Beijing, China
September 5, 2007
Origin Agritech Limited
("Origin") (NasdaqGS: SEED), a vertically-integrated supplier of
premium corn, rice, cotton and canola crop seeds, today
announced that it has signed a letter of intent to acquire a
majority interest in Guang Xi
Fortuneland Agricultural Corp. Ltd. ("Guang Xi Fortuneland")
in an all-cash transaction. Guang Xi Fortuneland specializes in
the manufacture, sale, and distribution of chemical and
fertilizer products in southern China. Based on preliminary
analysis and historical results, Origin believes that Guang Xi
Fortuneland generates annual revenues in excess of US$100
million, and has a significant share of the provincial market.
Origin hopes to consummate the acquisition within an agreed upon
time frame following the completion of, among other things,
required audits and additional due diligence, and the signing of
a definitive agreement. Additional details will be released
following the closing of the acquisition.
According to Dr. Gengchen Han, Chairman and CEO of Origin, "Upon
successful completion of this acquisition, Origin management
will have the ability to sell our products into 5,000
distribution points in the Guangxi province, providing new
channels domestically, and internationally into southeast Asia.
This will give Origin the ability to produce and cross-sell its
own suite of agricultural products with an established
fertilizer and pesticide brand throughout China. It also
important to note the consumption of fertilizer in China has
increased steadily and substantially over the last 30 years, and
we expect that its use will continue to increase in the coming
years."
Dr. Han continued, "With biotechnology evolving in the upcoming
decade, we believe this positions us to utilize our company
strengths in crop seed development to potentially produce and
market synergistic agricultural product in the future. Origin's
model remains constant in providing the best products and
service to our farming customer base."
Origin Agritech
Limited specializes in the research, development,
production, sale and distribution of hybrid crop seeds in China.
The Company owns or leases facilities in, among other locations,
Beijing, Gansu, Henan, Helongjiang, Liaoning, Jilin, Hainan,
Sichuan, Hebei, Yunnan, Jiangsu, Shanxi, Guizhou, Hubei, Anhui,
Guangxi, Hunan and Jiangxi provinces. Origin launched its first
entirely internally developed seed in 2003. As of 2006, Origin
had ten proprietary corn hybrids, six proprietary rice hybrids
and two proprietary canola hybrids currently on the market.
Guang Xi Fortuneland specializes in the manufacture, sale, and
distribution of chemical and fertilizer products in Southern
China. The Guangxi Fortuneland also possesses an import and
export division from which it is able to distribute into
neighboring regions. The company has also won several national
awards, and is the Guangxi province's biggest agriculture
capital management enterprise. The company possesses a dominant
distribution network in the Guangxi Province. The company has a
10% market share of the chemical fertilizer market in Guangxi
province, and has annual revenues in excess of US$100 million.
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