China Nutrifruit Announces Delay in Fruit and Vegetable Powder Production Schedule, Reaffirms Fiscal 2011 Guidance

DAQING, China, Jan. 18, 2011 /PRNewswire-Asia-FirstCall/ -- China Nutrifruit Group Limited (NYSE Amex: CNGL) ("China Nutrifruit" or "the Company"), a leading producer of premium specialty fruit based products in China ("PRC"), today announced that due to difficult weather conditions in Daqing, the Company has decided to delay the final equipment installation phase of its new fruit and vegetable powder production facility until March 2011.

China Nutrifruit announced earlier that the Company expects to complete construction of its new fruit and vegetable powder facility and commence production in January 2011. However, weather conditions in Daqing continued to remain challenging in December 2010, with average temperatures falling 10 degrees lower than the same period in recent years. The Company's management team has decided to delay the final phase of equipment installation to ensure worker safety and avoid any injuries. The Company expects to resume the equipment installation progress in March 2011 and expects to commence trial production in June 2011.

Despite the delay in commencing production of its fruit and vegetable powder products, management expects that such delay will not materially affect its 2011 fiscal year financial results. The Company expects higher average selling prices of its products and increased production of the new glazed fruit products, including seabuckthorn and blackcurrant, to offset the loss in revenue and net income from the new fruit and vegetable powder line for fiscal year 2011. The Company also reaffirms its financial guidance for fiscal year 2011 for revenue in the range of $90-$95 million and net income of $22-$23 million.

"We are experiencing unusually cold weather in Daqing, which presents a challenge for our workers. The fruit and vegetable powder facility consists of a spray-tower which is approximately 60 meters in height and equipment installation at such height is adversely affected by extreme cold conditions. Worker safety is of primary importance to us and is also in the best interest of the Company. Therefore, we made a decision to temporarily discontinue equipment installation progress until March 2011," commented Mr. Changjun Yu, Chairman of China Nutrifruit. "In fiscal year 2011, we benefited from increased average selling prices of our products and positive market demand for our new seabuckthorn and blackcurrant glazed fruit products introduced in September 2010. We believe these positive developments will enable us to meet our financial guidance. We also continue to hold a positive market outlook for our fruit and vegetable powder segment, which is expected to drive our revenue growth and profitability to the next level in fiscal year 2012."

About China Nutrifruit Group Limited

Through its subsidiary Daqing Longheda Food Company Limited, China Nutrifruit, is engaged in developing, processing, marketing and distributing a variety of food products processed primarily from premium specialty fruits grown in Northeast China, including golden berry, crab apple, blueberry, seabuckthorn, blackcurrant and raspberry. The Company's processing facility possesses ISO9001 and HACCP series qualifications. Currently, the Company has established an extensive nationwide sales and distribution network throughout 17 provinces in China. For more information, please visit http://www.chinanutrifruit.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act""). Such statements include, among others, those concerning the estimated installation and production schedule of our new fruit and vegetable powder manufacturing facility and its impact on our financial results, our expected financial performance in FY2011 and strategic and operational plans, our expectations regarding sales prices of our products and production of our new glazed fruit products, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results of the Company to differ materially from those anticipated, expressed or implied in the forward-looking statements. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those anticipated include risks related to new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China; any statements of belief or intention; any of the factors mentioned in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended March 31, 2010, and other risks and uncertainties mentioned in our other reports filed with the Securities and Exchange Commission. The Company assumes no obligation and does not intend to update any forward-looking statements, except as required by law.

SOURCE China Nutrifruit Group Limited