Site Sponsors
  • Strem Chemicals - Nanomaterials for R&D
  • Oxford Instruments Nanoanalysis - X-Max Large Area Analytical EDS SDD
  • Park Systems - Manufacturer of a complete range of AFM solutions
Posted in | Nanomaterials | Nanobusiness

ShengdaTech Acquires Anhui Chaodong Nanomaterials Science and Technology

Published on September 3, 2009 at 9:15 PM

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."

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback