Gulf Resources announces the merger of Yuxin Chemical and Rongyuan Chemical
August 30 2016 - 8:00AM
Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the
"Company"), a leading manufacturer of bromine, crude salt and
specialty chemical products in China, today announced the merger of
its two chemical divisions, Yuxin Chemical and Rongyuan Chemical.
Under the terms of the agreement, Yuxin will acquire Rongyuan.
After the merger is completed, during the third quarter of 2016,
Yuxin will be the surviving division.
The senior management of the two divisions will be merged as
well the finance, personnel, production, procurement, sales,
logistic and R&D departments. Gulf believes it should be able
to eliminate the substantial cost duplication between the two
divisions. In addition, the management of Gulf Resources believes
that the merger of the two divisions will give it greater
bargaining power in both procurement and sales. All of the
existing factories will continue in operation.
Mr. Xiaobin Liu, the CEO of Gulf Resources stated, “In the
current economy of China, we have to consider every opportunity to
reduce costs and improve profitability. We have two divisions that
all produce chemical types of products in similar locations. By
merging these two businesses, we can eliminate the duplication in
management, finance, sales, procurement, logistics, R&D, and
other departments. While it is too soon to quantify the full amount
of the savings, we do believe it could benefit company in many
ways.”
“In addition,” Mr. Liu continued, “We believe that one business
doing nearly $100 million in revenues after merger will have
greater leverage in procuring products and machinery and in selling
to end customers. In addition, the merger of these two divisions
will make our company easier for investors to understand and
evaluate.”
“We continue to focus on ways of improving the profitability of
Gulf Resources,” Mr. Liu concluded. “While we are pleased with the
company operation and are very optimistic about our natural gas
project, we want investors to understand that we are also focused
on reducing costs and improving profitability wherever we can.“
About Gulf Resources, Inc.Gulf Resources, Inc. operates through
four wholly-owned subsidiaries, Shouguang City Haoyuan Chemical
Company Limited ("SCHC"), Shouguang Yuxin Chemical Industry Co.,
Limited ("SYCI"), Shouguang City Rongyuan Chemical Co, Limited
(“SCRC”) and Daying County Haoyuan Chemical Company Limited
(“DCHC”). The company believes that it is one of the largest
producers of bromine in China. Elemental Bromine is used to
manufacture a wide variety of compounds utilized in industry and
agriculture. Through SYCI, the company manufactures chemical
products utilized in a variety of applications, including oil and
gas field explorations and papermaking chemical agents. SCRC is a
leading manufacturer of materials for human and animal antibiotics
in China and other parts of Asia. DCHC was established to further
explore and develop natural gas and brine resources (including
bromine and crude salt) in China. For more information, visit
www.gulfresourcesinc.com.
Forward-Looking StatementsCertain statements in this news
release contain forward-looking information about Gulf Resources
and its subsidiaries business and products within the meaning of
Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the
Securities Exchange Act of 1934, and are subject to the safe harbor
created by those rules. The actual results may differ materially
depending on a number of risk factors including, but not limited
to, the general economic and business conditions in the PRC, future
product development and production capabilities, shipments to end
customers, market acceptance of new and existing products,
additional competition from existing and new competitors for
bromine and other oilfield and power production chemicals, changes
in technology, the ability to make future bromine asset purchases,
and various other factors beyond its control. All forward-looking
statements are expressly qualified in their entirety by this
Cautionary Statement and the risks factors detailed in the
company's reports filed with the Securities and Exchange
Commission. Gulf Resources undertakes no duty to revise or update
any forward-looking statements to reflect events or circumstances
after the date of this release.
CONTACT:
Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu (Haiyan Xu)
beishengrong@vip.163.com
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