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Yongye International Announces 2010-2012 Strategic Plan
Date:10/2/2009

hannel development activities to support its planned geographic expansion. The Company will strengthen and expand the brand recognition of Shengmingsu through advertising on top-tier national and local media outlets, such as CCTV, that serve rural farmers and agriculture product store owners and distributors. Integrated advertising and promotion campaigns at the national, provincial and village level will ensure that rural farmers receive the Company's branding message that Shengmingsu reliably increases crop yields' quantity and quality.

Production Capacity

Yongye plans to increase its production capacity to ensure that the Company has sufficient capacity for sustainable long-term growth. Currently, Yongye has annual production capacity of 10,000 tons of Shengmingsu branded nutrient products. The Company's current highly automated and cost effective facility operates at almost full capacity to meet peak season demand and inventory requirements. Yongye will announce detailed expansion plans by the end of fourth quarter of 2009.

Vertical Business Integration

Yongye intends to increase its profitability through upstream and downstream business integration. Yongye plans to acquire a lignite coal mine in order to directly secure the raw materials that drive the largest percentage of its cost of sales. This acquisition will enable Yongye to tightly integrate the production of its humic acid with its fulvic acid extraction processes. The Company expects to reduce costs and ensure control over the quality of the humic acid produced once the acquisition is fully integrated. This is expected to enable Yongye to significantly increase its gross margin.

In addition, Yongye plans to acquire the Shengmingsu distribution channel from certain distributors that have strong, established branded store networks. This initiative would enable Yongye to establish more direct control over sales to end custom
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SOURCE Yongye International, Inc.
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