SkyPeople Fruit Juice, Inc. Acquires Apple Juice Facility
Huludao Wonder will serve as the core manufacturing and processing facility for apple juice concentrate for the Company.
17/06/08 SkyPeople Fruit Juice, Inc., a leading processor and manufacturer of concentrated apple juice, kiwifruit, pear and other fruit juice products announced that it has acquired full ownership of Huludao Wonder Fruit Co., Ltd. for RMB 48.25 million (approximately $6.94 million). The transaction closed on June 10, 2008 through the offset of related party receivables.
Huludao Wonder will serve as the core manufacturing and processing facility for apple juice concentrate for the Company. The facility is located in Liaoling province noted for its high acidic apple, which produced 7,208 tons of concentrated apple juice in 2007. As of May 31, 2008, the total assets of Huludao Wonder was RMB 109 million (approximately $15.7 million).
Prior to the acquisition, Huludao Wonder was a direct subsidiary of a related party of the Company, Shaanxi Hede Venture Capital Limited ("Hede"). On June 1, 2007, SkyPeople entered a contractual agreement with Hede to lease all the assets and operating facilities of Huludao Wonder for one year. In accordance with the US GAAP accounting practices under FIN 46R, the Company consolidated Huludao Wonder's operations into its financial results effective June 1, 2007. Huludao Wonder contributed approximately $8.0 million in revenue during the six months ended December 31, 2007.
"Our completion of the acquisition of Huludao Wonder enhances our ability to participate in the expanding international demand for apple juice concentrate. Operating Huludao Wonder for one year has accelerated our potential to increase productivity through processing and manufacturing facility upgrades. China's export of apple juice concentrate reached 1.04 million metric tons representing 67% of the international trade volume for the 2006-2007 season," said Mr. Yongke Xue, CEO of SkyPeople. "It is anticipated that the acquisition of Huludao Wonder will decrease our administrative expenses and enable us to more efficiently utilize our internal resources."
