China ACM Announces $6.8 Million in New High Speed Rail Contracts
February 17 2011 - 7:55AM
Marketwired
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 been awarded
two high-speed rail (HSR) contracts valued at $6.8 million total.
The contract was awarded to the Company's Manufacturing Services
business segment and is being fulfilled with premium ready-mix
concrete (RMC) from four portable plants. China ACM reported a
gross margin of 31 percent for its rapidly growing Manufacturing
Services business segment, compared with its blended gross margin
of 19 percent, in the second fiscal quarter ended Dec. 31,
2010.
China ACM was awarded the contracts by CCCC Tunnel Engineering
Co., Ltd., a subsidiary of Beijing-based China Communications
Construction Company Limited (HKEx: 01800), for its premium RMC
manufacturing and related engineering services on the Shanghai -
Kunming Passenger Line in Jiangxi Province. They will require
approximately 830,000 cubic meters of RMC and are valued at $6.8
million.
The first contract is for Part 4, Section 3, Jiangxi Section of
the Shanghai - Kunming Passenger Rail project in Jiangxi Province.
It is valued at approximately $4.34 million and will require about
530,000 cubic meters of China ACM premium RMC.
The second contract is for Part 5, Section 3, Jiangxi Section of
the Shanghai - Kunming Passenger Rail project in Jiangxi Province.
It is valued at approximately $2.46 million and will require about
300,000 cubic meters of China ACM premium RMC.
These contracts are estimated for completion in the second and
fourth quarters of Fiscal Year 2012, respectively. This brings to
23 the total number of Company portable concrete plants, with 19
fully contracted and operating country wide today. The remaining
four are in preliminary, trial production at client sites, as is
customary, and the Company anticipates announcing that they are
fully contracted in the current or subsequent quarter.
Commenting on the contract, Mr. Xianfu Han, Chairman and Chief
Executive Officer of China ACM, said, "High speed rail is a major,
vital component of China's drive toward modernization and
urbanization. I am pleased to report continuing solid progress in
our rapidly growing manufacturing services business, reflecting
growing demand for our patented, premium eco-friendly RMC
blends."
China ACM estimates the total addressable market just for HSR
RMC at $15 billion over the next 10 years. Analysts report that
China's 6,552 km high-speed railway system is the longest in the
world, and is expected to double to 13,000 km by the end of 2012.
This includes newly built high-speed links and existing track that
will be upgraded to accommodate trains running 200-250 km/hour.
Over the next 10 years, the Ministry of Railways plans to construct
an additional 34,000 km of railway track in the country (more than
half of which will be HSR), more closely linking the Central and
Western regions to coastal provinces.
About China ACM China ACM is a leading
producer of advanced, certified eco-friendly ready-mix concrete
(RMC) and related technical services for large scale, high-speed
rail (HSR) and other complex infrastructure projects. Leveraging
its proprietary technology and value-add engineering services
model, the Company has won work on numerous high profile projects
including the 30,000 km China HSR expansion, the Olympic Stadium
Bird's Nest, Beijing South Railway Station, Beijing International
Airport, National Centre for Performing Arts, CCTV Headquarters,
Beijing Yintai Building and U.S. and French embassies.
Founded in 2002, Beijing-based China ACM provides its materials
and services through its network of fixed ready-mix concrete plants
covering the Beijing metropolitan area. It also has technical
consulting services and preferred procurement agreements with other
independently-owned plants across China. Additionally, the Company
owns numerous portable plants deployed in various provinces across
China primarily to major high speed rail projects. More information
about the Company is available at www.china-acm.com.
Forward-Looking Statements This press
release contains statements that are forward-looking in nature,
including statements regarding the Company's competitive position
and product and service offerings. These statements are based on
current expectations on the date of this press release and involve
a number of risks and uncertainties, which may cause actual results
to differ significantly from such estimates. The risks include, but
are not limited to, the degree of market adoption of the Company's
product and service offerings; market competition; dependence on
strategic partners; and the Company's ability to manage its
business effectively in a rapidly evolving market. Certain of these
and other risks are set forth in more detail in "Item 1A. Risk
Factors" in China ACM's Annual Report on Form 10-K for the fiscal
year ended June 30, 2010. China ACM does not assume any obligation
to update or revise any such forward-looking statements, whether as
the result of new developments or otherwise.
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Contact Financial Profiles Tricia Ross (916) 939-7285
tross@finprofiles.com Financial Profiles Moira Conlon Tel: (310)
478-2700 mconlon@finprofiles.com
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