Oct 1 2010
China XD Plastics Company Limited ("China XD Plastics" or the "Company"), (NasdaqGM: CXDC), a leading Chinese developer, manufacturer, and distributor of modified plastics primarily for use in automotive applications in China, announced today that it has signed a delivery agreement for 2,000 tons per year of environmentally friendly and high-value added modified plastics designed for use in electric vehicles (the "Product").
The first batch of the Product will be formally delivered in January 2011, and will be used in the production of Hafei electric vehicle models and certain brands of electric vehicles manufactured in Taiwan.
As previously announced, China XD Plastics began the development of the Product in 2010 and signed an exclusive development agreement with Hafei Dongyang, a leading automotive parts supplier in Northeast China, in July 2010, followed by an extensive testing, certification and product trial process which culminated in the approval of the product by automotive manufacturers for use in battery casings. In addition to possessing superior mechanical properties compared to metals, the Product can further reduce the weight of the battery and the electric vehicle as a whole. The Product can be applied to a wide variety of battery casings used in electric vehicles.
The Chinese government plans to invest RMB100 billion in the next 10 years to support the development of clean energy technologies and the new energy automobile industry, with a focus on providing support for the developers of core components, parts and new materials for use in the clean energy industries. The Company believes that the gradual implementation of these government policies will act as a powerful growth driver supplementing the overall growth of the automotive industry in China, and will provide the Company opportunities to increase sales of high-value added and higher margin products.
Mr. Jie Han, Chairman and CEO of China XD Plastics, commented, "We are pleased to announce the delivery of this new high quality product for use in the electric vehicle market. Our entry into the electric vehicle market is building momentum, which is in-line with our strategy of increasing production of high value-added products to drive sales growth and margin expansion. Looking ahead, we will continue to leverage our strong R&D capabilities to develop new modified plastics products for use in clean energy vehicles to meet the rapidly growing market demand for this segment in China."