Ultrasonic AG : Construction agreement signed for new factory

Construction agreement signed for new factory

• New five-storey production and eight-storey staff quarter facility for planned expansion of production capacities
• Production capacity of shoe soles increases by approximately 37%
• New facilities enable repatriation of own urban footwear production
• Total investment volume of 2.4 million Euro
• Construction expected to be completed by beginning of 2013

Cologne, 16 January 2012 - Ultrasonic AG, the German holding of an established Chinese manufacturer and provider of high quality branded urban footwear, announces the signing of a construction agreement with a leading local construction company to build the company's new manufacturing facilities in Jinjiang City, at short distance from the company's current production sites. The signing of the agreement facilitates the company's strategy to expand production capacities. The total investment volume for the new buildings is RMB 19.7 million (approx. 2.4 million Euro). Construction of the new facilities is about to begin in February of 2012. The new  factory complex consists of a five-storey production area and eight-storey staff quarters with a total floor space of more than 9,800 sqm. The estimated construction period is about one year, so that Ultrasonic will be able to use the additional capacities as of the year 2013. Ultrasonic will use funds from its cash flow and from the IPO proceeds for the financing of the new premises.

With the construction of the new factory complex and planned additional investments in shoe sole moulding machines, Ultrasonic intends to increase its capacities for the production of shoe soles by 37% from currently around 41 million pairs per year to around 56 million pairs per year. Also, Ultrasonic plans to use the additional space in the new factory to invest in the expansion of its sandals and slippers assembly lines and to acquire new production and assembly lines for the production of urban footwear products. Because of the limited space and capacities in Ultrasonic's actual premises, the production of the company's premium urban footwear products has been outsourced at the time.

"The expansion of our business over the past years makes it necessary to invest in increasing our production capacities. With the continuous success of our urban footwear products, that are currently being sold in 84 mono-labeled and distributor operated stores in 7 different provinces and 2 different municipalities in China, we think that Ultrasonic is moving in the right direction to become the leading Chinese brand for high quality leather shoes", states Qingyong Wu, founder and CEO of Ultrasonic. "Expanding our production capacities enables us to repatriate the production of our urban footwear products. This, in turn, will lead to an increase of our value creation depth and ultimately to a further raise of our profit margins."

For Enquiries:

Ultrasonic AG
Chi Kwong Clifford Chan
Member of the Management Board and CFO
E-Mail:      This e-mail address is being protected from spambots.
Phone: [phone] (China), [phone] (Hong Kong)