Property, plant and equipment

6 Months Ended

Jun. 30, 2012

(6) Property, plant and equipment

As of June 30, 2012 and December 31, 2011, property, plant and equipment consisted of the following:

	June 30, 2012			December 31, 2011
Property, Plant, and Equipment:
Land use rights	$	9,886,149		$	2,358,862
Building and improvements		17,874,450			11,145,342
Machinery and equipment		125,529,788			122,844,563
Vehicles		418,215			233,217
Construction in progress		4,263,022			2,335,579
		157,971,624			138,917,563
Less accumulated depreciation and amortization		(28,463,115	)		(24,266,456	)
Property, Plant and Equipment, net	$	129,508,509		$	114,651,107

Land use rights represent two parcels of state-owned land located in Xushui County of Hebei Province in China, with lease terms of 50 years expiring in 2053 and 2061, respectively.

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

Property, plant and equipment with net values of $10,009,274 and $10,646,244 have been pledged for short-term bank loans of HBOP as of June 30, 2012 and December 31, 2011, respectively.

Depreciation and amortization of property, plant and equipment was $2,091,447 and $1,104,155 for the three months ended June 30, 2012 and 2011, respectively.

Depreciation and amortization of property, plant and equipment was $4,050,749 and $2,189,099 during the six months ended June 30, 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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