- Reopens Changtu Facility, Implements Intermodal Loading Dock at the Daqing
Facility, and Increases Operating Line of Credit with China Construction Bank -
TORONTO, Dec. 14 /CNW/ - Asia Bio-Chem Group Corp. (TSX: ABC) ("Asia
Bio-Chem" or the "Company") is pleased to announce that it has
successfully completed the upgrade and relocation of its Changtu
facility. This project is the first phase ("Phase 1") of the
development of the Changtu Corn Bio Chemical Industrial Park, which has
been established in cooperation with the Changtu county government.
"This is an extremely important milestone for our Company as it
positions us at the top of our industry in terms of production
processes and product quality." said Zhiping Wang, President and
CEO. "This project will help our current and future customers comply
with their customer's requirements to provide stable, quality product
together with full environmental compliance."
Phase 1 included an upgrade of Asia Bio-Chem's Changtu plant in the
areas of evaporation, dewatering, and packaging. These upgrades will
improve efficiencies by reducing steam, electricity, and water usage.
Also, by undertaking these upgrades the Company has now satisfied the
latest requirements of the international food and beverage industry,
thereby allowing the Company to qualify for larger contracts. Phase 1
also involved the relocation of the Changtu facility to a new 190,000
square meter parcel of land, which was granted to the Company by the
county government. The County has made significant investments into the
new location, which is 7.5 kilometres from the previous Changtu plant.
The old plant will remain the property of the company and serve as a
storage facility to allow the Company to manage more of its own grain
supply for the new facility. The total cost of Phase 1 was
approximately RMB 80 million ($12 million).
Further, the Company has completed the implementation of an intermodal
container system at the Daqing Facility. The use of intermodal
containers provides the Company with a number of advantages:
Previously, Asia Bio-Chem could only load product when a train was at
its facility; therefore, the Company was restricted in its production
by the amount of storage space and the timing of rail cars. Now, the
Company can continuously load product into the containers, thereby
allowing a higher rate of production at the plant.
Once the product is in the containers, the Company does not need to
offload the product at the sea port, saving time and labour. The new
containers are loaded directly from the rail cars to the ships, which
reduces the time the product sits at the seaport and provides more
efficient scheduling between the rail car and ship arrivals and
Overall, this new system will reduce the period of time it takes to ship
the Company's products to its customers, which should improve the
Company's receivables turnover.
The Company is also pleased to announce that it has secured an
additional RMB 55 million (C$8.4 million) in operating credit facility
from China Construction Bank. The loan represents an increase of the
existing RMB 145 million operating loan in our Daqing Plant, which has
been renewed with a maturity date of December 13, 2011. The loan will
be renewable on an annual basis and will be secured against the assets
of the Company's Daqing Plant. This facility will bear a floating rate
of interest based on 110% of the Peoples Central Bank Rate, or
About Asia Bio-Chem Group Corp.
Asia Bio-Chem Group, through its wholly-owned subsidiaries in the
People's Republic of China ("PRC"), is in the business of processing
corn. From its plants in Liaoning and Heilongjiang Province, the
Company has a total processing capacity of 900,000 tonnes of corn per
year, which are processed into cornstarch, corn germ, gluten, and fiber
for sale into the domestic Chinese market.
This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words "expects,", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and similar
expressions, or that events or conditions "will", "would", "may",
"could" or "should" occur. Although the Company believes the
expectations expressed in such forward looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance and actual results may differ materially from those in
forward looking statements. Forward looking statements are based on the
beliefs, estimates and opinions of the Company's management on the date
the statements are made. The Company undertakes no obligation to update
these forward looking statements, except as required by law, in the
event that management's beliefs, estimates or opinions, or other
factors, should change.
SOURCE Asia Bio-Chem Group Corp.
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