- Annual Prepared Meat Capacity Will Increase 67%
- Annual Chilled and Frozen Pork Capacity Will Increase 9%
TIANJIN CITY, China, April 28 /PRNewswire-Asia/ -- Zhongpin Inc. (Nasdaq: HOGS) ("Zhongpin"), a leading meat and food processing company in the People’s Republic of China ("PRC"), today announced that on April 25, 2009 it began construction of its new pork products facility located in the Jinghai Economic Technical Development Area in Tianjin City.
The new facility will add 100,000 metric tons in annual capacity of chilled and frozen pork and 36,000 metric tons of low temperature prepared meat production capacity. The facility is expected to cost $62 million and will be equipped with advanced state-of-the-art product equipment. The chilled and frozen pork production line will have a 70% dedicated designed capacity to process chilled pork and 30% to process frozen pork. In addition, Zhongpin will also build a new warehouse and distribution center, a research and development center, and employee living quarters facilitating the Company’s cold chain distribution logistics and new product development initiatives.
The production lines for chilled and frozen pork products will come on line at the end of the first quarter of 2010 and are expected to reach target utilization level by the end of third quarter of 2010. The prepared meat production line and the new warehouse and distribution center will come on line in the third quarter of 2010 and is expected to reach target utilization level by the end of the fourth quarter of 2010. Without causing any interruption to the existing production capacity and distribution system, Zhongpin plans to terminate its lease at the existing Tianjin City facility after the new Tianjin facility currently under construction begins production. With the addition of the new facility and closure of the existing leased facility in Tianjin City, Zhongpin’s annual chilled and frozen pork production capacity will increase by 9%, reaching 545,760 metric tons from the current 498,760 metric tons and its total annual capacity of prepared meat products will increase 67%, reaching 90,000 metric tons from the current 54,000 metric tons.
"We are pleased to announce that we have begun construction of our new pork production facility in Tianjin City which will have advanced manufacturing processes and increased emphasis on quality control. The new capacity in Tianjin City will also further assist in expanding our market penetration in the Northeastern region of China, which is one of our primary target markets. By increasing capacity of our high margin prepared meat products we can optimize our product mix and increase our profitability," commented Mr. Xianfu Zhu, CEO of Zhongpin. "With the growing number of Chinese middle class consumers and the continued dominance of pork products as part of the Chinese diet, we expect demand for our pork products to continue to grow in the future. We believe our strategic growth and expansion strategy combined with increased consumer confidence in the "Zhongpin" brand provide us with an opportunity to enhance our position in the industry."
About Zhongpin
Zhongpin is a meat and food processing company that specializes in pork and pork products, and fruits and vegetables in the PRC. Its distribution network in the PRC spans 20 provinces and 4 cities with special political status, and includes over 3,061 retail outlets. Zhongpin’s export markets include the European Union, Russia, Eastern Europe, and South Africa. For more information, contact CCG Investor Relations directly or go to Zhongpin’s website at http://www.zpfood.com .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by Zhongpin on its conference call in relation to this release 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 build the new production facilities according to the timeline described, expectations of future consumer demand, ability to prepare the Company for growth, 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 these projections also 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, interruptions in the supply of live pigs/raw pork, downturns in the Chinese economy, delivery delays, freezer facility malfunctions, poor performance of the retail distribution network, changes in applicable regulations, and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission. You 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:
Crocker Coulson, President
CCG Investor Relations
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
Feng Wang, Chief Financial Officer
Zhongpin Inc.
Tel: +86-10-8286-1788
Email: ir@zhongpin.com
Web: http://www.zpfood.com
