The company plans to acquire land use rights in Daqing to build its new fruit and vegetable powder manufacturing facility with an annual production capacity of 10,000 tons and is expected to begin production in September 2010.
The new facility will produce tomato, pumpkin and other popular fruit and vegetable powders that can be used as ingredients in a various products, which includes baby food, ready-to-drink mixes, instant soup mixes, snack foods, and other confectionery items.
According to the company's estimates, average selling price is estimated to be $2,640 per ton with an average gross margin of 45.0%. The company expects the new line to contribute approximately $13.5m in revenue for fiscal year 2011.
The total capital investment for the new facility is expected to be $19.1m which includes the acquisition of the land use rights of approximately 40,000sqmt, the construction of the manufacturing facility, and purchase of equipment.
Changjun Yu, chairman of China Nutrifruit, said: "Based on our market research, the fruit and vegetable powder segment is a high growth segment that complements our current product lines. We can leverage our supplier relationships along with our network of distributors to sell our new fruit and vegetable powder products.
"Furthermore, we believe entering this segment provides a more attractive return on investment than our previous plan of acquiring a concentrate pulp production line. We will continue to outsource production of our concentrate pulp products and may seek additional acquisition targets in the concentrate pulp segment in the future."