Migao Corporation

Migao Corporation

January 05, 2011 07:30 ET

Migao to Construct 100,000 Tonne Specialty Compound Fertilizer Facility at New Zunyi Location

Follows success of Migao's Sichuan-based Compound Fertilizer Operation

TORONTO, ONTARIO--(Marketwire - Jan. 5, 2011) - Migao Corporation (TSX:MGO), a leading producer of specialty potash fertilizers for the Chinese market, is pleased to announce that it will be constructing a new 100,000 tonne per year specialty compound fertilizer production facility at a new location in Zunyi, Guizhou Province, China.

"One of the largest tobacco companies in China has expressed interest in purchasing large quantities of our specialty compound fertilizer. The compound fertilizer we produce at Sichuan Migao meets their requirements and we are confident that we will supply the entire 100,000 tonne output on an annual basis," said Mr. Liu Guocai, Migao's President and CEO. "We have changed the location and increased the amount of land we had previously secured in return for a more desirable location. It is situated within 800 metres of a rail line and ideal for the intended operation of producing specialty compound fertilizer."

The new 100,000 tonne per year specialty compound fertilizer production facility will be built in two modules with the initial 50,000 tonne module scheduled for completion by the end of this year. The Zunyi facility will incorporate processing improvements learned from the Sichuan compounding facility. The new location and increased amount of land will accommodate further expansion beyond the planned 100,000 tonne facility. The capital budget to complete the two phases, including new land use rights is approximately CAD $15 million.

Zunyi Migao is a wholly owned subsidiary and when fully operating, will produce 100,000 tonnes of specialty compound nitrogen, phosphate, potassium, and other mineral and nutrient blends annually. Migao has an existing 100,000 tonne specialty compound fertilizer facility operating at full capacity at its Sichuan location.

Migao is currently producing at full capacity, 320,000 tonnes of its two core potash-based fertilizers. With the addition of a 40,000 tonne potassium nitrate 50/50 joint venture with SQM, a new 40,000 tonne potassium sulphate facility near Shanghai in early 2011, and a 40,000 tonne potassium sulphate expansion at Changchun Migao later this year, Migao will have net production capacity of 420,000 tonnes. This figure does not include the co-products ammonium chloride or hydrochloric acid nor does it include 200,000 tonnes of specialty compound fertilizer produced annually at Sichuan Migao and Zunyi Migao.

About Migao

Migao Corporation, through its wholly owned subsidiaries, owns and operates fertilizer production plants in various strategic locations across China for the production and sale of specialty potash fertilizer (potassium nitrate and potassium sulphate) and specialty compound fertilizers to China's agricultural market. Migao Corporation is subject to, and complies with strict government regulations that govern safety, quality and environmental protection. Migao's Sichuan facility is ISO 14001 certified, an international environmental management standard. Please visit www.migaocorp.com for further information.


This news release may include forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and other provincial securities laws in Canada. These forward-looking statements include, among others, statements with respect to our objectives and goals, and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", and "continue" (or the negative or grammatical variations thereof), and words and expressions of similar meaning, are intended to identify forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results, performance or achievements may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on forward-looking statements as a number of important factors, many of which are beyond our control, could cause actual results, performance or achievements to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors that relate to our company include, but are not limited to: risks related to raw materials; execution of the business plan; expansion plans; dependence on key personnel; key relationships; dependence on key customers; dependence on key suppliers; competition; market factors and volatility of commodity prices; environmental risks and hazards; operating risks; proprietary rights; infrastructure; future capital requirements; technical substitution; exchange rate fluctuations; insurance; foreign operations; tobacco industry considerations; weather conditions and natural disasters; control by management; seasonality; dividends; conflicts of interest; global financial conditions; and the implementation of the Labour Contract Law in the People's Republic of China in 2008. In addition to the foregoing risk factors, there are also risks related to doing business in China which include, but are not limited to: state ownership; government sector intervention; foreign investment; repatriation of profit and currency conversion; tax; shareholders' rights and enforcement of judgements; developing legal system; protection of intellectual property rights; permits and business licenses; appropriation; and availability of land. Should one or more of these factors materialize, or should our estimates or underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described in forward-looking statements.

We caution that the foregoing list of important factors that may affect our future results, performance or achievements is not exhaustive. When reviewing our forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found under the "Risk Factors" sections in our Annual Information Form and annual MD&A and elsewhere in our filings with Canadian securities regulatory authorities. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. We cannot assure readers that actual results, performance and achievements will be consistent with these forward-looking statements, and the differences may be material. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.

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