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China-Biotics, Inc. Continues to Broaden Bulk Additives Client Base
Date:8/21/2008

SHANGHAI, China, Aug. 21 /Xinhua-PRNewswire-FirstCall/ -- China-Biotics, Inc. (OTC Bulletin Board: CHBT) ("China-Biotics," "the Company"), a leading Chinese firm specializing in the manufacture, research, development, marketing and distribution of probiotics products, today announced it signed a one-year contract with Henan Square Pharmaceutical Co., Ltd. ("Square Pharmaceutical") to supply probiotics for Square Pharmaceutical's probiotics-based medicines. The agreement runs through July 2009.

Square Pharmaceutical is a GMP-certified pharmaceutical company based in Henan Province. It has a portfolio of more than 60 medicines and supplements, one of which is Chang Wei Ning Capsule, a probiotics-based medicine used to improve stomach and intestinal health.

"Square Pharmaceutical marks our fifth bulk additives customer, all of which have signed contracts before we begin production at our new manufacturing facility," said Mr. Jinan Song, China-Biotics' Chairman and Chief Executive Officer. "We have accelerated the pace of new customer acquisition for our additive business in preparation for launching our new plant. Currently, we are in negotiations with another 50 potential commercial customers, of which 30 have begun sample testing for their newly developed probiotics-based products. We expect our new 150-metric-ton probiotics facility to come online in the fourth quarter of 2008. We look forward to increasing the number of business customers in order to occupy the capacity of our new plant when it is up and running."

China-Biotics aims to become one of the largest probiotics suppliers in the world once the new plant starts production. During the past fiscal quarter, sales of bulk additives to commercial customers totaled $1 million, or 8.8% of sales, contributing meaningful sales for the first time.

About Henan Square Pharmaceutical Co., Ltd.

Based in Henan Province, China, Square Pharmaceutical is engaged in the development,
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SOURCE China-Biotics, Inc.
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