ALLENTOWN, Pa., April 16, 2019 /PRNewswire/ -- Fuling Global Inc.
(NASDAQ: FORK) ("Fuling Global" or the "Company"), a specialized
producer and distributor of plastic and paper service ware, with
manufacturing facilities in the U.S., Mexico and China, announced today that its Chief
Executive Officer, Mr. Xinfu Hu,
released an open letter to investors. The letter is
included in its entirety below:
*****
A Letter to Fuling Global Inc.'s
Investors
To our valued investors:
I would like to thank all investors for your continued support
of Fuling's development and your faith in our shared future. I
would like to take this opportunity to summarize our achievements
since our successful IPO in November
2015, discuss our Mexico
factory plan addressing the current international trade environment
and our environmental protection solutions.
I. Our achievements
Revenue grew at an annual compound rate of 14.35% to
$142.20 million in 2018, up from
$83.18 million in 2014. For the four
years ending 2018, the company realized a total after-tax profit of
$31.79 million.
We invested most of our $20
million IPO proceeds in our new Wenling factory. The total
investment of this new factory reached $58.95 million. This included the purchase of
land use rights of 32.45 acres (197 mu) of land, the construction
of 25 acres of new factory, dormitories and office space, more than
200 new production machines, and
3,670 KW rooftop photovoltaic power system.
In four years, our sales volume doubled from 25 million KG to
almost 50 million KG. We have doubled our production
capacity, increased total customers from 129 to 151, registered 18
patents, and transitioned our product line to include both plastic
and paper products to address and anticipate evolving customer
needs.
II. Mexico factory
As an enterprise exporting most of our products to the United States, we face serious challenges
from the many changes implemented
in trade agreements between China
and the United States. After the
U.S. announced tariffs on some Chinese products exported to
the United States, we decided to
establish a factory in Monterey, Mexico, a city near the U.S. - Mexico border to mitigate these trade risks.
We chose Mexico for the following
reasons:
1. The United States is our
largest market. Setting up a factory near the United States instead of in other areas
reduces our transportation costs and speeds up product
delivery.
2. The recently signed U.S.-Mexico-Canada Free Trade Agreement
levies zero tariffs on qualified products.
3. Mexico, with a population of
nearly 140 million, is the second most populous country in
Latin America. Our Mexican factory
may provide a good opportunity for us to enter the Latin American
market.
4. More importantly, Mexico
provides preferential policies to attract investment, such as the
SHELTER method and IMMEX process for import and export. Operating
the Mexico factory with our
American factory management team will allow us to take advantage of
these policies.
At present, we have chosen the production site and leased a
building to be built out for the Mexico factory. Production equipment were
transported from China has arrived
in Mexico. We are in the process
of preparing the relevant management, technology and production
personnel. The factory is scheduled to start production in
June 2019.
This plan will help reduce much of the impact of the China-US
trade changes and increase our global market opportunities.
III. Environmental protection actions
As an enterprise specializing in producing disposable
serviceware, environmental protection has always been a major
consideration in developing and manufacturing our products.
1. Eight years ago, we cooperated with the Institute of Physics
and Chemistry of the Chinese Academy of Sciences to set up the
first academician workstation in Wenling for research in
biodegradable materials. We have obtained various proprietary core
technologies and several BPI ("Biodegradable Products Institute")
certificates. Fuling has been a leading force in using
biodegradable materials in the industry, and we are optimistic for
the long-term future of this part of our industry. Investors should
be patient because, at present, usage of such materials constitutes
only a few percentage points due to limitations in present demand
as discussed below. Most of these materials are plant or
starch based which limits the supply and competes with food supply
to humans and animals. Because of the similarity to regular
plastics, general consumers cannot distinguish between regular
plastic and biodegradable materials. As such, consumers don't
currently demand biodegradable materials and, when they receive
biodegradables, don't recycle them as reliably as we might
hope. The substantially higher cost of these materials also
slows acceptance by the general public. We believe this
transition to biodegradable materials will continue but we don't
anticipate that its usage will exceed 20% in the next ten
years.
