JINJIANG, China, May 23, 2011 /PRNewswire-Asia/ -- China Ceramics
Co., Ltd. (NASDAQ Global Market: CCCL, CCCLW, CCCLU) ("China
Ceramics" or the "Company"), a leading Chinese manufacturer of
ceramic tiles used for exterior siding and for interior flooring
and design in residential and commercial buildings, today provided
a clarified capital expenditures outlook for 2011 and 2012.
Plant Expansion and Capital Expenditures – Clarification and
Outlook
The Company believes that it would be helpful to investors to
provide more detailed information of its plant expansion and
capital expenditure plans as disclosed in its first quarter 2011
earnings press release. This represents an update from what was
stated in the Company's Annual Report on Form 20-F for the year
ended December 31, 2010, which was
based on forecasts that were performed in 2010, and a clarification
of what was stated in the Company's first quarter earnings press
release. China Ceramics' capital expenditures in 2011 and 2012 are
expected to be directed towards the purchase of specialized
equipment for Hengda and Hengdali, the construction of new plant
facilities at Hengdali and the construction of a new administrative
office building adjacent to the Hengdali plant.
"We have recently decided to increase the production capacity of
our Hengda and Hengdali facilities more rapidly in 2011 to
capitalize upon the heightened market demand for our ceramic tiles.
Our capital expenditures will be directed towards the purchase of
specialized equipment as well as the construction of new plant and
office facilities," said Mr. Jaidong Huang, China Ceramics' Chief
Executive Officer.
"The planned expansion of our newer Hengdali facility will
enable the Company to produce innovative products and will reflect
state-of-the art design, machinery and system architecture. We
expect that this will generate a high return on investment due to
potentially premium pricing and higher margins," concluded CEO
Jaidong Huang.
2011 Plant Expansion and Capital Expenditure Plans
The information contained in the first quarter 2011 earnings
press release, as filed with the SEC on Form 6-K on May 13, 2011, is the Company's most recent
outlook as relates to the expansion of the Company's Hengda and
Hengdali facilities and its associated capital expenditures. What
follows is a more detailed explanation of this outlook.
The Hengda Facility
The Company's current plan is to increase the production
capacity at the Hengda facility from its current annual production
capacity of 32.2 million square meters of ceramic tiles to 42
million square meters by the end of 2011. The total capital
expenditures in 2011 for Hengda are estimated to be RMB 175 million ($27
million).
The projected demand for the Company's products is stronger this
year than originally anticipated. Therefore, the Company's most
recent expansion plans are intended to significantly increase the
production capacity of the Hengda facility to meet this demand. The
Company plans to replace old production lines with new,
state-of-the art equipment and production processes in order to
accommodate this expected higher demand. This includes a new
expenditure of an estimated RMB 20
million ($3 million) for
stone-breaking equipment that is integral to the efficiency of the
production process. The associated capital expenditures are
required to accommodate this higher demand, all of which are for
additional machinery and not facility construction.
The Hengdali Facility
The Company's current plan for 2011 is to increase the
production capacity at the Hengdali plant from its current annual
production capacity of 10 million square meters of ceramic tiles to
30 million square meters, which is expected to occur during the
third quarter. The capital expenditures associated with this
expansion is expected to be RMB 195
million (US $30 million).
The projected demand for the Company's products is stronger this
year than originally anticipated. Therefore, the Company has
accelerated its plans to construct new facilities at the Gaoan
site, including additional plant facilities and an administrative
building. As the expansion of the Hengdali facility is now planned
to proceed faster than originally expected, the Company intends to
install additional machinery in the Hengdali facility in 2011 that
was originally planned for 2012. The associated capital
expenditures are required to accommodate this higher demand. The
equipment will produce the Company's new premium, large-sized
polished glaze products which it believes will have higher selling
prices and higher margins.
In determining the amount of additional productive capacity for
its allocation of capital expenditures, the Company views only
machinery, not plant or administrative facilities, as a direct
contributor to revenue generation, and therefore determinative of
the amount of production capacity.
