SkyPeople Fruit Juice Announces Agreement to Manufacture and Market Kiwi
XI'AN, China, April 8, 2013
XI'AN, China, April 8, 2013 /PRNewswire-FirstCall/ -- SkyPeople Fruit Juice,
Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice
concentrates, fruit juice beverages and other fruit-related products,
announced today that SkyPeople Juice Group Co., Ltd., ("SkyPeople (China)") a
company organized under the laws of the People's Republic of China and a
99.78%-owned subsidiary of the Company, entered into an Investment Agreement
(the "Agreement") with the Managing Committee of Mei County National Kiwi
Fruit Wholesale Trading Center (the "Committee"). The Committee has been
authorized by the People's Government of Mei County to be in charge of the
construction and administration of the Mei County National Kiwi Fruit
Wholesale Trading Center for the development of production lines for the deep
processing of kiwi products as well as the establishment of a trading zone for
the marketing and distribution of kiwi goods (the "Project") in Mei County,
"We are very pleased to announce this new agreement with the Committee. Our
further expansion into the kiwi fruit segment is based upon our belief that it
represents a potentially high margin product and one that is becoming
increasingly attractive to consumers.The Project substantially increases our
existing manufacturing scale for kiwi-related products and has the potential
to capitalize upon the region's large planting area for kiwi in China while
strengthening a core product category for the company," commented Mr. Hongke
Xue, the Chief Executive Officer of SkyPeople.
Pursuant to the Agreement, the Company will develop production lines for kiwi
puree, kiwi fruit juice, kiwi pectin, kiwi seed oil extraction and frozen
specialty fruit and vegetable products, as well as supporting facilities for
such production such as a food safety inspection center. The planned area for
this part of the Project is 150 mu (approximately 24.7 acres) which the
Company estimates will require a capital investment of RMB 294.3 million
(approximately $47.5 million).
Pursuant to the Agreement, the Project will also include the development of a
kiwi-related materials trading zone to include a trading mall, fruit trading
shelter and fruit-related materials trading shelter with a planned area of 136
mu (approximately 22.4 acres). The Company estimates that this part of the
Project will require a capital investment of RMB 151.3 million (approximately
$24.4 million). In addition, a land grant fee of RMB 0.3 million per mu will
also be payable to account designated by the Committee in two installments
following the closing of the Agreement between it and the Company.
Pursuant to the Agreement, the Committee will be responsible for the basic
infrastructure surrounding the project land, such as the main water supply,
main water drainage, main power supply, main roads, natural gas provision and
communications network. The Committee and the Company will jointly work on
several areas of common interest in executing the project. The Agreement is
contingent upon certain other conditions being satisfied and the receipt of
further governmental approvals.
SkyPeople's decision to enter into the Project is consistent with its strategy
to locate its manufacturing centers near fruit growing centers to optimize the
utilization of fresh, high quality fruit while minimizing transportation
costs. The Company plans to utilize its existing marketing infrastructure and
distribution channels to sell the kiwi-related products developed via the
Project. SkyPeople plans to fund the costs of the Project, as well as
associated working capital, using its current cash balances, expected future
cash flow from operations and debt financing.
"SkyPeople is committed to creating fruit products that have strong long-term
demand fundamentals where we can leverage our operating capabilities and
utilize our marketing and distribution economies of scale. We believe that the
agreement with the Government of Mei County will be of significant benefit to
both parties and will generate a sound return on investment for the Company,"
concluded Mr. Hongke Xue, CEO of SkyPeople.
About SkyPeople Fruit Juice, Inc.
SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned
subsidiary Pacific Industry Holding Group Co., Ltd. ("Pacific"), a Vanuatu
company, and SkyPeople Juice International Holding (HK) Ltd., a company
organized under the laws of Hong Kong Special Administrative Region of the
People's Republic of China and a wholly owned subsidiary of Pacific, holds
99.78% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople
(China)"). SkyPeople (China), together with its operating subsidiaries in
China, is engaged in the production and sales of fruit juice concentrates,
fruit beverages, and other fruit related products in the PRC and overseas
markets. Its fruit juice concentrates are sold to domestic customers and
exported directly or via distributors. Fruit juice concentrates are used as a
basic ingredient component in the food industry. Its brands, "Hedetang" and
"SkyPeople," which are registered trademarks in the PRC, are positioned as
high quality, healthy and nutritious end-use juice beverages. For more
information, please visit http://www.skypeoplefruitjuice.com.
This press release contains certain "forward-looking statements" that involve
a number of risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and the actual results and future events
could differ materially from management's current expectations. Such factors
include, but are not limited to, the Company's ability to obtain the necessary
financing to continue and expand operations, to market its products in new
markets and to offer products at competitive pricing, to attract and retain
management, and to integrate and maintain technical information and management
information systems, political and economic factors in the People's Republic
of China, compliance requirement of laws and regulations of the PRC, the
effects of currency policies and fluctuations, general economic conditions and
other factors detailed from time to time in the Company's filings with the
United States Securities and Exchange Commission and other regulatory
authorities. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
For more information, please contact:
Xin Ma, Chief Financial Officer
SkyPeople Fruit Juice, Inc.
Tel: China + 86 - 29-8837-7161
SOURCE SkyPeople Fruit Juice, Inc.
Contact: INVESTOR RELATIONS, David Rudnick, Account Manager, CCG Investor
Relations,US +1-646-626-4172, firstname.lastname@example.org, http://www.ccgir.com
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