Junan County, Shandong, China, July 10 - American Lorain Corporation ("American Lorain" or the "Company"), an international packaged foods company based in Shandong Province, People's Republic of China ("PRC"), today announced that it has won a bid to enter into a two-year contract with Yum! Restaurants Consulting (Shanghai) Co., Ltd., to distribute a variety of food products for Yum! China Division's subsidiaries Kentucky Fried Chicken (KFC) and Pizza Hut in China.
The potential distribution contract will enhance the existing relationship between American Lorain and Yum! China Division. Building upon its existing business relationship with Yum! China Division, which was established in 2006, with the distribution of French fries to distribution centers located in Zhengzhou in Henan Province, which generated $680,000 in sales for 2007 and $350,000 in sales for 2006 for American Lorain, the parties have agreed to enter into a more extensive distribution contract. The potential contract, which is intended to cover the period from September 2008 to August 2010, is expected to generate well over $20 million in revenues for American Lorain.
The potential two-year distribution contract, which represents 12.1% of Yum! China Divisions' total imported sales of frozen food products to China, will allow American Lorain to distribute food products on behalf of KFC and Pizza Hut. The Company will distribute products such as cheese, corn cobs, waffle crispers, onion rings, string cheese and potato sticks to regions such as Zhengzhou in Henan Province, Qingdao in Shandong Province and Beijing.
"The success of American Lorain in winning the bid for the two-year distribution contract with Yum! China Division indicates not only that we have done a great job with KFC and Pizza Hut in the past but also exhibits the confidence that large international companies such as Yum! Brands have in our distribution network and services," said Mr. Si Chen, Chairman and CEO of American Lorain. "This contract boosts our confidence in generating revenues from our distribution network and services, which until now have represented only a small portion of our total revenues," added Mr. Chen.
Yum! China Division
Yum! China Division (includes mainland China, Thailand and KFC Taiwan), is a wholly owned subsidiary of Yum! Brands, the world's largest restaurant company in terms of system restaurants, with more than 35,000 restaurants in more than 110 countries and territories. Yum! China Division is based in Shanghai, China. Yum! Brands consist of five brands and they are, A&W All American Food, KFC, Long John Silver's, Pizza Hut and Taco Bell. Yum! China Division, comprises of KFC and Pizza Hut brands, and to a lesser extent East Dawning, the Company's Chinese quick-service restaurant brand. At Q1 2008, Yum! China Division had more than 3,100 system restaurants.
About American Lorain Corp.
Shandong Lorain, an indirectly owned subsidiary of American Lorain Corp., was founded by Mr. Si Chen, CEO of American Lorain, in Shandong Province, People's Republic of China, in 1995. When American Lorain started its operations in 1995, the Company sold chestnut products. However, in 2002, the Company entered the canned, frozen and bulk foods packaged market and in 2004, the Company entered the convenience foods packaged market. Although, the Company's chestnut products are mostly for sales to international markets, the convenience food, and frozen, canned and bulk food products are for sale in the domestic market, in China.