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ShengdaTech, Inc. Begins Production at New NPCC Facility in Zibo

Posted on: Monday, 31 August 2009, 07:00 CDT

SHANGHAI, Aug. 31 /PRNewswire-Asia-FirstCall/ -- ShengdaTech, Inc. ("ShengdaTech" or "The Company") (Nasdaq: SDTH), China's leading manufacturer of nano-precipitated calcium carbonate ("NPCC"), today announced that the Company's new NPCC production facility, in Zibo, Shandong Province, commenced production of their first phase of 60,000 metric tons ("MT") on August 28, 2009.

With the additional capacity gained from the new plant, ShengdaTech's total annual production capacity has increased 31.6% to 250,000 MT from 190,000 MT. By the end of 2009, the Zibo facility is expected to achieve a capacity utilization run rate of 80%. The Company's other two NPCC facilities, in Shandong and Shaanxi Provinces, are expected to continue running at 100% utilization.

The plant is located in Zibo High-Tech Development Industrial Zone, about 120 miles from the port of Qiangdao, which is China's second largest port for foreign trade. The Zibo facility has a total designed annual production capacity of 240,000 MT on the 58-acre land plot purchased by ShengdaTech for the Zibo expansion and will be built out in several phases. The production building constructed for phase I has a total designed annual production capacity of 80,000 MT; the additional 20,000 MT of production capacity can be brought online with the purchase and installation of additional equipment.

Thus far, ShengdaTech has invested approximately $59 million in its Zibo facility, which includes securing land-use rights, construction of the phase I production building, and the purchase and installation of equipment. The Company expects to incur additional costs to secure long-term mining rights, which are currently under negotiation.

"In 2001, ShengdaTech entered the NPCC business on a very small scale with only one production line of 10,000 metric tons. Today, we are the largest NPCC producer in China, with production capacity of 250,000 MT per year, and we plan to expand further through organic growth and acquisitions," commented Mr. Xiangzhi Chen, president and CEO of ShengdaTech. "Our success is largely attributable to the management team's ability to implement our aggressive NPCC expansion strategy, support progressive research and development initiatives, and enhance our sales and marketing efforts. These actions have combined to strengthen our leading position as a high-quality NPCC supplier. With the revival of the Chinese economy, we are confident that the rapid development of the automotive, construction, and consumer-related industries will drive domestic demand for NPCC well into the future. Furthermore, as world-wide economic conditions improve, we expect to continue with our expansion plans to sell NPCC into more international markets."

About ShengdaTech, Inc.

ShengdaTech is engaged in the business of manufacturing, marketing and selling nano precipitated calcium carbonate ("NPCC") products. The Company converts limestone into NPCC using its proprietary technology co-developed with Tsinghua University. ShengdaTech is the only company possessing proprietary NPCC technology in China. In addition to its broad customer base in China, the Company currently exports to Singapore, Thailand, South Korea, Malaysia, Vietnam, India and Israel. For more information, contact CCG Investor Relations directly or go to ShengdaTech's website at http://www.shengdatechinc.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release and oral statements made by ShengdaTech 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 the Company's ability to prepare for growth, the Company's planned manufacturing capacity expansion, 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 tire industry, changes in composition of tires, the Company's ability to meet the planned expansion schedule for its NPCC capacity, the Company's ability to identify acquisition targets, changes to government regulations, risk associated with operation of the Company's new manufacturing facility, ability to attract new customers, ability to increase its product's applications, ability of its customers to sell products, cost of raw material, 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. You are urged to consider these factors care 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.

SOURCE ShengdaTech, Inc.

Source: PR Newswire

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