("China Shoto" or "the Group")

 

 

 

China Shoto plc (AIM:CHNS), a leading Chinese producer of industrial batteries and power supply systems, announces that due to increased demand for its power type VRLA batteries which are used for powering electric bicycles, it has decided to expand its manufacturing facility at its wholly owned subsidiary Jiangsu Best Power Supply Co.  The current manufacturing facility will be expanded by some 15,768 square metres and when construction is completed in June 2007 it will then total 43,768 square metres.  Commercial production utilising the newly built facility is expected to commence in September 2007 and this extension will then increase the current production levels of 18,000 units per day to 24,000.  The cost of expanding the manufacturing facility will be circa £1.14 million and this will be met from existing resources.

 

China Shoto expects the electric bicycle market in China will continue to grow.  According to the latest statistics from the Jiangsu Bicycle Association, the production volume of the electric bicycle manufacturers in 2006 increased by more than 78% compared to that of 2005.  The Group believes that this growing demand is generated both by the need for cheap and efficient transportation and the desire to switch to greener alternatives.

 

Cao Guifa, Executive Chairman of China Shoto plc, said: "It is extremely pleasing to see that the Group's strategy of investment into a modern manufacturing facility, specialising in the production of batteries for the electric bicycle market, has been the right one.  Demand within China for electric bicycles continues to grow unabated and this new extension to the facility that we opened last May will accommodate the anticipated market growth, allowing us to further increase our market share and maintain our position as one of the market leaders in this sector."