(Source: PRNewswire-FirstCall)
DEERFIELD BEACH, Fla., Sept. 17 /PRNewswire-FirstCall/ -- China Direct, Inc. , a U.S. company that owns controlling stakes in a diversified portfolio of Chinese entities and assists Chinese businesses in accessing the U.S. capital markets, announced today that it previously disclosed joint venture, CDI (Beijing) International Trading Co., Ltd., ("CDI Beijing") was granted a business license by the Chinese government to engage in the distribution of steel and lumber products in China. Under the terms of the previously disclosed joint venture agreement, CDI Shanghai Management Co., Ltd. ("CDI Shanghai"), a wholly owned subsidiary of China Direct, will invest approximately $3.73 million in CDI (Beijing) to obtain a 51% interest in the joint venture. CDI Shanghai made its initial investment of $750,000 and will contribute the remaining $2.98 million to CDI Beijing on or before June 30, 2009.
CDI Beijing will distribute to end users in China and abroad a variety of basic material products including steel and wood for various suppliers. Management believes CDI Beijing can vertically integrate with our zinc, lead and magnesium operations by providing additional sales and distribution relationships. Management is confident in CDI Beijing's management team, which has built a network of relationships in a number of domestic and foreign markets, and anticipates CDI Beijing's operations will begin contributing to China Direct's bottom line as soon as the fourth quarter of 2008. In addition to being a strong contributor to performance in 2009 from its distribution of steel and wood products, CDI Beijing is seen by management as having the ability to increase performance in its zinc, lead and magnesium operations by leveraging its customer relationship base which adds potential new sales channels. China Direct intends make every effort to maximize the potential distribution synergies among our various portfolio companies.
Dr. James Wang, CEO and Chairman of China Direct, indicated, "We are pleased to welcome CDI Beijing into the China Direct family as we continue to expand our Basic Materials Segment. We are confident CDI Beijing will be accretive to our financial performance in the fourth quarter of 2008 and into 2009. The formation of CDI Beijing is part of our strategic plan to grow our basic materials segment to $200 million in revenue in 2009. We anticipate maximizing the customer relationships developed by CDI Beijing management in growing these new product lines to our basic materials segment.
