Feb 1 2011
China Integrated Energy, Inc. (Nasdaq: CBEH; the "Company"), a leading non-state-owned integrated energy company in the People's Republic of China, today announced that it has completed the construction of a new 50,000-ton biodiesel production facility, adjacent to its existing 100,000-ton biodiesel production facility in Tongchuan City, Shaanxi Province.
The new 50,000-ton production facility will bring the Company's total biodiesel production capacity to 200,000 tons per annum. The company operates a 100,000-ton biodiesel plant in Tongchuan City, Shaanxi Province and a 50,000-ton plant in Chongqing City, China.
The total construction cost of the new biodiesel production facility was approximately $19.3 million. $18.3 million has been paid by the Company to date, and the remaining $1 million will be paid in the first quarter of 2011.
The facility is expected to be operating at 25% - 30% capacity in the first quarter of 2011 and 50% - 60% capacity in the second quarter, ramping to 80% - 90% utilization rate in the third quarter. For the full-year 2011, the new facility is expected to contribute approximately $21 million in revenue and $5.2 million in net income.
The Company's advanced production technology at this second-generation 50,000-ton biodiesel facility is estimated to reduce production costs by approximately 20%. The new second-generation facility utilizes an even further diverse supply of raw materials, such as crop straw, agricultural waste and organic waste, and will provide the Company with better input cost controls while ensuring optimal capacity utilization.
"Our new biodiesel facility is an integral step in our growth strategy for 2011. It brings on line an additional 50,000 tons of capacity to meet the growing market demand for biodiesel, supported by the government's goal to increase renewable energy consumption to 15% of China's total energy consumption by year 2020," stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy. "This new facility, along with our plans to construct a 300,000-ton biodiesel plant (phase one with 200,000-ton) upon the acquisition of Hainan Lin Gao Chemical Co., will support our revenue and net income targets moving forward."