June 19, 2012

Deyu Agriculture, Guangdong Wen's Food Group sign partnership deal

Deyu Agriculture Corp. has made a deal with Guangdong Wen's Food Group Co. (WFG), in which Deyu will supply raw corn to four of WFG's feed mills in southwestern China on a non-exclusive basis.

According to a release, Deyu has recorded US$3 million (RMB20 million) in sales revenue attributable to WFG since shipments commenced to WFG in January, which is equal to approximately 7,600 tonnes of raw corn. The company anticipates this to be an on-going supply relationship with WFG. Overall, the four feed mills use approximately 200,000 tonnes of raw corn per year.

WFG is a multi-industry and trans-regional livestock enterprise that is engaged mainly in the feed, poultry and pig industries. WFG's business operations involve bio-pharmaceutical and food processing in 20 of China's Provinces, and it has established more than 110 integrated companies. In 2010, WFG achieved sales revenue of RMB21.94 billion (US$3.45) and its feed production amounted to 5.14 million tonnes. In 2011, WFG's feed production approached 10 million tonnes. In view of this growth, Deyu believes it will we well positioned to serve WFG's trending demand for its feed products.

"Corn is the foundation of our business and we are very pleased to establish a new relationship that supports this segment," said Jianming Hao, CEO and Chairman of Deyu. "By working with WFG, we are confident that will be able to build upon the success that our corn division experienced last year, as this business segment increased its sales 156% from US$69.5 million in fiscal 2010 to US$177.7 million in fiscal 2011. Our new advanced processing centre boosted our total storage capacity and annual turnover of corn to over 100,000 tonnes and 700,000 tonnes, respectively, and we believe that our robust corn reserves and output capabilities will facilitate our supply to WFG, and help foster further progress in our corn division."

Deyu is a producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains operating in Shanxi Province of the People's Republic of China.