NEW YORK — Asia Carbon Industries Inc. (OTCBB: ACRB) on Jan. 25 announced its completion of two infrastructure projects: a gas pipeline and naphthalene oil processing facility.
Gas Pipeline Project
The Gas Pipeline Project will enable the company to use natural gas as fuel for production instead of coal tar oil. Using natural gas as fuel is far cleaner than coal tar oil, the traditional fuel. The Company invested approximately $2.5 million (approximately 16 million Renminbi (“RMB”) for the construction of the pipeline, which was initiated in June of 2011, and completed in December 2011.
Utilization of natural gas will not only result in fewer emissions, it will also reduce the Company’s energy costs. Management estimates the savings associated with the switch will be approximately $1.5 million (approximately 9.6 million RMB) per year, when operating at full capacity.
Naphthalene Oil Process Project
Asia Carbon began selling Naphthalene oil, a by-product of the carbon black production process in July, 2011. As demand continued to grow, the Company decided to increase its refining and storage capacity. Asia Carbon invested approximately $3 million (approximately 18.6 million RMB) in the facility which has the capacity to process an additional 2,400 tons naphthalene per year. Construction was completed in December 2011. At the current pricing, this Naphthalene project would contribute approximately $1.7 million in revenue, at full capacity.
Ms. Yao Guoyun, Asia Carbon’s Chairwoman of the Board and Chief Executive Officer, commented, “We are very pleased to announce the completion of both gas pipeline and naphthalene projects at the end of 2011, as they represent an important step in our expansion plans for Asia Carbon. Together, these projects are expected to increase revenues and improve margins going forward. This contribution will also help us to offset any negative impact from increases in raw material pricing.”
Ms. Yao went on to say, “In order to facilitate our ability to meet the growing demand for our product, we are building a new 3,700 square meters (approximately 40,000 square feet) warehouse for our carbon black products. We estimate the cost for this warehouse will be approximately US$1 million and anticipate construction will be completed by the end of the first quarter 2012.”