New Dragon Asia Corporation announced today [Tuesday] that it has signed an agreement to acquire Shandong Long Feng Peng Lai Flour Co. Ltd. of Shandong, China.


Terms of the sale were not disclosed, but completion of the acquisition is anticipated for April 2002.


Sales for the Shandong operations were approximately US$4.7m for 2001, and the acquisition is expected to be accretive to New Dragon’s earnings in 2002. Total production capacity of Shandong Long Feng Peng Lai is currently 32,000 metric tons per annum, which will represent approximately 20% of New Dragon’s total flour milling capacity following completion of the acquisition. New Dragon is ranked within the top three flour manufacturers and instant noodle producers of Mainland China.


“We are pleased to announce this important acquisition allowing us to significantly increase our flour milling capacity in China,” said Song Xue Jun, chairman and president of New Dragon. “This acquisition is the first step of our strategy to acquire additional plants with strong regional brand recognition in order to increase our market share in China.


“The market for instant foods in China is expected to grow 25% over the next year, and Shandong positions us to capture a large part of the market.”

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Shandong Long Feng Peng Lai Flour Co produces high-quality wheat flour, principally for domestic sale within China. The company’s milling facilities, which incorporate state-of-the-art equipment and technology, are certified to ISO 9002 standards as are all of New Dragon’s facilities.