CHANGGE CITY, China, Nov. 7 /Xinhua-PRNewswire-FirstCall/ -- Zhongpin Inc. (Nasdaq: HOGS) ("Zhongpin" or "the Company"), a leading meat and food processing company in the People's Republic of China ("PRC"), today announced that the Company has commenced production at its new prepared meat facility in Changge City, Henan Province and has increased annual production capacity for prepared meat products by 114%.
Zhongpin began construction of the new prepared meat facility in the first quarter of 2008 with an investment of approximately $13.2 million. The new facility is located at the Company's main production base, Zhongpin Industrial Park, and has annual prepared meat-production capacity of 28,800 metric tons. The new facility will increase Zhongpin's total annual prepared meat production capacity to 54,000 metric tons from the current 25,200 metric tons. The Company's prepared meat products include a variety of popular sausages and ham. Traditionally, prepared meat facilities have longer ramp-up periods compared to the frozen and chilled pork facilities. Zhongpin expects the new facility to achieve an over 80% utilization rate by the second quarter of 2009.
"Zhongpin's prepared meat products have enjoyed heightened brand awareness among consumers due to their superior taste and quality. We believe the additional production capacity will increase the contribution of prepared meat products to our product mix and have a positive impact on our profitability as these products have a higher gross margin compared to the other product categories," commented Mr. Xianfu Zhu, CEO of Zhongpin Inc. "The new facility is located in our industrial park and will be able to take complete advantage of our existing advanced logistics and distribution system. In addition, Henan and other provinces in greater Central China account for one third of China's population and we believe there is great demand for high quality prepared pork products from consumers and wholesale clients."
About Zhongpin
Zhongpin is a meat and food processing company that specializes in pork and pork products, and fruits and vegetables, in the PRC. Its distribution network in the PRC spans more than 24 provinces and includes over 2,960 retail outlets. Zhongpin's export markets include the European Union, Eastern Europe, Russia, Hong Kong, Japan and South Korea. For more information, contact CCG Investor Relations directly or go to Zhongpin's website at http://www.zpfood.com .
Safe Harbor Statement
Certain statements in this press release and oral statements made by Zhongpin on its conference call in relation to this release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the Company for growth, the Company's planned manufacturing capacity expansion in 2008 and predictions relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs, but these projections also 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, unanticipated changes in product demand, interruptions in the supply of live pigs/raw pork, downturns in the Chinese economy, delivery delays, freezer facility malfunctions, poor performance of the retail distribution network, changes in applicable regulations, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.
For further information, please contact:
CCG Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
Zhongpin Inc.
Warren Wang, Chief Financial Officer
Tel: +86-10-82861788
Email: ir@zhongpin.com
Web: http://www.zpfood.com
