XI'AN, China, June 24, 2011 /PRNewswire-Asia-FirstCall/ -- China Agri-Business, Inc. ( "China Agri-Business" or "we", OTC: CHBU), a manufacturer and distributor of organic agricultural application products in China, announced that China Agri-Business , through its Chinese operating subsidiary, Shaanxi Xinsheng Centennial Agriculture & Technology Co., Ltd. (the "Company") acquired the right to manage and operate Shaanxi Qinfeng Agrochemical Inc. ("Qinfeng") in Xi'an, China.
Qinfeng is an agrochemical manufacturer. Currently, Qinfeng has an annual production capacity of 400 metric tons of diafenthiuron, 600 metric tons of prochloraz, and approximately 5,000 metric tons of seed coating agents and preparations. Qinfeng's estimated annual revenue is currently approximately 90 million Renminbi ("RMB") (approximately $13.9 million).
Pursuant to the management and operating agreement between the Company and Qinfeng, the Company will manage Qinfeng's operations from June 1, 2011 until December 31, 2013 (the "Term"). The Company is entitled to the net profits or losses from the operations of Qinfeng during the Term. During the Term, the Company has rights to use Qinfeng's production facilities and intangible assets (i.e. trade names, trademarks, and certain licenses), to hire and dismiss employees, to file all applicable registrations with government authorities, and to coordinate with third parties in connection with technical development and production.
The Company agreed: (1) to manage Qinfeng's assets and production lawfully; if production is unreasonably interrupted continually more than two months, Qinfeng may terminate the Agreement and hold the Company responsible for all resulting losses; (2) to be responsible for payment of all taxes and fees, except taxes relating to housing and land and pre-existing taxes and fees; (3) to be responsible for the safeguard of Qinfeng's assets and intangible assets; (4) to be responsible for the safety of production and annual safety production inspections; (5) to be responsible for the validation and registration of fertilizer licenses; (6) to be responsible for the maintenance of current facilities and new equipment if needed; (7) to be responsible for the purchase of workers' compensation insurance; (8) to be responsible for the payment of wages and salaries; (9) to be responsible for all civil administrative and criminal charges in connection with the operation of Qinfeng's assets that occur during the Term.
As consideration for entering into the agreement, the Company paid Qinfeng 1.2 million RMB (approximately $185,000) on June 14, 2011. From January 1, 2012 to December 31, 2013, the Company must pay an aggregate of 2.4 million RMB each year to Qinfeng, payable in installments of 1.2 million RMB (approximately $185,000) due within the first 15 business days of January and July of each year.
Mr. Liping Deng, Chief Executive Officer, President and Director of China Agri-Business, commented, "We are very pleased to have this great opportunity to manage the operations of Qinfeng. Qinfeng has a total of 43 products, licenses or permits registered with Chinese government authorities. Among these products, two agrochemical products, diafenthiuron and prochloraz, are important raw materials for many lower-toxicity pesticide products. Both diafenthiuron and prochloraz products may be sold in domestic markets or exported to European and South-Eastern Asia markets." Mr. Liping Deng continued, "We believe that acquiring the management and operating rights will enable us to expand our product mix quickly and to maintain a sustainable long-term growth. We hope that we will have the opportunity to acquire Qinfeng's business, including assets and intangible assets, in the future."
About China Agri-Business, Inc.
China Agri-Business, Inc., through its operating company in China, Shaanxi Xinsheng Centennial Agriculture and Technology Co., Ltd., manufactures and sells non-toxic fertilizer, bactericide, and fungicide products used for farming in China. Crops grown with Xinsheng's products are eligible to qualify for the "AA Green Food" rating administered by the China Green Food Development Center, an agency under the jurisdiction of the Ministry of Agriculture of the People's Republic of China (however, our products themselves do not bear the "AA green food" designation). China Agri-Business's two primary product groups are organic fertilizers (Xinsheng Luyuan brand) and bactericides (Xinsheng Lufeng brand). China Agri-Business has a total of five brands and produces more than 50 different applications, including products designed to stimulate plant growth, condition soil, and prevent and cure plant diseases and parasites. China Agri-Business has products for a variety of crops, including potatoes, vegetables, cotton, fruit plants, and orchard trees. The products can be used alone or as supplements with other products. Xinsheng's manufacturing facilities are located in Xi'an, Shaanxi province, China. For more information about China Agri-Business, please visit http://www.chinaagri-business.com .
This news release contains forward-looking statements. These statements can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continue," "could," "estimates," "expects," "future," "goal," "hopes," "intends," "may," "objective," "plans," "potential," "scheduled," "seek," "should," or "will" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We caution you that no statements contained in this news release should be construed as a guarantee or assurance of future performance or results or the implementation of our current plans. You should not place undue reliance upon any forward-looking statements. Forward-looking statements involve risks and uncertainties, including those discussed under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2009 and in other reports we file with the Securities and Exchange Commission ("SEC"). The actual results that we achieve may differ materially from any forward-looking statements due to the effect of such risks and uncertainties. These forward-looking statements are based on current expectations, and, except as required by law, we assume no obligation to update this information whether as a result of new information, future events, or otherwise. You are urged to carefully review and consider the various disclosures made by us in our Annual Report on Form 10-K for the year ended December 31, 2009 and in our other reports we file with the SEC that attempt to advise interested parties of the risks that may affect our business, financial condition, and results of operations.
|SOURCE China Agri-Business, Inc|
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