China Organic Agriculture has signed a strategic partnership agreement with Wukeshu Grain Depot to process 60,000 tons of green rice grains yielding 42,000 tons of wholesale rice products over the next year. The company anticipates this agreement will contribute $27 million in additional revenues and over $8 million in earnings in the next 12 months. The agreement supports China Organic Agriculture's initiative to expand production capacity to meet growing demand for its branded organic products.

8. PRESS RELEASE:
China Organic Executes Milestone Strategic Partnership Agreement with
Wukeshu Grain Depot to Further Expand Wholesale Market Penetration
Company Anticipates Agreement will Contribute Additional $27 Million in
Revenues and in Excess of $8 Million in Earnings Over Next 12 Months
Jilin, China - China Organic Agriculture, Inc. (OTCBB: CNOA – News), a growth-driven
agricultural and products company leading China's organic foods revolution, has
announced a strategic partnership agreement with Wukeshu Grain Depot that the
Company anticipates will contribute an additional $27 million in revenues with in excess
of $8 million in earnings over the next 12 months, subject to currency fluctuations and
market price for products. The agreement further validates CNOA’s stated strategic
initiative to continue to expand revenues and earnings by maximizing capacity and
output to meet the growing demand for its brand name products.
According to the agreement, Wukeshu Grain Depot will process an estimated 60,000
tons of green rice grains, which will yield 42,000 tons of wholesale rice products, for
CNOA as it continues meet ever-increasing demand for its well-known ErMaPao brand
of high-quality products in the first year. The three-year agreement also calls for
production to increase annually by 10% based on the previous year’s production.
China Organic is firmly committed to developing a world class agricultural company that
applies advanced technological innovations to transform China’s rural economy into a
21st Century powerhouse. The Company has already made exceptional progress in
rolling up smaller farms in China’s Northeastern region to build a more cohesive
agricultural infrastructure for research and development, farming, manufacturing,
distribution and the marketing of organic and other high-quality food products.
LINKS TO ADDITIONAL INFORMATION
To visit China Organic Agriculture’s corporate website, click here.
Click here for investor-specific information, including quotes, news and filings.
An investor fact sheet about the company is available here.
China Organic Agriculture’s Investor Video Presentation is available for viewing here.
COMPANY PROFILE
The extraordinary demand created by China and its impact on the
world economy is well-documented with soaring prices for crude
oil and other vital resources. Behind that industrial growth are
burgeoning middle and upper classes, the fastest-growing segments
of China’s population. This expanding group of consumers
demands ever-higher standards of foods and services – perhaps
none more so than rice, the most important source of energy for
the nation’s 1.3 billion citizens. China Organic Agriculture (COA)
is ahead of the curve and has already established significant brand
loyalty among the nation’s affluent with high-quality, fully-certified
organic rice products that are already generating revenues and net
profits from China’s estimated $13 billion green foods market.
COA is among the largest producers of green and organic rice in
China with an expected 2007 green rice output of approximately
85,000 tons and 3,600 tons of organic rice output. The Company
commandsa3.6%percentshareof theorganicricemarketanda7.1%
share of the green rice market, and unlike its competitors, controls all
aspects of the process from seeds to planting and processing, R&D
and sales. COA’s proprietary, 20,000 square meter processing factory
has an annual production capacity of 30,000 tons. The Company also
has an extensive sales network located in China’s major cities.
Growth in the organic rice market is dramatic, with sales up 50% from
2006-2007 due to rapidly changing demographics. The premium
(and increasing) prices for organic products are being realized as
China’s growing affluent classes seek healthier food choices. COA
has experienced significant growth since its inception in 2002 and has
put solid plans in place to markedly expand revenues and increase
shareholder value. The quality of the Company’s products results
in the ability to command and receive prices 15% higher than
comparables for organic rice and 10% higher for green rice.
For the first six months of 2007, the Company’s revenues were
approximately $6.4 million, a 60% increase over the same period
in 2006. Six-month earnings were approximately $2.4 million, a
58% increase over the first half of 2006. Gross profit margins for
the first six months of 2007 grew to 43.9%. (NOTE: numbers above
reflect the six-month period beginning January 1, 2007 and ending
June 30, 2007.)
VITAL STATISTICS
as of August 26, 2007
Share price:
52-Week High:
52-Week Low:
Shares Outstanding:
Float:
Market Cap:
Average Volume (90-day):
$1.74
$4.00
$0.51
51.6 million*
9 million*
$89.8 million*
33,971 shares*
*approximate
OTC: CNOA CHINAORGANICAGRICULTURE.COM
THIRD QUARTER 2007
UPDATED
INVESTORFACTSHEET:CHINAORGANICAGRICULTURE,INC.
(CONTINUED ON NEXT PAGE)
CORPORATE CONTACT
China Organic Agriculture
Steve Wan, Vice President
Tel. 310.441.9777
Email: stevewan@chinaorganicagriculture.com