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Shengtai Pharmaceutical, Inc. Expects Stable Corn Prices in China with Sufficient Raw Material Supplies

2008-07-10 17:42 580

WEIFANG, Shandong, China, July 10 /Xinhua-PRNewswire-FirstCall/ -- Shengtai Pharmaceutical, Inc. (OTC Bulletin Board: SGTI) (“Shengtai Pharmaceutical” or “the Company”), a leading manufacturer and distributor of high-quality, pharmaceutical grade glucose products in China, today announced that it expects prices for corn, its major raw material ingredient, to remain stable and sees sufficient supplies in the next two months.

Since mid-2007, food prices in China have been climbing at double-digit annual rates mostly due to shortages of pork and grain. However, corn prices in China have averaged about $255 per metric ton during the last nine months and currently remain at about that level. Corn prices in China have remained stable due to the Chinese government’s policy to control the amount of corn consumption for the fuel industry. Additionally, it has been selling corn reserves to the open market on a weekly basis for approximately $240 per metric ton, in order to keep corn prices stable.

China is the second biggest corn-producing country in the world and Shandong Province, where Shengtai Pharmaceutical is located, is the major corn producing region. Corn is the principal raw material used to manufacture cornstarch and glucose. Shengtai Pharmaceutical’s production facilities are situated well geographically in mid-Shandong. In August and September each year, the Company reserves more corn for production as a result of relative lower corn prices due to a seasonal rise in the supply of corn. The proximity to the corn production region ensures the Company with sufficient supplies of corn and minimizes the Company’s transportation costs.

“We expect corn prices in the next two months will continue to remain stable despite the overall higher inflation rate in China. Our geographic advantage and stable corn prices, along with our increasing reserve of raw materials, should stabilize our gross profit margin,” said Chairman and CEO, Mr. Qingtai Liu. “In addition, we have successfully completed the trial production and quality tests of our new glucose facility and started its official operation at the beginning of July 2008. Our facility is running smoothly, while we expect some further adjustments to our manufacturing process to maximize our production cycle as we ramp up to full capacity. We continue to have sufficient supplies of corn which we will use to manufacture glucose from both our existing glucose facility and now our new state-of-the-art glucose plant.”

About Shengtai Pharmaceutical, Inc.

Shengtai Pharmaceutical, Inc. through its wholly-owned subsidiary Shengtai Holding, Inc. (SHI), a New Jersey corporation, and the Chinese operating company of Weifang Shengtai Pharmaceutical Co., Ltd., is a leading manufacturer and supplier of pharmaceutical grade glucose used for medical purposes, and the glucose and cornstarch products for the food and beverage industry and for industrial production in China. For more information about Shengtai Pharmaceutical, Inc., please visit http://www.shengtaipharmaceutical.com .

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by the Company, 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 capacity expansion in 2008 and predictions and guidance 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 they 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 especially in the pharmaceutical industry, pricing and demand trends for the Company’s products, changes to government regulations, risk associated with operation of the Company’s new facilities, risk associated with large scale implementation of the company’s business plan, the ability to attract new customers, ability to increase its product’s applications, cost of raw materials, downturns in the Chinese economy, and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission. Investors 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 more information, please contact:

Company Contact:

Ms. Melody Shi

CFO

Shengtai Pharmaceutical, Inc.

Tel: +1-949-468-7078

Email: shengtaicfo@hotmail.com

Web: http://www.shengtaipharmaceutical.com

Investor Relations Contact:

Mr. Crocker Coulson

President

CCG Investor Relations

Tel: +1-646-213-1915 (NY Office)

Email: crocker.coulson@ccgir.com

Web: http://www.ccgir.com

Source: Shengtai Pharmaceutical, Inc.
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