SORL Purchases Land and Manufacturing Plant to Resolve Production Capacity Bottleneck
01 October 2007 - 9:44PM
PR Newswire (US)
RUIAN CITY, Zhejiang Province, China, Oct. 1 /Xinhua-PRNewswire/ --
SORL Auto Parts, Inc. (NASDAQ:SORL) ("SORL" or the "Company"), a
leading manufacturer and distributor of automotive air brake valves
and related components in China, today announced that, through its
subsidiary, Ruili Group Ruian Auto Parts Co. Ltd., it has purchased
land rights, a manufacturing plant and office building with a total
floor area of 66,177.91 square meters, or 712,333 square feet, from
Ruili Group Co. Ltd. ("Ruili"), for 152 million yuan (US$20
million). The Company currently leases from Ruili and occupies
approximately 50 percent of this production facility. Ruili will
vacate the rest of the facility by the end of October. The
appraisal of the assets was conducted by the leading independent
appraiser, DTZ Debenham Tie Leung Ltd., and total asset value was
appraised at 154 million yuan (US$20.3 million). As a result of
this transaction, the acquired capacity expansion is expected to
meet the Company's growth demands for the next 2 to 3 years. The
purchase price will be paid by the Company by transferring to Ruili
its $9 million investment in an existing project that includes a
new-facility- in-progress and prepayment of land use rights, with
the balance of $11 million to be paid by the end of October 2007
from the Company's existing bank credit line. "In order to solve
the current production capacity bottleneck and meet the fast
growing demand for our products in the domestic OEM, aftermarket
and international markets, we have decided to purchase Ruili
Group's existing facility and scale up our capacity quickly to
capture the market opportunity," said Xiaoping Zhang, CEO of SORL.
"Completing the new facility under construction would have delayed
our capacity expansion until late 2008 and hindered our near-term
growth. The Chinese commercial vehicle market has experienced
significant growth this year and especially for heavy trucks. We
are benefiting from the growth of commercial activity in China as
well as robust government spending on infrastructure buildout and
the maturing of the domestic logistics industry. We see very
favorable market conditions for commercial vehicle auto parts. The
land use rights and facilities purchased will add to our production
starting in the late fourth quarter of 2007, expanding our capacity
for continued growth and to enhance shareholder value." About SORL
Auto Parts, Inc. As China's leading manufacturer and distributor of
automotive air brake valves, SORL Auto Parts, Inc. ranks first in
market share in the segment for commercial vehicles weighing more
than three tons, such as trucks and buses. The Company distributes
products both within China and internationally under the SORL
trademark. SORL ranks among the top 100 auto component suppliers in
China, with a product range that includes 40 types of air brake
valves and over 800 different specifications. The Company has three
authorized international sales centers in Australia, United Arab
Emirates, and the United States, with additional offices slated to
open in other locations in the near future. For more information,
please visit http://www.sorl.cn/ . About DTZ DTZ is one of the 'big
four' global real estate advisers operating across Europe, Middle
East and Africa (EMEA), Asia Pacific and the Americas. With a team
of over 11,000 property professionals within its system operating
across 140 cities in 45 countries, DTZ works with clients to
provide innovative real estate, capital markets and business
solutions worldwide. DTZ Holdings plc, which is the largest
shareholder in the DTZ operations, is a publicly quoted company,
listed on the London Stock Exchange since 1987. For more
information, please visit http://www.dtz.com/ . Safe Harbor
Statement This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, among others, those concerning
our estimated sales and expected expansion of our production
capacity as well as all assumptions, expectations, predictions,
intentions or beliefs about future events. You are cautioned that
any such forward-looking statements are not guarantees of future
performance and that a number of risks and uncertainties could
cause actual results of the Company to differ materially from those
anticipated, expressed or implied in the forward-looking
statements. The words "believe," "expect," "anticipate," "project,"
"targets," "optimistic," "intend," "aim," "will" or similar
expressions are intended to identify forward-looking statements.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements. Risks
and uncertainties that could cause actual results to differ
materially from those anticipated include risks related to new and
existing products, product defects and any related product recall;
any projections of sales, earnings, revenue, margins or other
financial items; any statements of the plans, strategies and
objectives of management for future operations; any statements
regarding future economic conditions or performance; uncertainties
related to conducting business in China; any statements of belief
or intention; any of the factors and risks mentioned in the "Risk
Factors" section of our Annual Report on Form 10-K for the year
ended December 31, 2006 and any subsequent SEC filings. The Company
assumes no obligation and does not intend to update any
forward-looking statements, except as required by law. For further
information, please contact: Richard (Weihai) Cai Investor
Relations Manager Tel: +86-577-6581-7721 Email: Kevin Theiss
Investor Relations The Global Consulting Group Tel: +1-646-284-9409
Email: DATASOURCE: SORL Auto Parts, Inc. CONTACT: Richard (Weihai)
Cai, Investor Relations Manager, +86-577-6581- 7721, or ; Kevin
Theiss, Investor Relations for The Global Consulting Group,
+1-646-284-9409, or Web site: http://www.sorl.cn/
http://www.dtz.com/
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