2. We have the license to produce several patented cup caps
without using straws. At the same time, we have increased the
production of paper straws. We currently produce 5 million paper
straws per day, accounting for 20% of our total daily straw
output.
3. We are also developing a plastics recycling process. Because
of the high cost of plastic recycling for recyclers, the recycling
rate of plastic disposables is low. Through a lot of research, we
have formed our own environmental protection solutions. Since we
are a supplier of several major Quick Service Restaurants ("QSRs")
in the United States, we plan to start proposing these solutions
in the fast food industry:
(1) We and other suppliers use polypropylene as the raw
materials of the plastic serviceware, so the ultimate plastic waste
will be in the same material for the convenience of recycling.
(2) We will provide cleaning and granulation equipment with
technical support to garbage recycling companies.
(3) After the plastic waste has been properly treated by these
recycling companies, it will be used to produce outdoor furniture
and gardening products.
Our solutions will be attractive to our QSR customers by
allowing them to recycle their plastic garbage with low cost and
help improve their corporate images as well.
Conclusion
Supported with production bases in Wenling, China, Pennsylvania, U.S., and Monterrey, Mexico, a full suite of plastic and
paper serviceware products, a diversified global customer base, and
highly recognized brand names, we firmly believe that we now have
the resources to support strong growth. We will continue to expand
the sales and distribution channels, use e-commerce to carry out
online and offline synchronous operations, and strengthen our
relationships with existing customers while exploring new market
opportunities.
On behalf of our Board of Directors and senior management team,
I thank you again for your confidence and interest in Fuling
Global. You have been a critical factor in our growth. We are
confident that we can work together to build a better future.
We also ask for your continuing support of our transformation
effort, as we reshape our business model and bring profitable
returns for you, our shareholders.
Sincerely,
Mr. Xinfu Hu
CEO, Fuling Global Inc.
April 16, 2019
For a copy of this letter and more information about the
Company, please visit the Company's website:
http://ir.fulingglobal.com/.
*****
About Fuling Global Inc.
Fuling Global Inc. ("Fuling Global") is a specialized producer
and distributor of plastic and paper serviceware, with precision
manufacturing facilities in both the U.S., Mexico and China. The Company's plastic and paper
serviceware products include disposable cutlery, drinking straws,
cups, plates and other plastic products and are used by more than
one hundred customers primarily from the U.S. and Europe, including Subway, Wendy's, Burger
King, Taco Bell, KFC (China only),
Walmart, and McKesson. More information about the Company can be
found at: http://ir.fulingglobal.com/.
Forward-Looking Statements
This press release contains information about Fuling Global's
view of its future expectations, plans and prospects that
constitute forward-looking statements. Actual results may differ
materially from historical results or those indicated by these
forward-looking statements as a result of a variety of factors
including, but not limited to, risks and uncertainties associated
with its ability to raise additional funding, its ability to
maintain and grow its business, variability of operating results,
its ability to maintain and enhance its brand, its development and
introduction of new products and services, the successful
integration of acquired companies, technologies and assets into its
portfolio of software and services, marketing and other business
development initiatives, competition in the industry, general
government regulation, economic conditions, dependence on key
personnel, the ability to attract, hire and retain personnel who
possess the technical skills and experience necessary to meet the
requirements of its clients, its
ability to protect its intellectual property, and its ability to work with other parties to
implement any recycling solutions. Fuling Global encourages
you to review other factors that may affect its future results in
Fuling Global's annual report and in its other filings with the
Securities and Exchange Commission.
For more information, please contact:
At the Company:
Gilbert
Lee, CFO
Email: glee@fulingusa.com
Phone: +1-610-366-8070 x1835
Web: http://ir.fulingglobal.com/
Investor Relations:
Tony
Tian, CFA
Weitian Group LLC
Email: ttian@weitianco.com
Phone: +1-732-910-9692
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SOURCE Fuling Global Inc.