Dec 15 2010
China Sun Group High-Tech Co. (OTC Bulletin Board: CSGH) ("China Sun Group" or the "Company"), a vertically integrated supplier of raw materials for rechargeable lithium–ion (Li-ion) batteries in China, today provides updated information regarding the contract with Henan Huanyu Sai Er New Energy Technology Co., Ltd. ("Sai Er New Energy"), a subsidiary of Henan Huanyu Power Source Co., Ltd.("Huanyu"), for 470 tons of lithium iron phosphate (LIP) signed in November (the "Contract"), and secures additional raw material supply.
The Contract provides for monthly tonnage delivery to Sai Er New Energy, amounting to a total of 470 tons of lithium iron phosphate in calendar year 2011. In addition to 60 tons of LIP materials sold to Huanyu, China Sun already has 530 tons of LIP orders, expected to be delivered before the end of December 2011. According to the recent China domestic average sales price of LIP of US$ 24,000 per ton, this 530 tons of LIP sales is valued at approximately US$ 12.7 million. The actual sales revenue will depend on the final outcome of the negotiations.
In order to establish the work plan for 2011 and accelerate the expansion of strategic objectives, China Sun Group recently hosted the Dalian Xinyang High-Tech 2011 Annual Conference for its employees, including two seminars: technology research and development and the acceleration of the process of strategic expansion, one month ahead of schedule. This conference greatly increased motivation of the management teams and employees.
During the annual conference, the Company's management also developed a solution to maintain stable supply and high quality of input material for the manufacture of LIP products due to increased LIP demand that has resulted in recent sales contracts exceeding previous expectations. After a careful review of potential LIP raw material suppliers, China Sun signed with two suppliers, Guangxi BMB Science and Technology Co., Ltd. ("BMB") and Hubei Haoyuan Material Technology Company. ("Haoyuan material").
Under the agreement, BMB and Haoyuan material will supply a total of 350 tons and 240 tons of iron phosphate materials respectively to China Sun Group during the calendar year 2011, which accounts for approximately 84% of China Sun's total planned purchasing volume during the year.
"We are honored to be in a strategic alliance with Sai Er New Energy and Huanyu and to work closely with our partner in terms of the production process for lithium ion battery development. We are confident that we can efficiently expand our production capacity in the near future to meet the requirements of Sai Er New Energy and Huanyu's projects. We are also pleased to have signed two new high-quality suppliers, which will further enable us to secure access to sufficient raw material," commented Mr. Guosheng Fu, CEO of China Sun Group. "As the Chinese government continues to support the development of energy-saving cars and other sustainable products and technologies, we remain positive that we will be successful in positioning China Sun Group and continue growing. Our goal is to establish a complete supply chain for materials, components and the finished lithium ion phosphate product, which is the LIP battery."