Property, plant and equipment

6 Months Ended

Jun. 30, 2011

(6) Property, plant and equipment

As of June 30, 2011 and December 31, 2010, property, plant and equipment consisted of the following:

	June 30, 2011			December 31, 2010
Property, Plant, and Equipment:
Land use rights	$	2,318,459		$	2,266,282
Building and improvements		10,248,652			7,283,466
Machinery and equipment		66,946,624			64,913,451
Vehicles		229,222			224,063
Construction in progress		52,225,128			32,316,540
		131,968,085			107,003,802
Less accumulated depreciation and amortization		(22,206,050	)		(19,557,842	)
Property, Plant and Equipment, net	$	109,762,035		$	87,445,960

Land use rights represent state-owned land located in China with lease terms of 50 years expiring in 2053.

Construction in progress mainly represents payments for the new5600 corrugating medium paper production line under construction.

Property, plant and equipment with net values of $10,573,729 and $4,928,033 have been pledged for short-term bank loans of HBOP as of June 30, 2011 and December 31, 2010, respectively. Depreciation and amortization of property, plant and equipment during the three months ended June 30, 2011 and 2010 were $1,104,155 and $1,078,337, respectively, while the depreciation and amortization were $2,189,099 and $2,022,597 during the six months ended June 30, 2011 and 2010, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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