Operations at China Star Food's new plant halted; lower profit expected for FY17

OPERATIONS have been halted at China Star Food's new Lian Cheng county manufacturing plant, following the delay of the county's centralised waste water treatment plant.

The group, which manufactures healthy food snacks in China, said on Thursday that the Lian Cheng government had recently imposed strict regulations restricting factory operations within the county. The rules arose from a nationwide policy to curb industrial activities contributing to environmental pollution. As a result, the group's new plant can resume production only upon completion of the county's treatment plant, expected by the third quarter of this year.

In the meantime, the firm said that its revenues and profits will be substantially impacted due to the lack of finished products for sale.

China Star Food has advised its shareholders and investors to exercise caution, as "there is no certainty to the completion for the treatment plant".

The company has also announced that it is expected to post a "significantly lower" profit for the year ended March 31, 2017, due to "the closure of the company's factories since the Chinese New Year period, following a directive from the local government tightening the pollution control requirements".