China America Holdings, Inc. , a holding company operating in China, announced today that its 56% owned China based subsidiary Shanghai AoHong Chemical Co., Ltd. ("Shanghai Aohong") has begun test run production at its newly constructed chemical production facility in Tianjin.
The newly constructed facility is located in Tianjin, approximately 70 miles north of Beijing. The facility is expected to produce approximately 8,000 tons of a mixture of refrigerant chemicals per year, virtually doubling Shanghai Aohong's total annual capacity. At today's prices, management estimates the facility is capable of generating annual revenue of approximately U.S. $22 million.
As previously reported, Shanghai Aohong's business improved substantially in its first fiscal quarter of 2010, ended December 31, 2009. This was due in part to an overall improvement in the Chinese economy as well as management's aggressive pricing strategy as it sought to gain additional customers in fiscal 2009. As the business climate returns to more normalized levels, management believes it will lead to an expanded customer base and stronger growth in the future. Management also believes its expansion into Northern China through the start of operations in Tianjin will significantly improve its overall financial performance in the second half of fiscal 2010.
Commenting on the start of production testing, Mr. Shaoyin Wang, CEO of China America Holdings, commented, "We are excited to begin this business expansion into Northern China as we now look to focus on growing our operations in an improving economic environment. Our Tianjin facility is expected to virtually double our production capacity and provide us with a platform to service the Beijing area. As we see continued improvement in our business segment we intend to aggressively seek to expand through our marketing efforts as well as to seek potential acquisition opportunities to further our growth in the coming years."
