January 5, 2010

Yuhe International, a leading supplier of day-old broilers in China, had recently entered into an agreement to purchase 13 breeder farms from Weifang Dajiang Corporation.

The aggregate purchase price for the 13 breeder farms is RMB103.87 million (US$15.2 million).

The firm also purchased the land use rights for 50 years of a 5.3 hectare parcel of land for RMB18 million (US$2.64 million), which was paid at the end of 2009. Yuhe paid an additional RMB2 million (US$0.29 million) for a building and other facilities within the area.

The construction of this new breeder farm will commence in February 2010 and it is expected to be completed by the second quarter of 2010. Upon production, it will add 120,000 sets of parent breeders for Yuhe. The total capital expenditure for construction and equipment will be around RMB17 million (US$2.5 million).