Contracts Have a Combined Value of $12.4 Million for the first 12 months
ZHEJIANG, China, June 3, 2011, /PRNewswire-Asia/ -- Lizhan Environmental Corporation ("Lizhan" or the "Company") (Nasdaq: LZEN), one of China's leading manufacturers of eco-friendly fabrics made from patented technologies, today announced two separate orders totaling $12.4 million from two new international furniture customers. Lizhan expects to deliver approximately 915,000 meters of Evergreen Products over the next twelve months.
Chairman and Chief Executive Officer Jianfeng Liu said, "We are delighted to have secured orders from two leading international customers, who provide penetration in new important markets and will generate revenue starting in the 3rd quarter. Novatex and Beijing Hengxin Kaibo Textile Co. Ltd. placed orders after conducting extensive quality testing, validating the high quality and compelling value that our Evergreen Products offer."
Lizhan signed a one-year agreement with Novatex S.p.A. ("Novatex") for delivery of approximately 495,000 meters of Evergreen Products. Novatex is a leading manufacturer and distributor of textiles based in Forli, Italy. Lizhan's custom recycled fabrics will be utilized by Novatex to produce sofa and home furnishing products. Novatex obtained the exclusive rights to distribute Evergreen Products in Turkey and the European Union, excluding Poland and Denmark.
The Company also signed a two-year agreement with Beijing Hengxin Kaibo Textile Co. Ltd. ("Hengxin Kaibo"), which includes approximately 420,000 meters of its Evergreen Products for the first year. Hengxin Kaibao paid a $255,000 deposit for its first order and obtained the exclusive right to distribute Evergreen Products in Russia and 10 surrounding countries.
Lizhan's Evergreen Products met the quality of genuine leather products after extensive testing by an independent testing firm in Italy, the Daedalus Company ("Dedalo"). Dedalo specializes in analyzing the chemical and physical qualities of a wide variety of products and materials, including leather and textiles. Dedalo conducted these tests at the request of Novatex.
To support enhanced production capacity and meet governmental regulations, the Company announced that it has completed installation of the water treatment equipment for Line 1 at its Evergreen Products manufacturing facility. The new production line will be capable of manufacturing approximately 3,000 meters per day initially, gradually ramping to 5,000 meters per day over the next several months. Using customized equipment imported from the U.S., the new Evergreen Product facility will be able to manufacture high-grade recycled leather.
Mr. Liu continued, "After several months of rigorous testing, our first Evergreen Products manufacturing line has started volume production. Using our patented production technology, we truly believe we have developed a unique, environmentally friendly recycled leather product that can meet our clients' quality demands while being utilized in a wide variety of applications. These orders confirm our ability to secure sizeable orders with significant customers. In addition, we are in active discussions with several prospective domestic and international customers and expect additional orders to be forthcoming."
About Lizhan Environmental Corporation
Lizhan Environmental Corporation is one of China's leading manufacturers of eco-friendly fabrics whose products are developed with patented technology that regenerates collagen fiber from leftover cuttings, pieces and trimmings of genuine leather. The Company's products are mainly used in furniture, garments and other consumer applications.
Safe Harbor Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the Securities and Exchange Commission, including the Company's registration statement on Form F-1, as amended. Some of risks inherent in an investment in our company include, but are not limited to, our limited operation history, our need to maintain sufficient levels of liquidity and working capitals, the potential need to reduce our expansion plans, price inflation in the PRC, difficulties in developing and selling our new Evergreen Products, seasonal patterns in our business, protection of our intellectual property and the risk of infringing the intellectual property of others, customer decisions to discontinue purchasing our products, and restrictions imposed by Chinese regulations, including every policies. All information provided in this press release is as of February 1 2011. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
