China Ceramics has completed the expansion of its Hengda facility. The facility is now capable of producing 42 million square meters of ceramic tiles per year, up from 32 million square meters in the second quarter of 2011 and an increase from 28 million square meters as of year-end 2010. The Company expects that the new capacity at Hengda will ramp-up to full utilization in about three months. The new equipment at Hengda will include new kiln and advanced stone-breaking equipment that will make operations more efficient. China Ceramics' current total annual production capacity of ceramic tiles is now 52 million square meters, consisting of 42 million square meters from Hengda and 10 million square meters from Hengdali. After the completion of Phase II at Hengdali by the end of 2011, China Ceramics expects to have a total annual production capacity of approximately 72 million square meters of ceramic tiles. This is expected to be composed of 42 million square meters of total capacity from the Hengda facility and 30 million square meters of total capacity from the Hengdali facility.
The Company's backlog of orders for delivery in the third quarter of 2011 is approximately US$ 61.9 million, representing a year-over-year growth rate of 36.1% compared to the third quarter of 2010. The Company estimates that its sales volume of ceramic tiles in the third quarter of 2011 will be approximately 14.6 million square meters.
In order to enhance transparency, the Company recently posted its 2010 annual SAIC reports for its two subsidiaries, Jinjiang Hengda Ceramics Co., Ltd. and Jiangxi Hengdali Ceramic Materials Co., Ltd. Translated English copies of the Chinese SAIC reports have been uploaded to the website to make it investor accessible for non-Chinese speaking shareholders. "We value the importance of transparency and are committed to a high level of corporate governance. In light of the heightened scrutiny of China-based companies listed in the US capital markets, we seek to differentiate ourselves by providing financial information beyond our disclosure requirements. We hope that our continued operating performance and added transparency will convey our commitment to our shareholders and bolster confidence in the Company."