Asian Bamboo acquires a 40% stake in Xinlifeng
Hamburg, 11 January, 2010 – Asian Bamboo AG (“Asian Bamboo”, “the Company”, ISIN: DE000A0M6M79, ticker symbol: “5AB”), a world-leading producer of bamboo trees and organic bamboo shoots, is pleased to announce that Hong Kong XRX Bamboo Investment Co., Ltd. (“Hong Kong XRX”), a wholly owned subsidiary, has acquired a 40% stake in Fujian Xin Li Feng Bamboo Group Co., Ltd. (“Xinlifeng”), a leading producer of bamboo plywood, for approximately EUR 3 million.
Xinlifeng was created by transferring assets from San Feng Group, which has an established market position in the bamboo plywood industry. Xinlifeng’s bamboo plywood products are mainly used in the construction industry as building templates and have certain advantages over building templates made of other types of wood. The cash contribution from Hong Kong XRX will be used to increase Xinlifeng’s production capacity in order to meet increasing demand. The registered capital of Xinlifeng is EUR 7.5 million and the company is debt free.
The Management Board of Asian Bamboo believes that Xinlifeng will buy around 20% of the Company’s total output of bamboo trees in 2010. In addition, it expects that Xinlifeng will achieve a turnover and net profit of at least EUR 13 million and EUR 1.7 million, respectively. Benefitting from the strong demand in the construction industry in China, in combination with the comparative benefits of using bamboo for building template production, the Management Board of Asian Bamboo believes that the outlook for Xinlifeng is very promising.
Lin Zuojun, CEO and founder of Asian Bamboo, commented: “Our investment in Xinlifeng creates a new major distribution channel for our bamboo trees which will increase total demand, in line with our plans for future plantation size expansion.”
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