industry in China; PRC governmental policies and regulations relating to the nutritional products and infant formula industries, and general economic and business conditions in China. These forward-looking statements involve various risks and uncertainties. Although Synutra believes that the expectations expressed in these forward-looking statements are reasonable, these expectations may turn out to be incorrect. Synutra's actual results could be materially different from the expectations. Important risks and factors that could cause actual results to be materially different from expectations are generally set forth in Synutra's filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release. Synutra International, Inc. undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SOURCE Synutra International, Inc.