TIANJIN, China, March 31 /PRNewswire-Asia/ -- Shengkai Innovations, Inc. (OTC Bulletin Board: SKII) (“Shengkai” or the “Company”), a leading industrial ceramic valve supplier in the People’s Republic of China (“PRC”), today announced it began construction of a new ceramic valves manufacturing facility in mid-March. When the new facility is operational, the Company will reach an annual production capacity of 24,000 sets of ceramic valves, up from the current production of 10,000 sets. The Company’s management expects the new facility to be operational by the end of calendar year 2009 and to reach full utilization in June 2010.
The construction involves approximately 43,000 square meters, or 10.6 acres, of land located in Bin Hai New Area of Tianjin, about 20 km, or 12.4 miles, from the Company’s existing manufacturing facility. The new facility is expected to include a ceramics manufacturing facility, a ceramics testing facility, a machining facility, a valve assembly facility, and a valve testing facility.
The Company expects capital expenditures for the capacity expansion to total between $27 million and $30 million, of which, the Company has so far capitalized approximately $2 million on land use rights. Of the remaining capital expenditure budget, the Company expects to use approximately an additional $2 million on land ancillary facilities, $11 million on equipment, and $12 million to $15 million on construction. The Company raised a total of $20 million from two private placements in June and July 2008 and does not, as of today, foresee the need for any additional financing to complete the planned expansion of its manufacturing capacity. As a result of the expansion, Shengkai plans to recruit an additional 100 employees.
“We are very excited to have started the construction of our new plant,” said Mr. Chen Wang, Chief Executive Officer of Shengkai. “This expected increase in capacity is timely as we expect to see significant growth in sales due to our efforts in promoting ceramic valve applications to specific industries, such as the petrochemical industries. In May 2009, we plan to host a trade event for our customer PetroChina, where we intend to present our new products and to educate this blue chip company on the benefits of ceramic valves over metal valves in abrasive and corrosive applications.”
About Shengkai Innovations, Inc.
Shengkai Innovations is engaged in the design, manufacture and sale of ceramic valves, high-tech ceramic materials and the provision of technical consultation and related services. The Company’s industrial valve products are used by companies in the electric power, petrochemical, metallurgy, and environmental protection industries as high-performance, more durable alternatives to traditional metal valves. The Company was founded in 1994 and is headquartered in Tianjin, the PRC.
The Company is one of the few ceramic valve manufacturers in the world with research and development, engineering, and production capacity for structural ceramics and is the only valve manufacturer that is able to produce large-sized ceramic valves with calibers of 150mm or more. The Company’s product portfolio includes a broad range of valves that are sold throughout the PRC, to North America, United Arab Emirates, and other countries in the Asia-Pacific region. The Company has over 300 customers, and is the only ceramic valve supplier qualified to supply SINOPEC. The Company also became a member of the PetroChina supply network in 2006.
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the effect of political, economic, and market conditions and geopolitical events, legislative and regulatory changes, the Company’s ability to expand and upgrade its production capacity, the actions and initiatives of current and potential competitors, and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
Shengkai Innovations, Inc.
Gloria Guo
Email: wei.guo@shengkai.com
CCG Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Linda Salo, Financial Writer
Tel: +1-646-922-0894
Email: linda.salo@ccgir.com
Website: http://www.ccgirasia.com
