Sorbic acid and potassium sorbate producer Sorbic International says that the Chinese authorities have said that it will not suffer a financial loss from moving its Inner Mongolian plant.
This news follows the re-zoning of land at Ulanqab City for urban planning. Nearby land has been offered at no cost and there will be compensation for relocation and construction costs. The local authorities have offered to loan money to finance the construction of the plant. Discussions continue.
Sorbic had planned to spend £13.5m on the new plant and had spent £8.2m earlier this year. The plant was due to start production this year and it will take longer for the relocated plant to commence production. There is an existing facility in Linyi.
Revenues rose by one-fifth to £8.3m in the six months to March 2012. There was a small interim loss. There was net cash of £4m.
At 9.5p a share, Sorbic is valued at £4.28m. The net asset value was £16.2m at the end of March 2012.
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