Property, plant and equipment

3 Months Ended

Mar. 31, 2012

(6) Property, plant and equipment

As of March 31, 2012 and December 31, 2011, property, plant and equipment consisted of the following:

	March 31, 2012			December 31, 2011
Property, Plant, and Equipment:
Land use rights	$	2,371,481		$	2,358,862
Building and improvements		20,386,902			11,145,342
Machinery and equipment		121,412,865			122,844,563
Vehicles		400,893			233,217
Construction in progress		2,448,366			2,335,579
		147,020,507			138,917,563
Less accumulated depreciation and amortization		(26,352,561	)		(24,266,456	)
Property, Plant and Equipment, net	$	120,667,946		$	114,651,107

Land use right represents state-owned land located in Baoding, Hebei province in China with lease terms of 50 years expiring in 2053.

Construction in progress mainly represents payments for the staff dormitory and canteen under construction.

Property, plant and equipment with net values of $10,352,907 and $10,646,244 have been pledged for long-term loans from credit union of HBOP as of March 31, 2012 and December 31, 2011, respectively. Depreciation and amortization of property, plant and equipment was $1,959,302 and $1,084,944 for the quarter ended March 31, 2012 and 2011, 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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