Zhongpin Begins to Construct New Distribution Center in Changge

USA - English

• USA - English

BEIJING and CHANGGE, China, May 19 /PRNewswire-Asia-FirstCall/ -- Zhongpin Inc. ("Zhongpin" or "the Company", Nasdaq: HOGS), a leading meat and food processing company in the People's Republic of China, today announced that it has started to construct of a new cold-chain distribution center in Changge, Henan province, China.

The new distribution center will have a 25,000 square meter multi-temperature hybrid refrigeration facility, quality assurance centers, a fresh food processing and sorting plant, and other associated operations. The center will be integrated into Zhongpin's advanced information technology system.

The new center will provide processing, storage, and distribution services, and also will serve as platform for integration of clients' resources, to provide e-commerce, quality assurance, and exhibition services for Zhongpin and other third-party clients. This new facility will be part of Zhongpin's cold-chain logistics system.

Zhongpin will spend about $16.2 million on the new center, which should be completed and begin production in December 2010. The expected payback period for the new center is 5.8 years.

Mr. Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin Inc., explained, "Combined with our other distribution centers, this new cold-chain center will strengthen our advantage as the only supplier in China that distributes 100 percent of its food by using an advanced cold-chain logistics system. With all of our distribution centers, plus our 500-plus refrigerated delivery trucks that are equipped with GPS and automatic temperature control systems, we will continue to provide chilled pork and fresh food to our customers with the highest quality and safety.

"We believe more than 70% of the capacity in the new distribution center will be used to provide services to third-party organizations, with Zhongpin using about 30% of the center's capacity. Providing these advanced logistics services to other organizations should be a new business opportunity and growth enhancer for us, and it should further strengthen our position in the market, help improve our profit margins, and help provide good returns to our shareholders."

As a leader in the industry, Zhongpin was recognized in 2009 by the Logistics Association China as a "Cold-chain Management Demonstration Company."

About Zhongpin

Zhongpin Inc. is a meat and food processing company that specializes in pork and pork products, vegetables, and fruits in China. Its distribution network in the China covers 20 provinces plus Beijing, Shanghai, Tianjin, and Chongqing and includes more than 3,000 retail outlets. Zhongpin's export markets include the European Union and Southeast Asia. For more information about Zhongpin, please visit Zhongpin's website at http://www.zpfood.com .

Safe harbor statement

Certain statements in this news release are forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Zhongpin has based its forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its business strategy, results of operations, financial condition, and financing needs.

These projections involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as downturns in the Chinese economy, unanticipated changes in product demand, any effect from the A(H1N1) virus on Zhongpin's market or sales, interruptions in the supply of live pigs and or raw pork, poor performance of the retail distribution network, delivery delays, freezer facility malfunctions, Zhongpin's ability to build and commence new production facilities according to intended timelines, the ability to prepare Zhongpin for growth, the ability to predict Zhongpin's future financial performance and financing ability, changes in regulations, and other risks detailed in Zhongpin's filings with the United States Securities and Exchange Commission.

You are urged to consider these factors carefully in evaluating Zhongpin's forward-looking statements and are cautioned not to place undue reliance on those forward-looking statements, which are qualified in their entirety by this cautionary statement. All information provided in this news release is as of the date of this release. Zhongpin does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

    For more information, please contact:

    Zhongpin Inc.
     Mr. Sterling Song (English and Chinese)
     Investor Relations Manager
     Tel:    +86-10-8286-1788 x101 in Beijing
     Email:  [email protected]

     Mr. Warren (Feng) Wang (English and Chinese)
     Chief Financial Officer
     Tel:    +86-10-8286-1788 x104 in Beijing
     Email:  [email protected]

    Christensen
     Mr. Yuanyuan Chen (English and Chinese)
     Tel:    +86-10-5971-2001 in Beijing
     Mobile: +86-139-2337-7882 in Beijing
     Email:  [email protected]

     Mr. Tom Myers (English)
     Mobile  +86-139-1141-3520 in Beijing
     Email:  [email protected]

     Ms. Kathy Li (English and Chinese)
     Tel:    +1-212-618-1978
     Email:  [email protected]

SOURCE Zhongpin Inc.