April 17, 2008

AgFeed to acquire multiple hog farms in China

Press Release

AgFeed Industries Inc. has announced that it has entered into agreements to acquire majority ownership of several commercial hog farms in China.
 

AgFeed will hold more than 90 percent of ownership on average of the hog farms, which are located in south China provinces where live hog prices are among the highest in the country.

AgFeed has existing feed manufacturing facilities and an established management base in these regions.

These new acquisitions are expected to generate approximately 390,000 in annual hog production for AgFeed. The company anticipates that this additional production will add approximately 250,000 hog sales to its 2008 revenues. AgFeed previously provided guidance indicating that it would achieve approximately 120,000 hog sales in 2008 from its currently existing hog farm operations.

The current market price for hogs is approximately US$270 each based on an average hog weight of 105 kilograms. Coupled with relatively flat growth in the price for China's domestically produced corn, a major hog feed component, due to China's abundant domestic corn supply, AgFeed anticipates net income of approximately US$75 per hog sold.

AgFeed anticipates these acquisitions will close by early May 2008.