Articles

RSS

"Gulf Resources", a leading manufacturer of bromine, crude salt and specialty chemical products in China , recently announced that its wholly-owned subsidiary Shouguang City Haoyuan Chemical Company Limited ("SCHC") has signed an agreement to acquire manufacturing assets involved in bromine production from Liangcai Zhang, an individual resident of the People's Republic of China .

"The acquisition will result in additional annual production capacity of approximately 3,000 tons of bromine based on the company's own assessment and expand the consolidated annual production capacity of SCHC to 44,547 tons of bromine, based on the annual production of 41,547 tons of bromine evaluated by a third-party independent international appraisal firm, Grant Sherman Appraisal Limited, in November 2011 before the acquisition. We expect the additional production of bromine from these new assets to add approximately $2.2 to 2.3 million in incremental gross profit before tax annually," stated Xiaobin Liu , Chief Executive Officer of Gulf Resources "The company will continue with its acquisition strategy and look for appropriate targets."

Consideration for the asset purchase is approximately $10 million ( RMB 63 million ) in cash and upon the closing of the transaction, no later than10 days after receiving the satisfactory assessment report, SCHC will acquire the buildings, wells, machinery, equipment, pipelines, and power circuits owned by the sellers, and any warranties associated therewith, located at 3 kilometers west of the Yangkou Village, south of Youyi road in Shouguang City Yangkou Township. The Company expects to resume production with the newly acquired assets by the end of first quarter 2012 after repair and adjustment.

The closing of the transaction is subject to certain closing conditions, including a final assessment of the condition of the assets. Further details on the terms of this transaction can be found in the Company's 8-K which is expected to be filed with the U.S. Securities and Exchange Commission on December 22, 2011 .

SOURCE: Gulf Resources, Inc.