Fuzhou City, China-based Gushan Environmental Energy [1], the country's largest biodiesel producer, set a price for its initial public offering of 18 million American Depositary Shares at $9.60 per ADS, below the expected range.

Trading starts today on the New York Stock Exchange under the symbol "GU."

Earlier this month, Gushan set a range of $11.50 to $13.50 per ADS. Gushan is selling 15 million shares, with 3 million being put up by selling shareholders.

The company plans to use the expected proceeds of $144 million to expand its production capacity and research and development efforts.

The company currently operates three production facilities in Sichuan, Hebei and Fujian provinces with a combined annual production capacity of 190,000 tons.

Gushan plans to increase its annual production capacity to 400,000 tons by the end of 2008 with the addition of four new production facilities in Beijing, Shanghai, Hunan and Chongqing.

Merrill Lynch acted as sole book runner for the offering, with CIBC World Markets and Piper Jaffray serving as co-managers.

The underwriters have an option to purchase up to an additional 2.7 million ADSs from certain selling shareholders of Gushan to cover overallotments.