SkyPeople Juice Group, a China-based subsidiary of SkyPeople Fruit Juice, has entered into an investment agreement with the Managing Committee of Mei County National Kiwi Fruit Wholesale Trading Center in China.
The move is in line of SkyPeople's strategy to locate its manufacturing centers near fruit growing centers to optimize the utilization of fruit while minimizing transportation costs.
Under the agreement, the company will develop production lines for kiwi puree, kiwi fruit juice, frozen specialty fruit and vegetable products and other kiwi related products along with a food safety inspection center.
The project will need an estimated capital investment of RMB294.3m ($47.5m) for a 150mu (24.7 acres) land.
The project will also comprise the development of a kiwi-related materials trading zone to include a trading mall, fruit trading shelter and fruit-related materials trading shelter.
It will require a 136mu (22.4 acres) land with an estimated capital investment of RMB151.3m ($24.4m).
Along with this, the company will also have to pay a land grant fee of RMB300,000 ($48,361.50) per mu to the committee in two installments following the closing of the Agreement between the Committee and the company.
SkyPeople chief executive officer Hongke Xue said that the project increases the company's existing manufacturing stock of kiwi-related products and possess the capability to benefit from the kiwi producing areas in China while strengthening a core product category for the company.
"We believe that the agreement with the Government of Mei County will be of significant benefit to both parties and will generate a sound return on investment for the Company," Xue added.
SkyPeople plans to use its existing marketing infrastructure and distribution channels to market the products.
