Global Pharm Holdings Group Signs Letter of Intent with Bozhou Municipal Government to Develop TCM Base

SHENZHEN, China, March 1, 2011 /PRNewswire-Asia/ -- Global Pharm Holdings Group, Inc. (OTC Bulletin Board: GPHG) ('Global Pharm" or the "Company"), a Shenzhen-based, leading vertically integrated pharmaceutical company engaged in pharmaceutical product distribution, herbal Traditional Chinese Medicine (TCM) planting and processing, through its subsidiaries in Anhui, Jilin, and Shandong provinces, today announced that it has signed a Letter of Intent with the Bozhou municipal government to develop a Traditional Chinese Medicine base in Bozhou City, Anhui province, over the next five years.

The project is comprised of the following key components: the lease of 100,000 mu (about 6,667 hectares) of planting base from 2011 to 2015; the construction of an integrated TCM facility for health-care product R&D, herb processing, and TCM extraction during 2011 to 2013; and the establishment of a modern information platform for the collection, compilation, and analysis of TCM industrial information during 2011 and 2012. Global Pharm, together with the support of the Bozhou municipal government, plans to invest approximately RMB 500 million (about $76.1 million) in capital expenditures over the next five years to support the project.

In addition, based on the Letter of Intent with the Bozhou municipal government, Global Pharm will have the right to sign contracts with local farmers to procure annual harvests at the current market price. These contracts cover 250,000 mu (about 16,667 hectares) of herb cultivation land in Bozhou City.

"Through this initiative, we plan to take full advantage of the excellent TCM planting and marketing infrastructure in Bozhou City to leverage our Company's industrial competitiveness," said Mr. Yunlu Yin, Chairman of the Board and Chief Executive Officer of Global Pharm. "While we are still in the early stages of planning the project, this Letter of Intent reflects the mutual interests of the Bozhou Municipal Government and Global Pharm for developing the TCM industry in the region."

About Bozhou City

Being well known for its exceptional rich natural resources for TCM planting, Bozhou City is located in northwestern Anhui province, located in eastern China along the basins of the Yangtze River and the Huai River. The city occupies an area of 8,374 square kilometers and has a population of 5.9 million. Currently, Bozhou has near 1 million mu (66,667 hectares) of planting area. The city accounts for 10% of the national acreage of Chinese herbal medicines, 10% of the annual herb volume in China, and 25% of the annual Chinese TCM market value. Bozhou is ranked third in terms of the value of TCM exports in China and is home to the largest TCM raw material trading market in the world (source: http://www.bozhou.gov.cn/）.

About Global Pharm Holdings

Global Pharm Holdings Group, Inc. operates as a pharmaceutical company in the People's Republic of China. It engages in the pharmaceutical distribution, as well as the TCM herb planting and processing business. The Company has three subsidiaries: Anhui Xuelingxian Pharmaceutical Co., Ltd., Tonghua Tongdetang Pharmaceutical & Medicinal Material Co., Ltd. and Shandong Global Pharm Co., Ltd. Global Pharm engages in the distribution of pharmaceutical products through its three subsidiaries. The Company has initially formed through the integration of a vertical industrial chain, ranging from pharmaceutical distribution to TCM raw-material production. Currently, Global Pharm owns a GSP-certified, modern logistics distribution center occupying 237,600 square feet and manages over 13,000 inventory products; and its sales network covers Shandong, Jilin, and Liaoning provinces, as well as other developed provinces in China. For further information, please visit the Company's corporate website at http://www.globalpharmholdings.com.

Forward-looking Statements

Certain statements set forth in this press release contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, our management as well as estimates and assumptions made by our management. Such statements reflect the current view of our management with respect to future events and are subject to risks, uncertainties, assumptions and other factors as they relate to our industry, our operations and results of operations, plans for future facilities, capital-expenditure plans, and any businesses that we may acquire. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the U.S. federal securities laws, we do not intend to update any of the forward-looking statements to conform them to actual results.

SOURCE Global Pharm Holdings Group, Inc.