China Green Agriculture Announces the Relocation of its Wholly-Owned Subsidiary -- Xi'an Jintai Agriculture Technology Development Company
XI'AN, China, Feb. 28, 2012 /PRNewswire-Asia-FirstCall/ --China Green Agriculture, Inc. (NYSE: CGA) ("CGA" or the "Company"), a producer and distributor of humic acid based compound fertilizers, blended fertilizers, organic compound fertilizers, slow-release fertilizers, highly-concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries in China, today announced one of the Company's subsidiaries in China, Xi'an Jintai Agriculture Technology Development Company ("Jintai") will be relocated to the facilities of one of the Company's other subsidiaries, Xi'an Hu County Yuxing Agriculture Technology Development Co., Ltd. ("Yuxing") located in Hu County, Xi'an. Yuxing's facilities are approximately a one hour drive south of Jintai's current location in the Economic and Technical Development Zone (the "Zone") in the metro area of the city of Xi'an. Jintai and Yuxing will continue to serve as the research and development bases of the Company's fertilizer products business. The relocation will commence on March 1, 2012 and the Company expects the relocation will be completed by the end of May 2012.
As mentioned in the Company's previous quarterly reports, with the rapid growth of urbanization in Xi'an, the Zone has been inhabited by a large and dense population and the periphery of Jintai has bristled with various industrial factories and utility plants. . The Zone's concentrated industrial activities and dense population changed the micro bioenvironment for the growth of Jintai's agricultural products and disturbed Jintai's normal fertilizer research and development. Recently such changes caused the death and obsolescence of large amount of Jintai's flowers and seedlings. Additionally, the government recently introduced a new rezoning plan for the Zone, and the land Jintai currently occupies is being converted from agriculture use to residential and commercial use. The rezoning will prohibit the agricultural growth activities that Jintai currently conducts at the property. To continue Jintai's business, the Company will relocate all of Jintai's operations, including greenhouses, inventories, growing seedlings, flowers and parent plants, to Yuxing.
"The upcoming relocation is our resort to sustain Jintai's business," said Mr. Tao Li, Chairman and Chief Executive Officer of China Green Agriculture. "While the relocation will impact Jintai's business growth temporarily, our normal research and development will not halt, thanks to the growing development of agriculture products in our new fertilizer research and development subsidiary, Yuxing. In the past few months, the board of directors had urged the management team to timely work out a viable relocation solution for Jintai's other fixed assets to mitigate the disruption from the relocation. In the long run, we believe the consolidation of Yuxing and Jintai's facilities will centralize the management of fertilizer research and development and decrease expenses by reducing redundancies. While the relocation will affect the segmental performance of Jintai during the relocation period, we expect the performance of our fertilizer subsidiaries will remain strong. We reaffirm our guidance for the fiscal year ended June 30, 2012 of net sales between $212.3 million and $228.0 million, net income of $37.9 million to $40.5 million and EPS of $1.41 to $1.51 based on 26.9 million fully diluted weighted average shares outstanding."
About China Green Agriculture, Inc.
The Company mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries, i.e.: Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong"), Beijing Gufeng Chemical Products Co., Ltd. ("Gufeng"), Jintai and Yuxing. Jinong produced and sold 152 different kinds of fertilizer products as of December 31, 2011, all of which are certified by the PRC government as Green Food Production Materials, as stated by the China Green Food Development Center. Jinong currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 22 provinces, four autonomous regions, and three central-government-controlled municipalities in the PRC. Jinong had 699 distributors in China as of December 31, 2011. Gufeng, and its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co., Ltd., are Beijing-based producers of compound fertilizer, blended fertilizer, organic compound fertilizer, and mixed organic-inorganic compound fertilizer. As of December 31, 2011, Gufeng produced and sold 313 different kinds of fertilizer products, and had 177 distributors in China. For more information, visit http://www.cgagri.com. The Company routinely posts important information on its website.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic, business and environment conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, the execution of its ten-year growth plan and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Safe Harbor Statement and the risk factors detailed in the Company's reports filed with the SEC. China Green Agriculture undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release, except as required by applicable law or regulation.
For more information, please contact:
China Green Agriculture, Inc.
Ms. Jane Zuo (English and Chinese)
Investor Relations Manager
SOURCE China Green Agriculture, Inc.