PINGDINGSHAN, China--(BUSINESS WIRE)--Yulong Eco-Materials Limited (NasdaqCM: YECO), an eco-friendly building products and construction waste management company, today announced that the Department of Transportation of Henan Province (the “Department”) gave final approval for the Company’s provincial technical code established to govern the use of recycled construction waste materials in the production of roadbed – a road’s foundation.
Following this approval, the code will be revised according to the Department’s recommendation and is expected to be published within two months. Once published, the code will become the standard code for the road construction industry in Henan Province, and will allow the Company to begin the sale of its recycled waste as roadbed material for highways, expressways and other road paving projects in Henan Province. Currently the Company is actively negotiating with large local road and highway builders, and expects to announce the signing of several contracts shortly after the code is published.
Mr. Yulong Zhu, Yulong’s CEO, noted, “To date, we have received positive feedback from all road and highway construction companies we are negotiating with, and I believe that we can sell all of our current recycled waste inventory before 2016 fiscal year-end. We estimate that revenue generated from the sale of the recycled construction waste in fiscal 2016 will contribute more than $5 million to our top line, in addition to revenue we are already generating from the hauling and recycling of construction waste. Combined revenue generated from our overall construction waste management (“CWM”) business, which includes the sale of recycled waste, and the hauling and recycling of construction waste, is expected to represent over 20% of Yulong’s total revenue in fiscal 2016. Furthermore, because CWM is a high margin segment of our business, with approximate gross margins of over 70%, we expect our bottom line for fiscal 2016 to substantially improve as compared to fiscal 2015. Specifically, for fiscal 2016, the sale of recycled waste alone is expected to contribute over $4 million to our bottom line. We expect the same trend to continue in fiscal 2017, due to several long-term construction waste management projects we recently commenced. We are also looking to expand our business, especially the CWM segment in other cities within Henan Province in this calendar year.”
About Yulong Eco-Materials
Yulong is a vertically integrated manufacturer of eco-friendly building products and a construction waste management company located in the city of Pingdingshan in Henan Province, China. The Company is currently Pingdingshan’s leading producer of fly-ash bricks and concrete as well as the exclusive provider of construction waste management services for the cities of Pingdingshan and Shangqiu.
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