Asian Citrus is incorporated and has its registered office in Bermuda. The main country of operation is China where all of the plantations are based. The ordinary shares of Asian Citrus have been admitted to trading on the AIM market in London which is regulated by the London Stock Exchange and the Stock Exchange of Hong Kong Limited.
The Group is the largest orange plantation owner and operator in the PRC. It currently owns and operates two orange plantations: the Hepu Plantation in Hepu County in the Guangxi Zhuang Autonomous Region, occupying approximately 30.9 sq.km, and the Xinfeng Plantation in Xinfeng County in Jiangxi province, occupying approximately 37.1 sq.km. The plantations are located in similar latitudes to that of Florida of the US, which is well known for growing oranges. The temperature, solar radiation, soil, water retention and topography of the Group's plantations are favorable for orange plantation.
The Group cultivates and sells two types of oranges: winter (the varieties grown being Navel, Hamlin, Pineapple and Hong Jiang) and summer (principally Valencia). The Group sells its oranges to supermarket chains, corporate customers, wholesalers and sole proprietors in the PRC.
Hepu Plantation is fully developed with approximately 1.3 million orange trees. The Group initiated a replanting programme in the Hepu Plantation to replace existing winter orange trees with new species of summer orange trees that have stronger resistance to disease and produce a higher yield.
Xinfeng Plantation was developed in 2003 and is now fully planted with 1.6 million orange trees. The First commercial harvest started in 2007. The orange trees at the Xinfeng Plantation will progressively achieve their orange bearing age and contribute increasing production volume as they approach fully maturity. As a result, the growth in the production form the Xinfeng Plantation in the coming years will drive a step change in the Group's overall orange supply.
In 2007, the Group signed an agreement with the Dao County Government of Hunan province for the development of the Hunan Plantation with a land area of approximately 35 sq. km with 1.8 million orange trees after completion.
Apart from expanding the size of our plantation with the view toward increasing production of citrus fruits, we also see the opportunity for the Group to invest in value-added processed products where there is significant market demand and potential. On 11 October 2010, the Company announced that a conditional sale and purchase agreement was entered in respect of the acquisition of 92.94% equity interest in Beihai Perfuming Garden Juice Company Limited (¡§Beihai BPG¡¨). The consideration for this acquisition is approximately HK$2.04 billion.
Beihai BPG is a leading producer and wholesaler of tropical fruit juice concentrates in the PRC and processes over ten different varieties of tropical fruits, the most significant types of which include pineapples, passion fruits, lychees, mangoes and papayas. Beihai BPG was also the largest producer of pineapple juice concentrate and lychee juice concentrate between 2007 and 2009 and its current annual output production capacity is estimated to be over 60,000 tonnes. Leveraging on the Company¡¦s leading position in the production of oranges, increasing demand for healthy food in the PRC (including both fruits and fruit juice beverages) due to rapid urbanisation, continuous growth in household income and consumers¡¦ rising health consciousness, we believe the acquisition will enable the Group to generate synergies resulting from the vertical integration of a citrus juice and fruit concentrates business and subsequent expansion into other tropical fruit juice concentrates. After taking into account the leading position and scale of Beihai BPG, we consider the acquisition will allow the Group to expand into the concentrated juice market in the PRC in an effective and efficient way.
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