Nutrastar expands its organic and specialty foods business

Nutrastar expands its organic and specialty foods business

Chinese supplier Nutrastar International Inc. plans to expand its organic and specialty food consumer products business.

 

Nutrastar International Inc. (OTCBB: NUIN; "Nutrastar" or the "Company"), a leading China based producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris, functional health beverages and organic and specialty food products, announced that the Company plans to significantly expand its organic and specialty food consumer products business over the next 12—18 months.

Based on the current plan, production capacity expansion of the Company's organic and specialty food business will total an area of approximately 890,000 square meters located on the Company's existing production grounds. The planned expansion will consist of hundreds of greenhouses with an annual projected production capacity in excess of 6.5 million kg comprised of a variety of organic products. The entire project is expected to be completed by the end of 2012 with partial production starting during that year. The Company expects to arrange for new distribution channels to accommodate the increased output once the expansion is in operation.

Ms. Lianyun Han, CEO and founder of Nutrastar, commented, "For some time now, our efforts have been focused on growing two of our three consumer product businesses—our Cordyceps and beverage lines—which we have done with demonstrated success. Over the next several quarters, in addition to continuing our other expansion plans, we will be ardently focused on growing our third consumer product business—organic & specialty foods, including fresh produce—which we are very excited about. With strong support from the Heilongjiang provincial government and the Daqing city government, we'll be building numerous greenhouses on our existing property and working alongside experts from Northeast Agricultural University to ensure proper quality control and food safety, and to meet the highest regulatory standards."

Ms. Han continued, "While the organic food and produce industry in China is quite fragmented and competitive, it is growing rapidly, as concerns about food safety continue to be an issue nationally. As an incentive to growing locally and organically, local governments are providing financial support through subsidies to organic and green producers. With this expansion, we hope to capitalize on this growing market demand and gain share in the organic food and produce industry, further increasing our market position as a leading provider of premium branded consumer products."

It is estimated that the expansion will require capital expenditures of approximately $11 million, which will be funded from the Company's cash on hand and cash generated from operations. In addition, as part of the government's incentive and financial support, the Company expects to receive a subsidy for a portion of the total cost of the expansion, currently estimated to be between 10%—15% of the project cost.

Please note that all numbers are projected and estimated based on the current project plan and actual results may be different from the plan as stated in the Safe Harbor Statement below.

About Nutrastar International Inc.

Nutrastar is a leading China based producer and supplier of premium branded consumer products including commercially cultivated Cordyceps Militaris, functional health beverages and organic and specialty food products. Cordyceps Militaris, our core product, is one of the most highly regarded herbal nutrients in Traditional Chinese Medicine. The Company is headquartered in Harbin, capital of Heilongjiang province, with 321 employees, 21 in R&D and 140 in sales and marketing. The products of Nutrastar are sold throughout China via a direct and distribution network that covers more than 10 provinces. More information may be found at http://www.nutrastarintl.com/.

 

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