PINGDINGSHAN, China, April 25, 2016 /PRNewswire/ -- Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that it has signed a new contract with one of the 13 administrative offices of the Zhengzhou City Airport Zone (Zhengzhou Comprehensive Experimental Zone for Airport-based Economy), to provide construction waste management (CWM) services for over 1,000 homesteads to be demolished in the Wangzhuang and Wangdao villages.
The contract requires the Company to complete processing the construction waste within 6 months which, when completed, is expected to generate approximately $600,000 in revenue with a gross margin of over 70%. To service the contract, Yulong is currently using 3 mobile recycling stations, each with an annual designed processing capacity of two million metric tons. The Company may deploy additional stations in the area, as new assignments are received.
To date, the Company has signed contracts with five out of 13 administrative offices in the zone, and is negotiating with the other administrative offices. As a result, the Company is processing waste from approximately 3,300 demolished homesteads and expects to report strong fiscal 2016 third quarter revenue for its CWM segment.
As previously announced, over 20,000 homesteads were demolished in 2015 in the airport zone, and it is estimated that around 12,000 homesteads will be demolished every year for the next 3 years.
Yulong Zhu, the Company's Chief Executive Officer, noted, "We commenced CWM services one year ago and today this segment has become a major contributor of revenue for our Company. We believe that once our technical code is published by Henan's Department of Transportation, we will generate additional high margin revenue from the sale of recycled materials and further improve our bottom line. Thus, we plan to increase our waste processing capacity by purchasing additional mobile recycling stations to handle additional projects we expects to receive in the near future."
Mr. Yulong continued, "Our success is a demonstration of our sound business growth strategy to expand our activities in new geographies where we see that CWM services are needed. We are very proud of our achievements over the last year. We will continue our efforts to strengthen our existing and also develop new strategic partnerships to expand our business in other cities in our province."
About Yulong Eco-Materials
Yulong is a vertically integrated manufacturer of eco-friendly building products and a construction waste management company located in the city of Pingdingshan in Henan Province, China. The Company is currently Pingdingshan's leading producer of fly-ash bricks and concrete as well as the exclusive provider of construction waste management services for the cities of Pingdingshan and Shangqiu.
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SOURCE Yulong Eco-Materials