Orient Paper Acquires Digital Photo Paper Plant Assets

Orient Paper, Baoding, Hebei, China, which controls and operates Hebei Baoding Orient Paper Milling Co., a manufacturer and distributor of diversified paper products in China, has announced the acquisition of digital photo paper plant assets. The company reports that it has agreed to purchase ownership of all assets owned by Hebei Shuangxing Paper Co., including two coating production lines of digital photo paper. The purchase price for the production lines is RMB 93 million (approximately $13.6 million). The company plans to commence operations using the newly acquired equipment in the first quarter of 2010, following completion of maintenance and integration. Orient expects the digital photo paper segment to generate high gross profit margin and substantial net income for fiscal year 2010. It intends to fund the acquisition with proceeds of its recent financing and cash from operations.

"We are pleased to announce our entry into the digital photo paper market. The digital photo paper segment is a high end and profitable market that presents attractive growth potential," said Zhenyong Liu, chairman and CEO of Orient Paper. "We believe the digital photo paper segment will significantly contribute to our revenue and net income growth in fiscal 2010. We maintain a positive growth outlook as we expand our operations and product offering with continued focus on quality and efficiency."

Orient Paper, through its wholly owned subsidiaries, Shengde Holdings and Baoding Shengde Paper Co., controls and operates Hebei Baoding Orient Paper Milling Co. Founded in 1996, HBOP is engaged in the production and distribution of products such as corrugating medium, offset printing paper, writing paper, and other paper and packaging-related products in China. The company uses recycled paper as its primary raw material.