TIANJIN CITY, CHINA--(Marketwire -05/03/12)- New Oriental Energy & Chemical Corp. ("NOEC" or the "Company") (NOEC.PK - News) announced today the completion of a Share Exchange Agreement by and among the Company and British Virgin Islands-based Anothen Recycling Company ("Anothen"). Pursuant to the Agreement, Anothen has become a wholly-owned subsidiary of NOEC and the ongoing operations of the Company are now those of the Anothen operating subsidiary, Tianjin Xingyang Package Co., Ltd. ("Xingyang"), based in Tianjin City, The People's Republic of China. Effective with the closing, Mr. Zhang Tongde, 44, Xingyang's founder, CEO and president, has been appointed Chairman of the Board of the Company.
Xingyang is a leading waste paper recycler and manufacturer of corrugated board in China. In 2011, Xingyang recycled and sold 33,000 tons of waste paper which generated revenue of $8.41 million. In the same period, Xingyang also manufactured and sold 45 million square meters of corrugated paperboard, and 20,000 tons of corrugated papers and carbon board, generating revenues of $30.63 million.
"We experienced significant progress in 2011," Mr. Zhang Tongde said, "with record revenues, and rapid growth in particular in our recycling business. During the year, our recycled paper sector accounted for over 21.5% of our revenues for the first time, a percentage we anticipate will be higher in the current year as rapid growth in this sector continues."
Strong Growth Market
Mr. Zhang stated further that management's optimism regarding future growth was based on a number of factors, including the strong growth of the market in which it is operating. He noted, in particular:
- Since 2009, China has surpassed the US and become the biggest manufacturer and consumer of paper and paperboard, accounting for over 24% of world consumption.
- Although average paper and paperboard consumption achieved 148% growth in China over the past 10 years, Chinese paper and paperboard consumption volume to date has been only 25% of consumption in the US
- Over the past five years, corrugated paperboard achieved an 18%-20% annual growth rate and, in 2013, it is expected China will surpass the US and become the biggest market for corrugated paperboard.
- Currently, the paper recycling rate in China is only 38%. This is considerably lower than the worldwide average of 47%, reaching to more than 70% in the developed countries
- The Chinese government has promulgated new rules and regulations to incentivize the paper recycling industry
Tonnage and Revenue Growth
Mr. Zhang continued, "We are extremely pleased to be able to bring to US investors our growth story. We will continue to grow our traditional corrugated paper and paperboard manufacturing and sales business, which we believe will be driven by continuing increasing demand in China. At the same time, we expect to also greatly expand our paper recycling business, which will be driven by growth in both tonnage and revenue in 2012 and beyond."
Information Regarding Forward-Looking Statements
Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.