Dukang Distillers

Dukang Distillers: Grp announced that it is proposing to undertake an internal restructuring exercise to fully integrate the business and operations of its subsidiaries, Henan Trump Dragon Siwu Wine and Luoyang Dukang Holdings and its subsidiaries which produces its Siwu & Dukang brand of Baijiu respectively. The exercise aims to: 1) Streamline the Group’s operations and structure with better utilisation of the existing Luoyang Dukang group’s production facilities by consolidating the production facilities of “Siwu” baijiu with that of “Dukang” baijiu and enable the sales and marketing of “Siwu” baijiu products to tap into the wider sales channels of Luoyang Dukang, to achieve higher operational efficiency and improve production capacity; 2) Address the issue of future expansion plans of Henan Siwu’s production capacity. Currently, Henan Siwu’s production facilities are located at Henan, Zhoukou City. Due to urban planning and redevelopment undertaken by the local PRC authority at Henan, Zhoukou City, the neigbouring parcels of land are largely being used for commercial and residential purposes. Availability of industrial land for Henan Siwu to expand its production facilities is limited; 3) Address the issue of traffic congestion at Henan, Zhoukou City brought about by urbanization which affects the transportation logistics of “Siwu” baijiu products. This will indirectly drive up Henan Siwu’s cost of operations. The Restructuring Exercise is not expected to have any significant material impact on the NTA or EPS on Dukang for FY12.