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Hanfeng to reduce under-performing activities and facilities in China.
Jul. 30, 2012
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Going forward, the primary use of the Jiangsu facility will be the ongoing training of existing and future staff, and research and development of advanced fertilizer products and technologies. Training will initially be focused on existing staff from the Indonesian Joint Venture, both for the current operations in Surubaya, Indonesia as well as in preparation for the future planned expansion in Indonesia. The Company will also train any future licensees of Hanfeng's technology. In addition, the Jiangsu facility will continue to produce certain specialty fertilizer products for commercial sale to local customers of a targeted minimum of 25,000 metric tons per annum. This decision to refocus the facility is a result both of the loss of a local urea supplier as previously disclosed, which led to decreased competitiveness in a challenging local market, as well as increased demands for training.
At the same time, Hanfeng intends to sell its previous research and development facility in Shanghai, China.
Commenting on this, Xinduo Yu, President and CEO of Hanfeng stated: "The market factors in the Jiangsu area, and the loss of the local urea producing plant, make it an unattractive area in which to concentrate Hanfeng's resources. Working closely with our core customers, we continue to move towards a more R&D-focused business developing specialized products, on a company-wide basis. The Jiangsu facility will serve as a more enhanced R&D center that will provide continuous training for current and future joint venture facilities as more capacity comes on stream. The past year we have seen a number of teams from our Indonesian joint venture come to Jiangsu for one-on-one training, which has resulted in increased production efficiencies in Indonesia. We expect this to continue as we move forward with our expansion plans in Indonesia, having previously announced a 600,000 metric ton per annum expansion on the island of Kalimantan, Indonesia."
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