Huadi International Group Co., Ltd. Enters into an Investment Agreement with a Songyang County Local Government Owned Enterprise to Build its Smart Factory, “Future Factory”

WENZHOU, July 05, 2023 (GLOBE NEWSWIRE) -- Huadi International Group Co., Ltd. (“HUDI” or the “Company”) (NASDAQ: HUDI), a leading developer and manufacturer of industrial stainless steel seamless pipes and tubes products in China, today announced that Huadi (Songyang) Co., Ltd. (“Huadi Songyang”), a wholly-owned subsidiary of the Company, has entered into an investment agreement (the “Agreement”) with Songyang County Economic Development and Investment Group Co., Ltd. (“Songyang Group”), a Songyang County local government owned enterprise in Zhejiang Province. The Agreement aims to start an advanced “Future Factory” construction project in the Chishou Industrial Zone of southwestern Zhejiang Province, China.

Puruant to the Agreement, the factory will occupy approximately 50 acres with a total investment of approximately RMB1 billion, including fixed asset investments of over RMB620 million. HUDI plans to finance the project primarily via its working capital. Huadi Songyang has officially obtained the rights to use the first portion of 26 acres of land from Songyang Economic Development Zone on June 30, 2023, for the construction of the Future Factory project.

The Future Factory project, equipped with digital production line facilities, is expected to produce 60,000 tons of stainless steel seamless tubes and special alloy steel products annually, including 300 series, 400 series, 600 series, and 800 series. The project will be constructed in two phases, with the first phase building the factory over approximately 26 acres which will commence from December 1, 2023 to November 30, 2026, and the second phase, building the factory over approximately 24 acres which will be completed within 36 months after the land meets the construction requirements.

Pursuant to the Agreement, the Songyang County local government has authorized Songyang Group to provide a series of supportive policies for the construction of the Future Factory project, including a total of RMB 15 million in infrastructure construction subsidies to be granted to Huadi Songyang upon completion of all fixed asset investments within the agreed period. Additionally, Huadi Songyang will enjoy infrastructure construction subsidies after meeting tax requirements for eight years following the factory’s completion. Other benefits include equipment investment incentives, rewards for obtaining the intelligent manufacturing title, rewards for utilizing foreign investment effectively, and incentives for attracting top managerial talents.