Of the planned capital expenditures for 2011 for this phase of
expansion at Hengdali, an estimated RMB 67
million ($10.3 million) will
be allocated for the construction of additional plant facilities
and the construction of an administrative office building. In more
recent past quarters, all of Hengdali's capital expenditures went
towards the purchase of manufacturing equipment that increased the
annual production capacity of ceramic tiles.
2012 Facilities Expansion and Capital Expenditure
Plans
The expansion and associated capital expenditures for the Hengda
facility are expected to be completed in 2011. For 2012, routine
capital maintenance expenditures for Hengda are expected to be
minimal.
The 2012 expansion at Hengdali is expected to provide an
additional 14 million square meters of annual production capacity
of ceramic tiles by the end of 2012. The capital expenditures
associated with this expansion of Hengdali are expected to be
approximately RMB 230 million
($35 million) for 2012. Of this
amount, an estimated RMB 77 million
($11.8 million) will be allocated for
the construction of new facilities which will house the new
equipment and ceramic tile production lines. In 2012, the Company
will be directing its equipment expenditures towards the purchase
of new, state-of-the-art technology and equipment to meet the
demand for its products.
Summary Plant Expansion and Capital Expenditure
Outlook
The Company expects to have a total annual production capacity
of approximately 86 million square meters of ceramic tiles by the
end of 2012. This is an increase from the 78.8 million square
meters of ceramic tiles planned for in 2010 as stated in the
Company's Annual Report on Form 20-F for the year ended
December 31, 2010.
The Company notes that its capacity expansion plans and capital
expenditures outlook could change as a result of the dynamics of
the building materials industry, the projected demand for the
Company's ceramic tile products, the actual process and duration of
construction, and the delivery of production equipment, among
various other factors.
The Company believes that its current cash balances combined
with its expected future cash flow from operations and its
borrowing capacity will be sufficient to meet the capital
expenditure requirements of the production capacity expansion
associated with the Hengda and Hengdali facilities.
About China Ceramics Co., Ltd
China Ceramics Co., Ltd. is a leading manufacturer of ceramic
tiles in China. The Company's
ceramic tiles are used for exterior siding, interior flooring, and
design in residential and commercial buildings. China Ceramics'
products, sold under the "Hengda" or "HD", "Hengdeli" or "HDL", the
"TOERTO" and "WULIQIAO" brands, and the new "Pottery Capital of
Tang Dynasty" brands, are available in over 2,000 styles, colors
and sizes combinations and are distributed through a network of
exclusive distributors or directly to large property developers.
For more information, please visit http://www.cceramics.com.
Safe Harbor Statement
Certain of the statements made in this press release are
"forward-looking statements" within the
meaning and protections of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements include statements
with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions,
and future performance, and involve known and unknown risks,
uncertainties and other factors, which may be beyond our control,
and which may cause the actual results, performance, capital,
ownership or achievements of the Company to be materially different
from future results, performance or achievements expressed or
implied by such forward-looking statements. All statements other
than statements of historical fact are statements that could be
forward-looking statements. You can identify these forward-looking
statements through our use of words such as
"may," "will,"
"anticipate," "assume,"
"should," "indicate,"
"would," "believe,"
"contemplate," "expect,"
"estimate," "continue,"
"plan," "point to,"
"project," "could,"
"intend," "target" and
other similar words and expressions of the future.
All written or oral forward-looking statements attributable
to us are expressly qualified in their entirety by this cautionary
notice, including, without limitation, those risks and
uncertainties described in our annual report on Form 20-F for the
year ended December 31, 2010 and
otherwise in our SEC reports and filings, including the final
prospectus for our offering. Such reports are
available upon request from the Company, or from the Securities and
Exchange Commission, including through the SEC's
Internet website at http://www.sec.gov. We have no obligation and
do not undertake to update, revise or correct any of the
forward-looking statements after the date hereof, or after the
respective dates on which any such statements otherwise are
made.
Contact Information:
China Ceramics Co.,
Ltd.
|
CCG Investor Relations
Inc.
|
|
Edmund Hen, Chief
Financial Officer
|
David Rudnick, Account
Manager
|
|
Email: info@cceramics.com
|
Email: david.rudnick@ccgir.com
|
|
|
Phone:
+1-646-626-4172
|
|
|
|
SOURCE China Ceramics Co., Ltd.