HARBIN, China, April 21 /PRNewswire-Asia-FirstCall/ -- China XD Plastics Company Ltd. ("China XD Plastics" or the "Company"), (Nasdaq: CXDC), the largest Chinese manufacturer in the development, manufacture, and distribution of modified plastics primarily for use in automotive applications in China, today announced it entered into a District Entry Agreement (the "Agreement") and a Memorandum (the "Memo") with Harbin Economic and Technological Development Zone Administration (the "Administration") to relocate its manufacturing facilities and change its address of business of record and tax registration to 9 North Dalian Road factory in the Ha Ping Road Centralized Industrial Park in the Harbin Economic and Technological Development Zone (the "Development Zone"), where the Company is currently headquartered and where 24 of the Company's 31 production lines are already located. Following the relocation of 7 of the Company's manufacturing lines to the Ha Ping Road Centralized Industrial Park, and upon the completion of the business and tax registration, the Administration will pay China XD Plastics a total of RMB 20 million as business relocation subsidies.
The relocation will occur in phases over three months and is not expected to disrupt production. Upon completion of the relocation, the Company will sell its land use rights for its original location at 9 Qinling Road in the Yinbin Road Centralized Industrial Park. The Company plan to use the proceeds from the relocation subsidies and from the sale of its land use rights and buildings of the old facility to acquire additional properties and equipment for business expansion.
"We are pleased to announce this agreement which will centralize and streamline our manufacturing operations and free up capital to pursue our growth objectives at a more appropriate location," commented by Mr. Jie Han, Chairman of the Board and CEO of China XD Plastics.
In connection with the relocation, the Company shall pay all remaining infrastructure fees of approximately RMB 1.1 to RMB 1.5 million owed for its original location at Yinbin Road Centralized Industrial Park to the Administration within ten days after the receipt of the total amount of the relocation subsidies by the Company. The amount of the infrastructure fee will be determined by the finance bureau of the Administration. Also pursuant to the Agreement, in the event the Company's total revenue for 2010 is less than RMB 1.3 billion, the Company shall return the total of RMB 20 million relocation subsidies, with RMB 5 million as interest, to the Administration. In addition, the finance bureau of the Administration has agreed to subsidize certain senior executives of the Company regarding their personal income tax during the period the Company's business and tax registration is with the Development Zone.
About China XD Plastics Company Ltd.
China XD Plastics Company Ltd., through its wholly owned subsidiary Harbin Xinda Macromolecule Material ("Xinda"), develops, manufactures, and distributes modified plastics, primarily for automotive applications. The Company's specialized plastics are used in the exterior and interior trim and in the functional components of more than 30 automobile brands manufactured in China including Audi, Red Flag, Volkswagen and Mazda. The Company's
wholly-owned research institute is dedicated to the research and development of modified plastics, and benefits from the cooperation with well-known scientists from prestigious universities in China. As of the end of December 31, 2009, 145 products that Xinda manufactured have been certified for use by one or more of the automobile manufacturers in China. For more information please visit http://www.chinaxd.net .
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company's ability to increase the number of certifications; the Company's ability to introduce new product applications for automobiles; the effectiveness, profitability, and the marketability of its products; the Company's ability to successfully expand its production capacity; the company's ability to protect its proprietary information; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov. These
forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
For more information, please contact:
China XD Plastics Company Ltd.
Mr. Taylor Zhang, CFO
Phone: +1-212-747-1118 (New York)
Mr. Allan Lao, IR Director
Phone: +86-451-84346600 (Harbin)
Email: cxdc@chinaxd.net
CCG Investor Relations Inc.
Ms. Vivian Chen, Sr. MI Executive
Phone: +1-646-701-7445 (New York)
Mr. Ed Job, CFA
Phone: +86-138-1699-7314 (Shanghai)
Email: ed.job@ccgir.com
Web: http://www.ccgirasia.com
