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China Advanced Construction Adds 5 New Portable Plants

China Advanced Construction Materials Group (CADC) added five portable ready-mix concrete plants to its existing four plants.

China Advanced Construction Materials Group, Inc. [[CADC.OB]], a provider of ready-mix concrete and related services in China, today announced that it has added five new portable, ready-mix concrete plants. As a result, the company now has 9 portable plants supporting the build-out of China’s national railway network. The new plants are located between railway stations near Qinhuangdao, Yongfu, Hangzhou, Liuzhou and Guilin.

Mr. Xianfu Han, Chairman and Chief Executive Officer, stated, “We continue to generate very strong cash flow, which has allowed us to rapidly expand our network of portable plants. Each of these plants are directly tied to contracts we have recently won and will be operating near capacity. The cost for each plant and associated equipment is approximately $3 million. Each plant is capable of generating over $2 million in revenue per year, with very attractive margins and high return on investment. We are very confident in our ability to win additional railway projects in the near future and expect to add more portable plants to support these contracts.”

The economic stimulus package passed by China’s State Council in November 2008 focuses on infrastructure projects such as new railways, roads, and airports. The country plans to double its investment in railways to about 600 billion yuan (US $87.8 billion) this year according to the Ministry of Railways. Part of the new funds will go to building 5,148 km of new lines, including five passenger-only high-speed lines this year. The ministry also plans to start 70 other new projects this year, which will cost 1.5 trillion yuan (US $219.6 billion) by the time they are finished. By 2012 China is expected to have 110,000 km of rail lines, including 13,000 km of passenger routes, of which, many will be high-speed railways allowing trains to run between 200 and 350 km an hour.

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