China ACM Acquires New Portable Ready-Mix Concrete Plants

China Advanced Construction Materials Group, Inc. (NASDAQ: CADC) ("China ACM"), a leading provider of ready-mix concrete and related technical services in China, today announced it has acquired seven new portable ready-mix concrete (RMC) plants, bringing to 23 its total number of Manufacturing Services portable plants owned.

"Our stated goal had been to add between four and ten new portable plants in Fiscal Year 2011," said Jeremy Goodwin, China ACM President and Chief Financial Officer. "Having already reached our target midpoint of seven, we are increasingly confident of continuing to build the company's higher margin business through a combination of cash flow and debt financing to drive strong growth."

The total cost of the new plants' equipment was $4.6 million net. The low cost reflects repurposing and re-allocation of some previously retired portable plants and batching station equipment held in the Company's inventory. The new plant equipment components were purchased and expensed as equipment deposit pre-payments recorded in FY-10. Accordingly, these plants were largely purchased with free cash flow, not the subsequent, recently announced first fiscal quarter 2011 debt financing proceeds. Four of the seven newly purchased or reconstituted plants will be classified and posted as capital equipment in the first fiscal quarter of 2011, ended September 30, and three in the second quarter, as they achieve trial production.

Following an accelerating pace of new and larger high speed rail (HSR) contracts awarded its Manufacturing Services Segment in recent months, the Company has a strong pipeline of prospective HSR and other business and expects to contract and deploy the new capital equipment in the months ahead.

China ACM reported an average gross margin of 47% in FY 2010 for its rapidly growing Manufacturing Services business, compared with the 20.8 percent Company blended gross margin it recently reported for the 2010 fiscal year ended June 30.

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