China Kangtai receives US$5.3 million in property compensation

China Kangtai Cactus Biotech Inc, a vertically integrated producer and marketer of cactus-based products in China, has received RMB36.3 million (US$5.3 million) in compensation from the government for a 4.9 hectares property located in Qitaihe city, Heilongjiang province.

Kangtai also received RMB4.3 million (US$630,000) from a manufacturer for equipment transfer, resulting in total receipts of US$5.94 million. This transaction has no impact on China Kangtai's operations.

As part of Qitaihe City Xinxing District Rebuilding and Construction of Flyover System, China Kangtai entered into an agreement with Qitaihe city to turn over all use rights of the land to the city.

In March 2009, China Kangtai acquired the assets of Qitaihe Kangwei Biotechnology Co., Ltd to produce cactus extracts and powders. The purchase included the right to use 4.9 hectares of state-owned land in Qitaihe City, as well as housing, machinery, equipment and related facilities.

The purchase price was approximately US$5.42 million. Although payment was made in August 2009, the acquired equipment has been in the testing stage.

China Kangtai never started production at the Qitaihe facility. It now focuses on toll manufacturing of its products by third parties.