BEIJING and CHANGGE, China, Dec. 16, 2011 /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, announced today that trial production at its two newest chilled and frozen pork products plants, in Jiangsu and Jilin provinces, began on December 16, 2011.
Located in Taizhou, Jiangsu province, Zhongpin began trial production for phase 1 of its new production plant for chilled and frozen pork on December 16, 2011.
The annual production capacity for the Jiangsu phase 1 plant will be about 80,000 metric tons for chilled and easy-to-cook pork products and 20,000 metric tons for frozen pork.
Zhongpin is investing about $63.0 million to build the Jiangsu production facility, warehouse, and distribution center. Construction began in September 2010. Phase 2, a production facility for prepared pork products with an annual capacity of about 30,000 metric tons, is expected to open in the third quarter of 2012.
Located in Changchun, Jilin province, Zhongpin also began trial production for phase 1 of a new plant for chilled and frozen pork on December 16, 2011. The annual production capacity for the Jilin phase 1 plant will be about 70,000 metric tons for chilled pork and 25,000 metric tons for frozen pork.
Zhongpin is investing about $61.5 million to build a slaughtering and processing plant, low temperature prepared pork plant, logistics center, and research and development center in Jilin. Construction began in September 2010. Phase 2 in Jilin will include an annual production capacity for about 30,000 metric tons for prepared pork products, plus a research and development center, which are expected to open in the third quarter of 2012.
At the same time, the plant for chilled and frozen pork with a capacity of 30,000 metric tons, leased by Zhongpin in Gongzhuling, Jilin province, will cease operations. This facility has been leased by Zhongpin on a three year contract since December 2008.
As of September 30, 2011, Zhongpin had an annual capacity of 563,760 metric tons for chilled and frozen pork, 126,000 tons for prepared pork products, 20,000 tons for pork oil, and 30,000 tons for vegetables and fruits, for a total annual capacity of 739,760 metric tons.
With the addition of the two phase 1 plants on December 16, Zhongpin will have an annual capacity of 728,760 metric tons for chilled and frozen pork, 126,000 tons for prepared pork products, 20,000 tons for pork oil, and 30,000 tons for vegetables and fruits, for a total annual capacity of 904,760 metric tons.
Mr. Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin Inc., said, "With our two newest plants for chilled and frozen pork opening on December 16, we will have increased our annual capacity for chilled and frozen pork by 29.3% and our total annual production capacity for all products by 26.4%.
"As with our other recent expansions, we already sell into those markets from our existing facilities, so we have good market acceptance and growth potential in both the Jilin province in northeast China and in the Jiangsu province in southeast China near Shanghai.
"Given our good market acceptance, plus our cold-chain distribution system that already serves those markets, we expect a rapid increase in volume for both plants, because their openings are timed to capture a good share of the peak pork season during the Chinese Lunar New Year and Spring Festival that runs from the new moon on January 23 through the full moon on February 8, 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 3,419 retail outlets as of September 30, 2011. Zhongpin's export markets include Europe, Hong Kong, and other countries in 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 may be 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, the effects of weather on hog feed production, 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) Director of Investor Relations
Telephone +86 10 8286 1788 extension 101 in Beijing
Mr. Warren (Feng) Wang (English and Chinese) Chief Financial Officer
Telephone +86 10 8286 1788 in Beijing
Mr. Yujia (Julian) Zhao (English and Chinese)
Telephone +86 10 5826 4727 in Beijing
Mr. Tom Myers (English)
Mobile +86 139 1141 3520 in Beijing
SOURCE Zhongpin Inc.