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April 8, 2013 /PRNewswire-FirstCall/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, announced today that SkyPeople Juice Group Co., Ltd., ("SkyPeople (
China)") a company organized under the laws of
the People's Republic of China and a 99.78%-owned subsidiary of the Company, entered into an Investment Agreement (the "Agreement") with the Managing Committee of Mei County National Kiwi Fruit Wholesale Trading Center (the "Committee"). The Committee has been authorized by the People's Government of Mei County to be in charge of the construction and administration of the Mei County National Kiwi Fruit Wholesale Trading Center for the development of production lines for the deep processing of kiwi products as well as the establishment of a trading zone for the marketing and distribution of kiwi goods (the "Project") in Mei County,
"We are very pleased to announce this new agreement with the Committee. Our further expansion into the kiwi fruit segment is based upon our belief that it represents a potentially high margin product and one that is becoming increasingly attractive to consumers. The Project substantially increases our existing manufacturing scale for kiwi-related products and has the potential to capitalize upon the region's large planting area for kiwi in
China while strengthening a core product category for the company," commented Mr. Hongke Xue, the Chief Executive Officer of SkyPeople.
Pursuant to the Agreement, the Company will develop production lines for kiwi puree, kiwi fruit juice, kiwi pectin, kiwi seed oil extraction and frozen specialty fruit and vegetable products, as well as supporting facilities for such production such as a food safety inspection center. The planned area for this part of the Project is 150 mu (approximately 24.7 acres) which the Company estimates will require a capital investment of
RMB 294.3 million (approximately
Pursuant to the Agreement, the Project will also include the development of a kiwi-related materials trading zone to include a trading mall, fruit trading shelter and fruit-related materials trading shelter with a planned area of 136 mu (approximately 22.4 acres). The Company estimates that this part of the Project will require a capital investment of
RMB 151.3 million (approximately
$24.4 million). In addition, a land grant fee of
RMB 0.3 million per mu will also be payable to account designated by the Committee in two installments following the closing of the Agreement between it and the Company.
Pursuant to the Agreement, the Committee will be responsible for the basic infrastructure surrounding the project land, such as the main water supply, main water drainage, main power supply, main roads, natural gas provision and communications network. The Committee and the Company will jointly work on several areas of common interest in executing the project. The Agreement is contingent upon certain other conditions being satisfied and the receipt of further governmental approvals.