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Update on Ulanqab City manufacturing facility

9th Aug 2012 07:00

RNS Number : 6309J
Sorbic International PLC
09 August 2012
 



 

 

Press Release

9 August 2012

 

 

Sorbic International plc

 

("Sorbic" or the "Company")

 

Further update on Ulanqab City manufacturing facility

 

Sorbic International plc (AIM:SORB), the third largest sorbates producer in China, today gives the following update on its manufacturing facility in Ulanqab City, Inner Mongolia. As announced on 17 July 2012, the Company met with local authorities in Ulanqab City to discuss the effects on the Company of the proposed zone reclassification and the potential compensation plan that would be offered by the Ulanqab authorities. The Board is pleased to announce that negotiations have advanced significantly in relation to the potential compensation plan from the Ulanqab authorities.

 

In addition to the overarching agreement that the Company will not suffer any financial loss as a result of the rezoning process, the following specific principles have been established:

·; As previously announced, the Company has been offered land on an adjacent site only 0.5 km away from its existing site. The land will be of approximately the same size as the site of the current facility and will be provided at no cost

·; The Company will receive compensation for the costs incurred in terms of construction, relocation, inflation and interest

·; In respect of the costs incurred in construction of the manufacturing facility, an independent valuer (acceptable to both parties) will be appointed to appraise the construction cost. The Company is concurrently obtaining third party quotes for the rebuilding of the facility which will be compared against the independent valuer's appraisal.

 

Additionally the local authorities have agreed to offer a loan to the Company to enable Sorbic to start construction as soon as the details of the compensation package are finalised. It is anticipated that drawdown of this transitional loan will enable Sorbic to commence construction of the new factory before the onset of winter.

 

The ongoing discussions remain positive for Sorbic and the Board looks forward to updating shareholders once the details of the compensation package have been finalised.

 

- 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 / Oliver Baxendale

Tel: +44 (0)20 7398 7709

[email protected]

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

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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