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CHINA XLX FERTILISER LTD. 中國心連心化肥有限公司 * (Incorporated in Singapore with limited liability) (Hong Kong Stock Code: 1866)
VOLUNTARY ANNOUNCEMENT PROPOSED CONSTRUCTION OF A NEW PRODUCTION FACILITY FOR COMPOUND FERTILIZER PRODUCTION The board of directors (the “Board”) of China XLX Fertiliser Ltd. (the “Company”) is pleased to announce that the Company has commenced the construction of a new production facility in southern Xinjiang Province, PRC for the production of compound fertilizer products, including water soluble fertilizer and drip irrigation fertilizer products (the “New Facility”). The New Facility comprises compound fertilizer production lines with an annual production capacity of 100,000 tons and drip irrigation fertilizer production lines with an annual production capacity of 150,000 tons. In order to establish the New Facility, the Company plans to acquire a piece of land in southern Xinjiang Province with an estimated size of 170 mu (approximately 113,000 square meters). The total investment in the New Facility is approximately RMB65,000,000 and the Group has commenced the construction work in April 2016. The New Facility is expected to be put into trial production in late September in 2016. We expect that the commissioning of the New Facility will further increase the Group’s profitability and strengthen its overall competitiveness. Demand for compound fertilizer products in southern Xinjiang Province has been increasing in the past few years along with the steady development of the forestry and fruit industry in the region. However, most of the compound fertilizer products currently available in the southern Xinjiang market are imported from outside the region and there is insufficient after-sales service. Furthermore, the formula of such products still remains in the preliminary stage of development. In view of the above, the Board is optimistic that the expansion into southern Xinjiang market will enhance the Group’s market share in Xinjiang Province by the provision of high quality services and products with better formula, both of which will differentiate us from our competitors in Xinjiang Province.
In addition, the New Facility is also positioned to be a production and storage base in southern Xinjiang Province with a view to save time and costs spent on transportation within Xinjiang Province. This will considerably increase our ability to serve our customers located in the southern Xinjiang market during peak sales season.
By Order of the Board Liu Xingxu Chairman of the Board
26 April 2016 As at the date of this announcement, the executive directors of the Company are Mr. Liu Xingxu, Ms. Yan Yunhua and Mr. Zhang Qingjin; the independent non-executive directors of the Company are Mr. Ong Kian Guan, Mr. Li Shengxiao and Mr. Ong Wei Jin; and the non-executive director of the Company is Mr. Lian Jie. * for identification purpose only