Nutrition Bars Production to Reach 50,000 Tons in Three Years
QINGDAO, China and ROCKVILLE, Md., Nov. 14 /Xinhua-PRNewswire/ --
Synutra International, Inc. (OTC Bulletin Board: SYUT), one of China's leading
manufacturers of dairy-based nutritional products for infants, children and
adults, announces that it finalized a transaction last week to acquire land
use rights, plant buildings, and equipment from the Finance Department of
Zheng Lan Qi (County) of the Autonomous Region of Inner Mongolia in China.
With these assets, Synutra will build a new facility capable of processing
120,000 tons of fresh milk per year, producing 40 tons of milk fat per day,
manufacturing milk protein-based food ingredients and producing packaged
nutritional products, including protein bars, for the retail market.
Dr. Willie W. Wu, Synutra's Vice President for Sales and Marketing, said,
"The nutritional power bar launch will enable Synutra to enter another
fast-growing category in China's dairy market, the milk protein-based
nutritionals segment. The target customer group for the milk protein-based
nutritional products is similar to that of Synutra's existing products, which
will allow us to leverage our existing manufacturing and marketing
capabilities and vast distribution network."
The demand for milk protein-based nutritional products has grown steadily
in neighboring East Asian markets, and Synutra anticipates that this market
will experience similarly strong growth over the next two to three years in
China. With the newly acquired assets, the Synutra management team estimates
that the Company's nutrition bars production capacity will reach 50,000 tons
per year in three years.
According to the terms of the transaction, Synutra will retrofit the
acquired assets, which also include fresh milk collection centers throughout
the county of Zheng Lan Qi, and begin operations in the processing and
production facilities in the next two to three quarters. The transaction
involves an investment of RMB 31 million (approximately US$3.9 million) from
Synutra and a RMB 30 million (approximately US$3.8 million) cash subsidy from
the local government to Synutra as an incentive payment rewarding the
Company's commitment to local economic development. The details of this
transaction have been disclosed in the Form 8-K current report filed with the
U.S. Securities and Exchange Commission on November 9, 2006.
About Synutra International, Inc.
Synutra operates six subsidiaries developing, producing, distributing and
selling dairy-based nutritional products across the People's Republic of
China. It offers its products for infants, children, adults and pregnant women
and nursing mothers under the brand series of "Super," "U-Smart" and
"U-Strong." The Group's extensive sales network covers 24 provinces, 227
cities and more than 800 counties throughout China. For more information,
please contact Weiguo Zhang of Synutra, Inc. (301 840 3888,
wzhang@synutra.com), Brian Rafferty of Taylor Rafferty (212 889 4350,
synutra@taylor-rafferty.com) or visit: www.synutra.com.
The information contained herein includes forward-looking statements.
These statements relate to future events or to our future financial
performance, and involve known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
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publicly update or revise these forward-looking statements for any reason, or
to update the reasons actual results could differ materially from those
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