China Direct Commences Magnesium Production at Two New China Facilities Adding 14,000 Metric Tons of Annual Capacity
12 May 2008 - 10:30PM
PR Newswire (US)
DEERFIELD BEACH, Fla., May 12 /PRNewswire-FirstCall/ -- China
Direct, Inc. (NASDAQ:CDS), a U.S. company that owns controlling
stakes in a diversified portfolio of Chinese entities and assists
Chinese businesses in accessing the U.S. capital markets, today
announced that two of its China subsidiaries have commenced
operations at their newly constructed magnesium production
facilities located in China. Pan Asia Magnesium Company, Limited
("Pan Asia") has commenced production at its third 6,000 metric ton
magnesium manufacturing facility and Baotou Changxin Magnesium
Company, Limited ("Baotou Changxin") has commenced production at
its first 8,000 metric ton magnesium manufacturing facility. Pan
Asia has now reached its planned annual magnesium production
capacity of 18,000 metric tons on an annual basis. Management
estimates that Pan Asia will be capable of generating annual
revenues of approximately $60 million per year assuming an average
price for magnesium of $3,500 per metric ton. Baotou Changxin can
now produce 8,000 metric tons of magnesium on an annual basis.
Management expects Baotou Changxin to commence production of an
additional 4,000 metric tons of magnesium in June of 2008, bringing
the total annual production capacity at Baotou Changxin to 12,000
metric tons in June of 2008. Management further estimates that
Baotou Changxin will be capable of generating annual revenues of
approximately $42 million per year assuming an average price for
magnesium of $3,500 per metric ton. With the additional magnesium
production capacity at Pan Asia and Baotou Changxin, China Direct
will have manufacturing capability to produce approximately 50,000
metric tons of magnesium on an annual basis in June of 2008.
Commenting on the completion of the Pan Asia and Baotou Changxin
facilities, Dr. James Wang, Chairman and CEO of China Direct,
stated, "We have accelerated China Direct's investment in our
magnesium segment, as we continue to see industry trends remaining
favorable if not gaining momentum for the foreseeable future. We
believe the demand for resources will remain strong and current
price levels are sustainable for the foreseeable future.
Additionally, the Chinese government has recently closed down
several magnesium producers using coal fueled energy generation
facilities in Shanxi's Yuncheng city area as they do not meet
current environmental standards. We have invested significant
capital to construct more energy efficient and environmentally
responsible facilities and believe that we are well positioned in
that regard. Further shut downs of other competitors may create
supply disruptions which we believe would bolster magnesium prices.
We expect our new production to be sold into a very strong pricing
environment and as a result we anticipate operating margins to
continue to trend higher in our magnesium segment. We intend to
continue to position our magnesium segment to be a leading force in
magnesium production worldwide as we remain committed to adopting
more environmentally responsible and more energy efficient
magnesium manufacturing technologies." About China Direct, Inc.
China Direct, Inc. (NASDAQ:CDS) is a diversified management and
advisory services organization headquartered in the U.S. Our
management services division acquires a controlling interest in
entities operating in China. Our ownership control enables China
Direct to provide management advice, as well as financing to
Chinese entities. This infrastructure creates a platform to expand
business opportunities globally while effectively and efficiently
accessing the U.S. capital markets. Our advisory services division
provides comprehensive advisory and consulting services to Chinese
entities seeking to access the U.S. capital markets. As a direct
link to China, China Direct serves as a vehicle allowing investors
to directly participate in the rapid growth of the Chinese economy
in a diversified and balanced manner. For more information about
China Direct, please visit http://www.chinadirectinc.com/.
DISCLOSURE NOTICE: In connection with the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, China Direct,
Inc., is hereby providing cautionary statements identifying
important factors that could cause our actual results to differ
materially from those projected in forward-looking statements (as
defined in such act). Any statements that are not historical facts
and that express, or involve discussions as to, expectations,
beliefs, plans, objectives, assumptions or future events or
performance (often, but not always, indicated through the use of
words or phrases such as "will likely result," "are expected to,"
"will continue," "is anticipated," "estimated," "intends," "plans,"
"believes" and "projects") may be forward-looking and may involve
estimates and uncertainties which could cause actual results to
differ materially from those expressed in the forward-looking
statements. These statements include, but are not limited to, our
guidance and expectations regarding revenues, net income and
earnings. In addition, any such statements are qualified in their
entirety by reference to, and are accompanied by, the following key
factors that have a direct bearing on our results of operations:
our ability to identify and close acquisitions of operating
companies in China in a cost effective manner that enhance our
financial condition; our need for additional financing which we may
not be able to obtain on acceptable terms, the dilutive effect
additional capital raising efforts in future periods may have on
our current shareholders and the increased interest expense in
future periods related to additional debt financing; our ability to
effectively integrate our acquisitions and to manage our growth and
our inability to fully realize any anticipated benefits of acquired
business; the value of the equity securities we accept as
compensation is subject to adjustment which could result in losses
to us in future periods; the Investment Company Act of 1940 which
limits the value of securities we can accept as payment for our
business consulting services which may limit our future revenues;
our acquisition efforts in future periods may be dilutive to our
then current shareholders; our dependence on certain key personnel;
the lack various legal protections in certain agreements to which
we are a party and which are material to our operations which are
customarily contained in similar contracts prepared in the United
States; our ability to assure that related party transactions are
fair to our company. Chang Magnesium's chief executive officer is
also chief executive officer of a group of companies which directly
compete with Chang Magnesium; the risks and hazards inherent in the
mining industry on the operations of our basic materials segment;
the effect of changes resulting from the political and economic
policies of the Chinese government on our assets and operations
located in the PRC. The influence of the Chinese government over
the manner in which our Chinese subsidiaries must conduct our
business activities; the impact on future inflation in China on
economic activity in China; the impact of any recurrence of severe
acute respiratory syndrome, or SAR's, or another widespread public
health problem; the limitation on our ability to receive and use
our revenues effectively as a result of restrictions on currency
exchange in China; our ability to enforce our rights due to
policies regarding the regulation of foreign investments in China;
our ability to comply with the United States Foreign Corrupt
Practices Act which could subject us to penalties and other adverse
consequences; our ability to establish adequate management, legal
and financial controls in the PRC; the provisions of our articles
of incorporation and bylaws which may delay or prevent a takeover
which may not be in the best interests of our shareholders; and the
adverse impact of various policies recently adopted by the PRC
which seek to minimize pollution by limiting the operation of
specific polluting agents commencing on June 1, 2008 in advance of
the Beijing Olympics to be held during August 2008. We caution that
the factors described herein could cause actual results to differ
materially from those expressed in any forward-looking statements
we make and that investors should not place undue reliance on any
such forward-looking statements. Further, any forward-looking
statement speaks only as of the date on which such statement is
made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of
anticipated or unanticipated events or circumstances. New factors
emerge from time to time, and it is not possible for us to predict
all of such factors. Further, we cannot assess the impact of each
such factor on our results of operations or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. This press release is qualified in its entirety by the
cautionary statements and risk factor disclosure contained in our
Securities and Exchange Commission filings, including our Annual
Report on Form 10-K for the year ended December 31, 2007 and our
reports on Form 10-Q. DATASOURCE: China Direct, Inc. CONTACT:
Investors, Alan Sheinwald, HC International, LLC, +1-914-669-0222,
; For the Company, Richard Galterio, Executive Vice President,
China Direct, Inc., +1-877-China-57, Web site:
http://www.chinadirectinc.com/
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