Huadi subsidiary announces investment agreement with Songyang County

Huadi International Group announced that Huadi, a wholly-owned subsidiary of the Company, has entered into an investment agreement with Songyang County Economic Development and Investment Group, a Songyang County local government owned enterprise in Zhejiang Province. The Agreement aims to start an advanced “Future Factory” construction project in the Chishou Industrial Zone of southwestern Zhejiang Province. Pursuant to the Agreement, the factory will occupy approximately 50 acres with a total investment of approximately RMB1B , including fixed asset investments of over RMB620M. HUDI plans to finance the project primarily via its working capital. Huadi Songyang has officially obtained the rights to use the first portion of 26 acres of land from Songyang Economic Development Zone on June 30, 2023, for the construction of the Future Factory project. The Future Factory project is expected to produce 60,000 tons of stainless steel seamless tubes and special alloy steel products annually, including 300 series, 400 series, 600 series, and 800 series. The project will be constructed in two phases, with the first phase building the factory over approximately 26 acres which will commence from December 1, 2023 to November 30, 2026, and the second phase, building the factory over approximately 24 acres which will be completed within 36 months after the land meets the construction requirements. Pursuant to the Agreement, the Songyang County local government has authorized Songyang Group to provide a series of supportive policies for the construction of the Future Factory project, including a total of RMB 15M in infrastructure construction subsidies to be granted to Huadi Songyang upon completion of all fixed asset investments within the agreed period.