SHENZHEN, China, July 28, 2005 (PRIMEZONE) -- New Dragon Asia Corp. (AMEX:NWD) today announced it has received an initial order for approximately 13.2 tons of soybean protein powder from Coca-Cola (China) Beverages Ltd., based in Shanghai, China. The company's soybean operation is expected to generate revenues of more than $5.0 million in 2005 from Coca-Cola and other existing customers, additional terms were not disclosed.
"This order follows an extensive evaluation by Coca-Cola's quality control department, with New Dragon passing its stringent standards. It clearly demonstrates the importance of maintaining rigorous production standards and offering our customers the highest quality. We look forward to additional opportunities to leverage our relationship with one of the world's leading brand names," said Li Xia Wang, chief executive officer.
New Dragon Asia also said it recently acquired the plant and machinery utilized for the production of soybean-derived products for Coca-Cola and other customers from a state-owned enterprise. The facility, located in Longkou City, Shangdong Province, China, had been operated by New Dragon Asia under a 10-year lease agreement, with three production lines and aggregate annual production capacity of 3,000 tons of soybean protein powder and 1,500 tons of soybean milk powder.
New Dragon Asia said that a portion of funds raised through a recently completed $6.0 million private placement was utilized for this acquisition and its planned purchase of a new production line that will add annual capacity of approximately 2,000 tons of soybean powder. The new production line will be primarily utilized for Coca-Cola's soybean powder order requirements.
The facility utilizes only organic soybean sources, which complements New Dragon Asia's Grade A certification of its flour products by the China Green Food Development Center, an organization solely authorized by the Chinese government to issue the "green" and organic label to food producers. In addition to Coca-Cola, customers of this facility include baby food and cereal food manufacturers, hotels and other beverage manufacturers. The facility also produces a special type of soybean milk powder for the Chinese National Army.
About The Company
New Dragon Asia Corp. is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and commercial customers throughout China. The company markets its well-established product line through a network of more than 200 key distributors and 16 regional offices in 27 Chinese provinces with an aggregate production capacity of approximately 110,000 tons of flour and more than 1.1 billion packages of instant noodles.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; changes in laws and regulations; fluctuations in costs of production, foreign exchange and interest rates; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.