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ShengdaTech, Inc. Acquires NPCC Facility in Anhui Province, Announces Expansion Plan

September 3, 2009

SHANGHAI, Sept. 3 /PRNewswire-Asia-FirstCall/ — ShengdaTech, Inc.
(“ShengdaTech” or the “Company”) (Nasdaq: SDTH), a leading manufacturer of
nano-precipitated calcium carbonate (“NPCC”) in China, today announced the
acquisition of Anhui Chaodong Nanomaterials Science and Technology Co., Ltd.
(“Chaodong”), an inactive NPCC facility in Hanshan County in the Yangtze River
Delta region of Anhui Province with 10,000 metric tons of annual NPCC
production capacity. With this acquisition, ShengdaTech will be the only NPCC
producer in China’s highly industrialized Anhui Province with a large market
of manufacturers of plastics, adhesives and tires.

Pursuant to the agreement with Chaodong, the Company will pay
approximately $3.8 million in cash to acquire 100% of Chaodong, including
mining rights to approximately 14.25 million tons of limestone reserves and
existing buildings and equipment. The Company will not assume any of
Chaodong’s liabilities as of the date of the agreement. The Company plans to
invest an additional $2.9 million to upgrade Chaodong’s technology and
production facility before beginning production by the end of 2009. The
investment in technology will include upgrading key equipment and developing
applied technology to lower production costs.

In connection with the acquisition, the Company entered into an investment
agreement with the Hanshan County government to expand the existing NPCC
facility to add an additional 200,000 metric tons of production capacity with
a total investment commitment of approximately $175.7 million. The agreement
includes acquisition of additional land-use rights for approximately 341,335
square meters (84.35 acres) of property adjacent to Chaodong that can
ultimately support the additional 200,000 metric tons of NPCC production
facilities and exclusive rights to 60 million metric tons of good quality
limestone. The Company will make the investment in several phases by 2013
based on market demand.

In addition to the investment agreement, the Company also separately
agreed to purchase the land-use rights for approximately 66,767 square meters
(16.5 acres) of land from the local government for the existing Chaodong
facility at an estimated cost of approximately $4.4 million.

Both agreements are currently under government review and are subject to
government approval.

“Our acquisition of Chaodong and aggressive expansion plan provide us
entry into the Yangtze River Delta, the home of numerous high-quality
manufacturers from varied industries, giving us a vast, yet untapped target
market,” commented Mr. Xiangzhi Chen, president and CEO of ShengdaTech. “As
the largest economy in China, the Yangtze River Delta accounts for over 20% of
the country’s GDP and is responsible for about one-third of the import and
export industry. Chaodong’s key location near Wuhu, a major river port on the
Yangtze River, will result in lower transportation costs and will facilitate
our international sales growth. We believe through the acquisition and
expansion, we will establish a strong foothold in this vital economic region.
This is an important step in meeting our strategic growth objectives. We are
also excited about the commencement of production at our Zibo facility, and we
believe the additional capacity will enable us to meet the growing demand from
our expanding customer base.”

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 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 resume operations at
Chaodong and expand its manufacturing capacity, ability to win new customers
in the Yangtze River Delta, 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.

    For more information, please contact:

    ShengdaTech, Inc.
     Andrew Chen, Chief Financial Officer
     Tel:   +86-21-5835-8738
     Email: andrew.chen@shengdatech.com
     Web:   http://www.shengdatechinc.com

    CCG Investor Relations
     Crocker Coulson, President
     Tel:   +1-646-213-1915
     Email: crocker.coulson@ccgir.com
     Web:   http://www.ccgirasia.com

SOURCE ShengdaTech, Inc.


Source: newswire



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