CALCOL INC. (CLCL-OTC) Beijing, China and Cleveland, Ohio April 3, 2003: (PSNews--Pinksheets News Service) For Immediate Release: CALCOL INC. which previously announced the closure of a private placement for 10.3 million(TEN MILLION THREE HUNDRED THOUSAND) shares of restricted common stock (par value $.001) to accredited, institutional and overseas investors in January 2003 for a total financing of USD$1.03 million (ONE MILLION AND THIRTY THOUSAND) dollars, announced today April 3, 2003 that it had placed an additional 6 (SIX) million common shares of restricted comon stock (par value $.001) to an accredited, institutional, overseas investor for an additional $1.25 million dollars (ONE MILLION TWO HUNDRED AND FIFTY THOUSAND DOLLARS) for a total private placement this year of 16.3 million common shares for a total of $2.28(TWO MILLION TWO HUNDRED AND EIGHTY THOUSAND) million USD. The Company placed the shares directly with previous and new accredited, institutional, and overseas investors known to the Company and no finder's fees or commissions were paid on the private placements and the company estimates that in excess of 90% of the funds raised will be directly invested in CALCOL's Sanhe Meile Soft Drinks Co. Ltd. in Beijing. According to CALCOL's CEO Norman C. Kaplan, who recently was interviewed on CEOCAST.COM and WALLSTREETREPORTER.COM, "These funds will enable the company to thrust forward quickly across the goal line of becoming the third largest soft drink concentrate maker and bottler in China. With a Chinese national business license (posted on our website www.calcol.com) to invest up to $30 (THIRTY) million USD in the soft drink industry in China, we are very excited that our first bottling line will be fully operational in June of this year, that we can make 6 (SIX) million standard cases per year in the first year and we believe can easily sell that many---that we can add a high speed canning line and a medium speed bottling line to our Beijing factory within a year or two--and open a second factory in the South of China next year in Guangdong Province to service Shenzhen, Zhuhai, Macao, Guangzhou, and Hong Kong, and all of Guangdong Province--and a third factory in the middle of China within two years to service Jiangsu Province, including Soochow, Hangkow, Nanjing and Shanghai. We also are in serious discussions to license MALIBU COLA to a number of independent bottlers in China of which there are more than 70 companies, who can bottle our concentrate and use our trademarked Chinese namebrand and labels under license.
MALIBU-COLA: "THE REAL COLA TASTE"
CALCOL, INC. is a U.S. holding company for Chinese investments and businesses in pharmaceutical and soft drinks businesses. CALCOL has a 60% interest in Calcol Changbaishan Pharmaceutical Company Ltd. of Shenzhen, which makes and sells forty different pharmaceutical products in China, and an 80% interest in Sanhe Mei-Le Soft Drinks Company Ltd., which makes and sells soft drink concentrates, syrups and finished bottled beverages under the Chinese trademark MALIBU ("MEI-LE-BAO"). The Company also does business as MALIBU FLAVOURS, and The Malibu-Cola Company of Beijing.
HISTORICAL BUSINESS INFORMATION: As of April 15, 2002, the Sanhe Meile Soft Drinks Company subsidiary of CALCOL INC. had registered capital of US$10.0 million and paid-in capital of $4.288 million, in the form of land, buildings and equipment. The business license, jv approval certificate, and sanitary permits are posted on the Company's website www.calcol.com. The Company's financial statement (recent audit of Sanhe Meile Soft Drinks Co. Ltd.) is posted on www.pinksheets.com. CALCOL INC. also had reported additionally that it had paid a deposit of US$560,705 (not shown on the audit as equipment has not yet arrived in China) towards the purchase of a bottling line to manufacture carbonated soft drinks, tea products and bottled water. CALCOL INC. reported raising investment capital through private placement of its securities to accredited, institutional and/or overseas investors of $1.0 million USD in 2002, and an additional $1.03 million USD in January 2003, and an additional $1.25 million USD in April 2003.The additional investment capital will be certified in the capital certification anticipated to be completed by the Chinese Langfang auditors before April 2003 and when equipment arrives in China and is installed into the factory. As of January 31, 2003, CALCOL INC. reported it had paid 90% of the purchase price for the manufacture, delivery, installation and commissioning of a complete bottling line to manufacture up to 6 million standard cases per year of carbonated soft drinks, ice tea products, and bottled water to be fully operational in June 2003; had begun installation of its water treatment equipment; and had entered into a purchase contract for a complete syrup room to be installed and fully commissioned in its bottling plant at the same time as the bottling equipment is fully commissioned. While its bottling plant is nearing completion, CALCOL INC. is, and has been for the past 2 years, manufacturing soft drink concentrate at its own concentrate plant on-site, and bottling its MALIBU-COLA finished carbonated soft drink products through contract packing at local bottling companies nearby. It will begin bottling its own products on the Sanhe site in June 2003. It is about to introduce MALIBU VERRY CHERRY COLA to the Chinese market, as well as to achieve much wider national distribution of its MALIBU COLA, MALIBU SUNRISE ORANGE, and MALIBU SURF'S UP LEMON LIME which it plans to introduce in 600 ml PET bottles as well as 355 ml cans in the Spring and Summer season 2003.
