China Biologic Products Completes Acquisition of 35% Interest in Xi'an Huitian Blood Products Co., Ltd.
March 23 2009 - 4:00PM
PR Newswire (US)
TAIAN CITY, Shandong, China, March 23 /PRNewswire-Asia-FirstCall/
-- China Biologic Products, Inc. (OTC:CBPO) (BULLETIN BOARD: CBPO)
("China Biologic" or the "Company"), one of the leading
plasma-based pharmaceutical companies in the People's Republic of
China ("PRC"), announced that, its indirect majority owned
subsidiary, Shandong Taibang Biological Products Co., Ltd.
("Taibang"), has completed the government approval process for the
transfer of 35% of the equity interest in Xi'an Huitian Blood
Products Co., Ltd. ("Huitian"), a biopharmaceutical company based
in Xi'an, Shaanxi Province, to Taibang, for an aggregate purchase
price of RMB 44,000,000 (approximately $6.44 million) in cash (the
"Equity Transfer"). For details regarding the terms of the Equity
Transfer see the current report on Form 8-K filed by the Company on
October 16, 2008. On January 15, 2009, Huitian received a
certificate of approval (the "Certificate") from the provincial
government in Shaanxi Province for the establishment of a foreign
invested enterprise in China, which allows Huitian to operate as a
Sino-foreign joint venture; and on March 17, 2009, Huitian, as a
Sino-foreign joint venture, received business licenses from the
Administration Bureau for Industry and Commerce in Xi'an, Shaanxi
Province, to operate for 20 years. Expected benefits of the
acquisition include: -- Increase in plasma supply and additional
production capacity; -- Expansion into Shaanxi Province, which has
had historically high collection volumes; and -- Creation of
additional synergies by leveraging overhead and research and
development spending. "We are pleased to announce the completion of
this acquisition, which will strengthen our competitive position in
China's plasma-based biopharmaceutical industry," said Mr. Chao
Ming Zhao, CEO of China Biologic Products. "We believe that the
acquisition of Huitian will enable us to achieve our geographic
expansion goals and will provide us with greater access to plasma
supplies, as well as enhance our output to increase our
profitability. We plan to provide technical support to Huitian for
its renovation, strengthen its research and development efforts,
and provide management expertise to grow the business." Huitian is
the only plasma-based biopharmaceutical manufacturer in Shaanxi
Province, which has a population of 37 million. Shaanxi Province
historically has had a high collection volume with approximately
ten plasma collection stations in operation, collecting
approximately 300 tons of plasma supply each year. Huitian
currently owns three out of the four plasma collection stations in
Shaanxi Province that have passed government standards. Huitian
produces approximately 80 tons of plasma-based products per year
and has 200 tons of annual production capacity. Management believes
that Huitian currently has approximately 1.2% of the market share
in China, compared to China Biologic's estimated 6.1%, and that
Huitian's plasma supply in Shaanxi Province has strong long-term
growth potential. The top 6 largest plasma-based biopharmaceutical
companies in China have a total market share of approximately 50%.
Huitian is also one of only 32 government approved plasma-based
product producers in China, and it is in compliance with China's
Good Manufacturing Practices standards. It is approved by the PRC's
State Food and Drug Administration to produce four types of
plasma-based products including Human Albumin, Human
Immunoglobulin, Human Immunoglobulin for Intravenous Injection, and
Human Hepatitis B Immunoglobulin. China Biologic funded Taibang's
acquisition of the 35% interest in Huitian with internally
generated fund from Taibang. Taibang's 17% minority shareholder,
the Shandong Institute of Biological Products, did not contribute
any amounts toward the Equity Transfer, and agreed, in a side
agreement with China Biologic's wholly-owned subsidiary, Logic
Express, to allocate to Logic Express all of the economic benefits
(i.e., revenues and net income) and burdens (i.e., expenses, losses
and liabilities) of the 35% interest in Huitian that was acquired
by Taibang. The remaining 65% interest in Huitian is owned by
Shaanxi Power Construction Group Corporation ("SPCGC") in China, a
power construction company in Shaanxi Province. In accordance with
the terms of the Equity Transfer, both parties have agreed not to
sell their equity interests in Huitian to a third party within the
next five years, and have given each other the right of first
refusal thereafter. China Biologic plans to expand Huitian's plasma
collection capacity in Shaanxi Province and eventually acquire the
remaining interest from SPCGC if the opportunity arises. About
China Biologic Products, Inc. Through its indirect majority-owned
subsidiary, Shandong Taibang Biological Products Co. Ltd., China
Biologic Products, Inc. (the "Company"), is principally engaged in
the research, development, production, manufacturing and sale of
plasma-based biopharmaceutical products to hospitals and other
health care facilities in China. The Company's human albumin
products are mainly used to increase blood volume and its
immunoglobulin products are used for the treatment and prevention
of diseases. Safe Harbor Statement This release may contain certain
"forward-looking statements" relating to the business of China
Biologic Products, Inc. and its subsidiary companies. All
statements, other than statements of historical fact included
herein are "forward-looking statements," including statements
regarding: the impact of the acquisition of Xi'an Huitian Blood
Products Co., Ltd.; the ability of the Company to achieve its
commercial objectives; the business strategy, plans and objectives
of the Company and its subsidiaries; statements about the Company's
future revenues and earnings; and any other statements of
non-historical information. These forward-looking statements are
often identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions, involve known and
unknown risks and uncertainties. Although the Company believes that
the expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Investors should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website ( http://www.sec.gov/ ). All forward-
looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by these
factors. Other than as required under the securities laws, the
Company does not assume a duty to update these forward-looking
statements. For more information, please contact: Company Contact:
Mr. Y. Tristan Kuo CFO China Biologic Products, Inc. Tel:
+86-538-620-2206 Email: Web: http://www.chinabiologic.com/ Investor
Relations Contact: Mr. Crocker Coulson, President CCG Investor
Relations Tel: +1-646-213-1915 (NY office) Email: Mr. Gary Chin
Tel: +1-646-213-1909 Web: http://www.ccgirasia.com/ DATASOURCE:
China Biologic Products, Inc. CONTACT: Company Contact: Mr. Y.
Tristan Kuo, CFO of China Biologic Products, Inc.,
+86-538-620-2206, or ; or Investor Relations Contact: Mr. Crocker
Coulson, President, CCG Investor Relations, +1-646-213-1915 (NY
office), or , and Mr. Gary Chin, +1-646-213-1909, both for China
Biologic Products, Inc. Web site: http://www.chinabiologic.com/
http://www.ccgirasia.com/
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