31st Dec 2012 07:00
Press Release | 31 December 2012 |
Sorbic International plc
("Sorbic" or the "Company")
Agreement with APAC Chemical Corporation
Sorbic International plc (AIM:SORB), the third largest sorbates producer in China, is pleased to announce that its subsidiary, Linyi Van Science and Technique Co., Ltd ("LVST"), has signed an agreement with APAC Chemical Corporation ("APAC") to form a new company; Linyi APAC Van Food Ingredients Co. Ltd (the "New Company"). The New Company will utilise the capabilities of both companies' technical strength and production capacity to further penetrate the global sorbates market.
Following the formation of the New Company, APAC will be LVST's exclusive sorbic acid and potassium sorbate distributor in North America. The Directors anticipate that APAC could purchase up to 80% of the Company's current capacity.
The Company has been working with APAC for some time and will continue to work towards other areas of collaboration.
APAC is a US based chemical company specialising in the manufacturing of sorbic acid and potassium sorbate, as well as importing and distributing food additives and other specialty chemicals.
The Board believes that the agreement will enable the Company to secure more significant global customers that it is currently unable to engage with as LVST has no warehouse facility in the USA. This agreement gives the Company access to APAC's infrastructure, thereby enabling the Company to expand its multinational customer base.
John McLean, Chairman of Sorbic, commented: "This agreement will enable us to establish a stronger brand for LVST - our products are already used in both the domestic markets and internationally.
"Whilst the Company does not expect to benefit from improved pricing in the near term as a result of this agreement, with up to 80% of the Company's production at our existing site underwritten, this will allow LVST to take a stronger position when negotiating pricing on smaller orders. As China is adopting sorbates as a standard in food safety there is growing demand for our products, and this agreement enables the Company to expand on its current distribution and secure larger global customers."
As announced with the results last month, the Board continues to work to seek a conclusion of the negotiations regarding the Inner Mongolia facility, and will update shareholders in due course."
- Ends -
For further information: | |
Sorbic International plc | Tel: +44 (0)7768 031 454 |
John McLean, Chairman | www.sorbicinternational.com |
finnCap | |
Geoff Nash / Ben Thompson Simon Starr (broking) | Tel: +44 (0) 20 7600 1658 |
Media enquiries:
Abchurch Communications | |
Joanne Shears | Tel: +44 (0)20 7398 7709 |
www.abchurch-group.com |
Notes to Editors: www.sorbicinternational.com
About Sorbic International plc
Sorbic International's principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its base in Linyi City, Shandong Province, Peoples Republic of China. Approximately half of Sorbic International's production is sold to overseas markets, across 46 countries and half into the Chinese domestic market.
Sorbic Acid is a naturally occurring organic compound that is used in all kinds of foods for its anti-decomposition and anti-fungus function and also in grains, medicines, cosmetics, toothpaste, tobacco, animal feed, latex, paper-manufacturing and pesticides. Potassium Sorbate is used to inhibit moulds and yeasts in many foods, such as cheese, wine, yogurt, dried meat, baked goods, cosmetics and pharmaceuticals.
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