SHENZHEN, China, June 8 /Xinhua-PRNewswire/ -- China Ritar Power
Corp. (Ritar) (OTC Bulletin Board: CRTP.OB) today announced that it will be
expanding its manufacturing capabilities for the production of lead plates, a
major component of lead acid batteries, Ritar's main product.
In April, Ritar entered into an agreement with the Administrative
Committee of Songmu Industrial Park, Henyang City, Hunan Province, to purchase
land use rights for approximately 266,667 square meters of land at a cost of
$9.35 per square meter, for the purpose of building a manufacturing facility
for lead acid battery plates. The project is expected to proceed in three
phases, extended over a four-year period, which began this past April.
Although the agreement requires investments in an aggregate estimated amount
of $103 million over a four-year term, the first phase, now underway, will
require only approximately $15.7 million in funding. Ritar has already
invested $2.5 million under the agreement on April 20, 2007. Ritar intends to
finance the remaining portion of the cash necessary for the project through a
combination of its own internally generated cash and bank financing.
According to Ritar, the timing of the next two phases of the project will
depend on market demand, the price of lead and the availability of capital.
Ritar intends to reach a point where capacity ultimately could be as high as
85,000 metric tons of lead acid battery plates with an annual output value
projected to be over $300 million. The four-year project term is a non-binding
timeline and no penalties will be imposed on Ritar if it fails to make the
investments required by the agreement within this timeframe. Ritar expects
that once the facility becomes operational, which is expected to be in October
2007, the initial rated capacity will be at least 21,600 metric tons of lead
acid battery plates annually.
According to President and CEO Jiada Hu, "This is a great opportunity to
allow Ritar to measurably lower operating costs by backward integration, while
freeing us from dependency on suppliers of a product that historically has
been 60% to 70% of our cost of goods. We believe this move to be an important
step in helping us to maintain our competitive edge."
About China Ritar Power Corp.
Ritar designs, develops, manufactures and markets environmentally friendly
lead-acid batteries with a wide range of applications and capacities, and has
a strong presence in the light electrical vehicle (LEV) segment world wide,
with high concentration in that product category throughout China. Ritar
sells, markets and services 6 series and 197 models of Ritar-branded, cadmium-
free valve-regulated lead-acid or VRLA batteries. In addition the company
offers a range of batteries for varying applications including uninterrupted
powers source (UPS) devices and equipment used in the harvest of solar and
wind energy.
FORWARD LOOKING STATEMENTS
This release contains certain "forward-looking statements" relating to the
business of Ritar and its subsidiary companies, which can be identified by the
use of forward-looking terminology such as "believes, expects" or similar
expressions. Such forward looking statements involve known and unknown risks
and uncertainties, including all business uncertainties relating to product
development, marketing, concentration in a single customer, raw material
costs, market acceptance, future capital requirements, competition in general
and other factors that may cause actual results to be materially different
from those described herein as anticipated, believed, estimated or expected.
Certain of these risks and uncertainties are or will be described in greater
detail in our filings with the Securities and Exchange Commission. Ritar is
under no obligation to (and expressly disclaims any such obligation to) update
or alter its forward looking statements whether as a result of new
information, future events or otherwise.
Contact: Mr. Sheldon Saidman
(719-548-9963)
