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Lotus Pharmaceuticals, Inc. Purchases Land Use Rights to Grow its Business and Reduce Costs
Date:2/5/2009

sale distribution business, to be free from income taxes for eight years and pay income taxes at a reduced rate for the subsequent eight years. Also, we expect to enjoy a preferential VAT policy in Inner Mongolia, labor is less expensive, and the cost of utilities will be lower there,'' said Dr. Liu.

Developing New Products

In its feasibility study for developing an Inner Mongolia facility, the Company highlights the huge market potential in China for domestically produced intravenous fluids. China consumes about seven billion bottles of intravenous fluids every year, and the top two intravenous fluids producers in China can produce less than 8% of the amount that is needed. The plant protein that is the main ingredient used in producing a blood plasma substitute, one kind of intravenous fluid among the many which the Company plans to produce, is extracted from corn, and the area around the Chahaer Industrial Park is one of the top corn producing areas in China. Lotus plans to produce 20,000 metric tons of medical-grade corn starch as raw material for its blood plasma substitute, and a total of 240 million bottles of blood plasma substitute and other kinds of intravenous fluids a year. In the realm of drug production, this type of production is categorized as agricultural deep processing, and is in compliance with China's agricultural development policies. Byproducts from the processing of corn can be turned into animal feed.

Lotus will apply for production permits from the Chinese government for intravenous fluid products after the new Inner Mongolia facility is built and equipped.

Lotus will keep its research and development, retail drugstore management, clinical trial drug production facilities for Phase I, II and III testing, and production of its four current drugs in its current Beijing facilities even after the Inner Mongolia project is completed. Any new drugs which are approve
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SOURCE Lotus Pharmaceuticals, Inc.
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