CHANGGE, Henan, China, March 12 /Xinhua-PRNewswire-FirstCall/ -- Zhongpin Inc. (Nasdaq: HOGS) ("Zhongpin"), a leading meat and food processing company in the People’s Republic of China ("PRC"), today announced that it has begun construction on its prepared meat facility at Zhongpin’s Industrial Park located in Changge City, Henan Province.
The new facility will add 28,800 metric tons in annual capacity of prepared meat for a 114% increase over Zhongpin’s current capacity of 25,200 metric tons, bringing total capacity of prepared meats to 54,000 metric tons. The facility is expected to cost $13.2 million and will be equipped with the most advanced, automated, state-of-the-art equipment from top-tier equipment manufacturers in Germany, the U.S and Japan. It is designed to process high-value-added prepared meat products, such as a variety of popular sausages, meatballs and hams that appeal to the evolving tastes of Chinese middle-class consumers. The facility expands Zhongpin’s product lines by optimizing product mix, and increasing the percentage of Zhongpin’s higher-margin products and is expected to begin production in September 2008.
Zhongpin is ahead of schedule in the construction of its western Henan Province facility (Luoyang) which is now expected to begin operations by the end of second quarter of 2008. Zhongpin’s eastern Henan Province facility (Shangqiu) also is expected to begin operations in the third quarter of 2008. The new western and eastern facilities will add 70,000 metric tons and 80,000 metric tons annual capacity, respectively, of annual capacity of chilled and frozen pork. Once these facilities are completed, Zhongpin will have total capacity of 509,000 metric tons of chilled and frozen pork. Zhongpin also continues to benefit from the local government support of the industrialization of meat production in China and recently received a tax refund of RMB 2.3 million (approximately $323,944) for tax paid in 2007.
"Demand for pork processed in modern hygienic processing facilities remains strong as consumers are increasingly purchasing their pork from supermarkets, hypermarkets and retail outlets rather than the traditional wet markets," commented by Mr. Xianfu Zhu, Chairman of Board and CEO of Zhongpin. "During 2008 we foresee that consumer demand for high-quality, fresh and hygienic pork products will continue to be very strong, supporting Zhongpin’s rapid expansion plan. In addition to expanding our capacity, we have taken steps to secure an ample supply of hogs and continue to develop our brand recognition as we penetrate new markets. Moreover, the snowstorms in January and February in partial regions of southern China had very limited impact on our operations as our facilities and key markets are not located in those regions."
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 more than 20 provinces and includes over 2,900 retail outlets. Zhongpin’s export markets include the European Union, Eastern Europe, Russia, Hong Kong, Japan and South Korea. For more information, contact CCG Elite directly or go to Zhongpin’s website at http://www.zpfood.com .
Safe Harbor Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release constitute forward-looking statements within the meaning of Federal securities laws. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of the company’s management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: 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.
For more information, please contact:
Crocker Coulson, President
Leslie Richardson, Financial Writer
CCG Elite
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Yuanmei Ma, Chief Financial Officer
Zhongpin Inc.
Tel: +86-10-82861788
