-- Biodiesel production supports the government's implementation of the
Clean Production Promotion Act and the 2007 Renewable/Alternative
Energy Development Plan
-- Company signs letter of intent to acquire Sichuan-based Company with
50,000 tons of biodiesel production facility
-- Company on schedule with construction of the new 50,000 ton biodiesel
production facility due to come on line in Q4 2010
XI'AN, China, July 7 /PRNewswire-Asia/ -- China Integrated Energy, Inc. (Nasdaq: CBEH) ("China Integrated Energy" or the "Company"), a leading non-state-owned integrated energy company in China, today announced that it is progressing on its goal of doubling its biodiesel production capacity to 200,000 metric tons (MT) in 2010 through both internal expansion and an acquisition.
As previously disclosed, the Company has continued to actively evaluate acquisition opportunities to increase its biodiesel production capabilities, the most profitable segment of its business. Toward that goal, China Integrated Energy, Inc. recently signed a non-binding letter of intent (LOI) to acquire a Sichuan-based company with 50,000 MT of capacity. The feedstock for this facility is mainly waste cooking oil and vegetable oil residue and yields profit margins the Company believes are similar to the current biodiesel production of China Integrated Energy, Inc. The acquisition cost is estimated at $16.5 million and has an expected payback of less than two years. The Company is completing negotiations and due diligence, and expects to complete the transaction by the end of the third quarter. The LOI is non-binding and there are risks this transaction will not occur.
China Integrated Energy Inc. also continues on plan with the construction of its new 50,000 ton biodiesel production facility in Tongchuan City, Shaanxi Province. The new facility is adjacent to the Company's existing 100,000 ton biodiesel production facility. Equipment installation is expected to be completed by the third quarter of 2010, with production commencing in the fourth quarter. The facility is expected to be operating at 60-70% of capacity in the first quarter of 2011, ramping to a 80-90% utilization rate in the second quarter of 2011. For the full-year 2011, the new facility is expected to contribute approximately $27 million in revenue and $9 million in net income.
"To respond to our government's focus on environmental preservation and reduction in China's dependency on crude oil imports, China Integrated Energy plans to continue expanding its biodiesel production capabilities both organically and through acquisitions," stated Mr. Gao Xincheng, the Company's chairman and CEO. "With a large distribution footprint, established customer base and growing market demand, we believe an increase in our biodiesel production capabilities will yield further improvements in profit margins and cash flow."
The Chinese central government continues to focus the implementation of the Clean Production Promotion Act. The Act, which was adopted by the PRC's National People's Congress and went into effect as of January 1, 2003, requires industries to use clean energy, green raw materials, advanced technologies to reduce environmental pollution, and increase efficiency of resource utilization. The government has aggressively implemented enforcement of the Clean Production Act to improve environmental protection and effectiveness of consumption of resources. Also, under the Mid-term Renewable/Alternative Energy Development Plan promulgated August 2007, China central government established a goal that by year 2020, 15% of energy consumed will be required to come from renewable/alternative energy sources to reinforce environmental preservation and reduce dependency of crude oil import from abroad. There are approximately 600 million tons of agricultural crop wastes and forestry wastes available each year that can be used to produce bio-fuel including biodiesel and ethanol. Biodiesel consumption is expected to reach approximately more than 2 million tons by 2020.
About China Integrated Energy, Inc.
China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in China engaged in three business segments: the wholesale distribution of finished oil and heavy oil products, the production and sale of biodiesel, and the operation of retail gas stations. The Company utilizes an extensive distribution network to distribute traditional petroleum produces, including finished oil and heavy oil. The Company also operates a 100,000-ton biodiesel production plant with an additional 50,000-ton biodiesel production plant under construction, and twelve retail gas stations in China. For additional information on the Company please visit http://www.chinaintegratedenergy.com .
An online investor kit including a company presentation, press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.chinaintegratedenergy.com . To subscribe to future releases via e-mail alert, visit http://www.chinaintegratedenergy.com/alerts .
Safe Harbor Statement
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For more information, please contact:
Company
Susan Zhou
Vice President, Investor Relations
Tel: +1-305-393-5536
Email: susan.zhou@cbeh.net.cn
Web: http://www.chinaintegratedenergy.com
HC International, Inc.
Ted Haberfield, Executive VP
Tel: +1-760-755-2716
Email: thaberfield@hcinternational.net
Web: http://www.hcinternational.net