Malibu Flavours, CALCOL's soft drink concentrate plant in Beijing, China, opened in late 2001. Malibu Flavours is fully approved and licensed by the Chinese government to produce soft drink concentrates, syrups and finished bottled beverages under its own Chinese trademark pending brand names of Malibu-Cola, Malibu Sunrise Orange, Malibu Surf's Up Lemon Lime and other bottler brands in China. CALCOL plans to introduce Malibu Sparkle Green Apple, Malibu Verry Cherry Cola, and Malibu Lemon Squeeze, as well as Malibu Sun-Tea and Malibu Springs Water in 2003 (Chinese and US trademarks pending). The ingredients and formulas for the manufacture of the concentrates, syrups and bottling are supplied under license from an American bottling company.
According to the CALCOL's Vice President Mr. Ji Jun who stated recently: "Over the past six months our sales and distribution manager and I visited 4 different provinces (Guangdong, Heilongjong, Jilin, and Shandong) and 6 cities (Shenzhen, Beijing, Tianjin, Harbin, Changchun, and Weifang) and we met with the top executives of 7 different supermarket chains, and 11 different food and beverage distribution companies. So far this month, we have confirmed written orders from one supermarket chain of 130 medium sized supermarkets in the Tianjin/ Greater Beijing area. For the initial order, they have asked us to supply them immediately with 1500 cases (18000 x 1.25 Liter bottles), 1/3rd each of MALIBU-COLA, MALIBU SUNRISE ORANGE, and MALIBU SURF'S UP LEMON LIME for delivery next week. The supermarket chains settle accounts monthly, and pay within 30-45 days. This supermarket chain has an excellent credit rating, we have a good working relationship with their management, they have has indicated that if the products sell well at their introduction this month, a peak selling month leading up to Chinese New Year's, they will take much more product in December and January and then carry our products in all their stores throughout the year. This supermarket chain has committed to "end -of -the- aisles promotions" in all their stores. Next week we expect to finalize confirmed written orders for preliminary order indications that we already have from two other supermarket chains (one with about 80 hypermarkets, another with 60 medium sized supermarkets) in the Greater Beijing/Tianjin area for 1500 cases (18000 x 1.25 liter bottles) each for a total of 3000 cases, on a similar basis to the other supermarket chain; that if the products sell well at their introduction, they will take much more over the next several months of the Chinese New Year's peak selling season and carry our products throughout their stores on a regular basis. We are going to ask for "end of aisles promotions" from these stores as well, and will provide posters to the stores. We have confirmed written orders from 3 distributors: two in Manchuria and one in Shandong. The distributors pay cash on delivery, and all three have good credit ratings and are well known to us. The two distributors in Manchuria have each committed to purchase immediately 1500 cases (18000 x 1.25 liter bottles) of the three flavors or 3000 cases total; the distributor in Shandong has committed to purchase immediately 1000 cases (12000 bottles) of mixed flavors. We expect to complete these deliveries and sales also by the end of next week. Therefore, of our current inventory of 6300 cases (76,000 x 1.25 Liter bottles) of MALIBU-COLA and 3300 cases each of MALIBU SURF'S UP LEMON LIME and MALIBU SUNRISE ORANGE (80,000 x 1.25 Liter bottles) or a total of 12900 cases (156,000 x 1.25 Liter bottles): we have already confirmed written orders for 5500 cases for delivery next week. AND, from the other customers, we have preliminary order indications pending written confirmation next week, for an additional 3000 cases. Therefore of our current inventory of 12,900 cases (156,000 x 1.25 Liter bottles) we will by the end of next have already sold 8500 cases (102,000 x 1.25 Liter bottles) Therefore we are projecting from December 2002-May 1, 2003 the following amount of sales (assuming that reorders and new customers are as indicated above):7-10 turns of an equal amount which would be 700,000-1,000,000 x 1.25 Liter bottles2/3rds to the supermarket chains, 1/3rd to the distributors, which would account for 145,000-208,000 standard cases which is in line with the projections we made in our various press releases. We expect to be net cash flow positive in the year 2003; and we are very excited that with the Summer high season coming we should be able to meet the demand for MALIBU COLA and our other MALIBU brands which is very high as well as license the brand and sell concentrate throughout China to many of the local bottlers who have been hurt by pressure from the two giant US cola companies. If you have further questions, please do not hesitate to contact me."
Sanhe Meile Soft Drinks Co. Ltd. is 80%-owned by CALCOL INC. and 20% owned by the China National Food Industry Corporation. The co-operation, which began in 1995, is licensed for thirty years until September 13, 2025 on a 40,000-square-meter site in Sanhe, a suburb thirty-four kilometers due east of Beijing on the JingHa Highway.
CALCOL's soft drink concentrate plant is projected to finish up to 800,000 units of concentrate (enough to bottle 1.68 BILLION liters of finished carbonated soft drinks) annually for sale to independent local (non-franchised) bottlers and CALCOL's company owned bottling plants in Beijing in the North and those to be established in Southern and Middle China.
