China Ceramics Co (NASDAQ:CCCL)

Hengda Ceramics is a leading Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings. The ceramic tiles, sold under the “HD” or “Hengda” brand are available in over two thousand styles, colors and size combinations and are distributed through a network of thirty three exclusive distributors and directly to large property developers. Hengda currently has one production facility with nine manufacturing lines in Jinjiang with an annual capacity of 28 million square meters of ceramic tile and is building, in phases, a twelve line production facility in Gaoan that will have an annual capacity of 42 million square meters of ceramic tiles by the end of 2011. Phase one, which consists of three production lines, is expected to be completed in September 2009. The estimated proceeds from the merger will be utilized to reduce debt associated with this facility. Hengda’s stringent quality management and marketing efforts have created a strong business reputation and high brand awareness as demonstrated by the company receiving recognition from the Central Chinese Government of the coveted “Chinese Well-Known Mark” award. Hengda’s commitment to R&D recently resulted in the development of a new ultra-thin line of products and the company has already been granted 33 design patents and 4 utility patents in China. Although approximately 95% of Hengda’s products are sold domestically, the company has exported products to Japan, Russia, Eastern Europe, South Korea, United Kingdom, Australia, Thailand, Spain, Turkey and Egypt.