BEIJING and CHANGGE, China, Dec. 13, 2010 /PRNewswire-FirstCall/ -- Zhongpin Inc. ("Zhongpin", Nasdaq: HOGS), a leading meat and food processing company in the People's Republic of China, today announced that it would build a new production, research & development, test, and training complex in its home city of Changge in Henan province of China.
The new facility will add 100,000 metric tons of capacity for prepared pork products, including Chinese-style, western-style, half-cooked, and easy-to-cook pork products. Adjacent to the production facility will be a new center for advanced research & development, test, training, and other support functions.
Mr. Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin Inc., said, "This expansion will add capacity for our higher-margin downstream products and will serve our central China market and adjacent markets. It will substantially enhance our R&D and further support our expanding market share in the growth regions of China. This new facility proves that we remain committed to doing everything possible -- using the most advanced technologies and processes -- to continue delivering new product innovations that will be desired by China's citizens, delivering food at the highest standards of product quality and safety to every customer, and delivering strong long-term returns to our shareholders."
Zhongpin plans to invest $58.5 million on the construction, excluding the land use rights that Zhongpin already owns. More than 80% of the production equipment will be internationally sourced. Zhongpin consistently selects the best and most advanced equipment, processes, and integrated information systems for its plants. The company's advanced cold-chain logistics system will support the expanding capacity. The payback period for the project is expected to be about 5.75 years.
Construction for the first phase of 50,000 metric tons for prepared pork products is scheduled to start in the first quarter 2011 and be completed by the third quarter 2011, and the second phase, also with an annual capacity of 50,000 metric tons for prepared pork products, is expected to be completed in the fourth quarter 2012. The R&D, test, and training center is also expected to open by the fourth quarter 2012.
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 China covers 20 provinces plus Beijing, Shanghai, Tianjin, and Chongqing and includes more than 3,285 retail outlets. Zhongpin's export markets include the European Union, Russia, Hong Kong, South Africa, 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, 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 information detailed in Zhongpin's filings with the United States Securities and Exchange Commission. These filings are available from www.sec.gov or from Zhongpin's website at www.zpfood.com.
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:
Mr. Sterling Song (English and Chinese)
Investor Relations Manager
Telephone +86 10 8286 1788 extension 101 in Beijing
Mr. Warren (Feng) Wang (English and Chinese)
Chief Financial Officer
Telephone +86 10 8286 1788 extension 104 in Beijing
Mr. Han Fang (English and Chinese)
Telephone +86 10 5971 2001 in Beijing
Mr. Tom Myers (English)
Mobile +86 139 1141 3520 in Beijing
Ms. Kathy Li (English and Chinese)
Telephone +1 212 618 1978
SOURCE Zhongpin Inc.