CALCOL's independent bottling plants will manufacture for the Chinese market Malibu-Cola and other Malibu Flavours, iced tea products and bottled water under Sanhe Meile Soft Drink Company's own MALIBU brand names.
Upon the completion of the bottling plant, in addition to the soft drink concentrate manufacture and sale, CALCOL's Sanhe Meile Soft Drinks Co. Ltd. expects to have an annual on-site production capacity of 6-26 million standard cases (commencing with 6 million standard cases on-site in the first year of full production, with greater production capacity possible through additional planned bottling equipment installations and contract packing) of finished PET bottles and cans in various sizes of carbonated soft drinks, sports drinks, and fruit flavored and herbal enriched ice tea products as well as bottled water. CALCOL plans to build additional plants in the Guangdong and Shanghai areas under its Chinese business license within the next 2-3 years.
China is now the third largest consuming market for soft drinks in the world. Half of the bottling companies are independent local bottlers. CALCOL's Sanhe Meile Soft Drinks Company holds the third business license for foreign branded soft drinks in China.
CALCOL has scheduled the grand opening of its company owned soft drink bottling plant (110,000 square feet) in June 2003 on the same complex in Beijing. On December 18, 2002 CALCOL INC. entered into a contract for the purchase of a complete bottling line from Melegari SPA of Parma, Italy and has paid 90% of the cost of the line as of January 31, 2003. The bottling line, which can produce 6 million standard cases per year, is scheduled for delivery, installation and commissioning in May 2003. As of January 2003, CALCOL had begun installation of its water pools and water treatment equipment for the bottling plant, and has contracted for and scheduled installation of the complete syrup room facilities for the bottling plant in April- May 2003. CALCOL reported raising investment capital of $1.00 million USD in 2002 by private placement of its common stock (restricted upon transfer) to accredited, institutional and/or overseas investors; and has closed an additional $2.28 million USD private financing through the sale and issuance of restricted common stock through private placement to accredited, institutional and/or overseas investors in the first quarter of 2003. While its bottling plant is under construction and nearing final completion,CALCOL INC. is bottling under contract packing through other bottling plants in China. CALCOL has achieved very wide distribution and sales in the Beijing and Tianjin areas in several large (150 or more) medium sized supermarket chains, and is in serious discussions and negotiations with major international hypermarket chains who are expanding rapidly in China. Projected sales for the 2003 fiscal year are between five and six million standard cases. Projected sales in the 2004 fiscal year may be expected to be double that. CALCOL's Malibu Cola Company of Beijing will be a fully integrated and fully operational concentrate making, syrup making, and bottling plant by June of 2003 in time for this years summer soft drink season.
As of April 15, 2002, CALCOL INC. has received the annual renewal of its China business license No. 0461929 through its 80% Chinese subsidiary Sanhe Meile Soft Drinks Co. Ltd. for the manufacture of foreign branded soft drinks concentrates, syrups, finished bottled beverages, juice products, and tea products. The license expires on September 13, 2025. The registered capital of the enterprise is US$10 million dollars, with paid in capital as of April 15, 2002 of US$4.288 million. New capital certification is planned to be prepared by Chinese government auditors showing the additional investment in cash and equipment in Spring 2003. CALCOL INC. also received, on April 15, 2002, renewal of its Chinese JV Certificate of Approval, Sanitary Permit, Operating Permit, and Bar Codes (and subsequently sanitary permits for the various cities and provinces where its finished beverage products are currently widely distributed and marketed). CALCOL INC. has Chinese and US trademarks pending for Malibu-Cola, Malibu Sunrise Orange, Malibu Surf's Up Lemon Lime and the other MALIBU brand flavors and products scheduled for introduction this year.
CALCOL INC. (Del.) common stock (par value $.001) trades OTC in the United States under the symbol "CLCL" (cusip No. 12869910). CALCOL INC. has 100 million common shares authorized, approximately 97 million common shares currently issued and outstanding; 10 million preferred shares (par value $1.00) authorized, no preferred shares issued and outstanding.
CALCOL INC. common stock involves a high degree of risk and is suitable only for accredited, overseas, or institutional investors who are able to assess the risk, and can afford to lose their entire investment. This announcement is for information only, contains forward looking statements which should not be relied upon in any investment decision, and is not an offer to buy or sell securities.
For further information, contact: Mr. Ji Jun, Vice President CALCOL INC. and President, Sanhe Meile Soft Drinks Co. Ltd. and Malibu Flavours, Beijing East Yanjiao Economical & Technical Development Zone, Beijing China 101601. Tel: 011-86-10-6159-2415. Fax: 011-86-10-6159-2166.
http://www.calcol.com
http://www.malibu-cola.com.cn
CONTACT: CALCOL INC.
Mr. Ji Jun, VP CALCOL INC., President, Sanhe Meile Soft Drinks Co. Ltd. 011-86-10-6159-2415
jijunhere@hotmail.com
Mr. Norman C. Kaplan,
Chairman and President, CALCOL INC.
Chairman, Sanhe Meile Soft Drinks Co. Ltd.
216-514-0849
calcol@aol.com
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