China Nutrifruit Announces Delay in Fruit and Vegetable Powder Production Schedule

Despite the delay in commencing production of its fruit and vegetable powder products, management expects that such delay will not materially affect its 2011 fiscal year financial results.

1/19/2011 --- China Nutrifruit Group Limited, a leading producer of premium specialty fruit based products in China, announced that due to difficult weather conditions in Daqing, the Company has decided to delay the final equipment installation phase of its new fruit and vegetable powder production facility until March 2011.

China Nutrifruit announced earlier that the Company expects to complete construction of its new fruit and vegetable powder facility and commence production in January 2011. However, weather conditions in Daqing continued to remain challenging in December 2010, with average temperatures falling 10 degrees lower than the same period in recent years. The Company's management team has decided to delay the final phase of equipment installation to ensure worker safety and avoid any injuries. The Company expects to resume the equipment installation progress in March 2011 and expects to commence trial production in June 2011.

Despite the delay in commencing production of its fruit and vegetable powder products, management expects that such delay will not materially affect its 2011 fiscal year financial results. The Company expects higher average selling prices of its products and increased production of the new glazed fruit products, including seabuckthorn and blackcurrant, to offset the loss in revenue and net income from the new fruit and vegetable powder line for fiscal year 2011. The Company also reaffirms its financial guidance for fiscal year 2011 for revenue in the range of $90-$95 million and net income of $22-$23 million.

"We are experiencing unusually cold weather in Daqing, which presents a challenge for our workers. The fruit and vegetable powder facility consists of a spray-tower which is approximately 60 meters in height and equipment installation at such height is adversely affected by extreme cold conditions. Worker safety is of primary importance to us and is also in the best interest of the Company. Therefore, we made a decision to temporarily discontinue equipment installation progress until March 2011," commented Mr. Changjun Yu, Chairman of China Nutrifruit. "In fiscal year 2011, we benefited from increased average selling prices of our products and positive market demand for our new seabuckthorn and blackcurrant glazed fruit products introduced in September 2010. We believe these positive developments will enable us to meet our financial guidance. We also continue to hold a positive market outlook for our fruit and vegetable powder segment, which is expected to drive our revenue growth and profitability to the next level in fiscal year 2012."