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Yongye International Expands Its Existing Production Capacity by 50% and Provides Updates on Customer List Acquisition

2010-07-02 21:27
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BEIJING, July 2 /PRNewswire-Asia/ -- Yongye International, Inc. (Nasdaq: YONG), ("Yongye" or the "Company") a leading manufacturer, developer and distributor of "Shengmingsu" brand plant and animal nutrient products in China, today announced that the Company has successfully increased the annual production capacity of its existing plant nutrient production line from 10,000 tons to 15,000 tons. Yongye's current production facilities are located in Hohhot, Inner Mongolia.

Prior to the expansion, Yongye's plant nutrient production capacity consisted of 10,000 tons per annum production line which had been running at full capacity in order to support the company's rapid sales growth. Since the beginning of 2010, the Company has been streamlining the production process on the existing production line to enhance the manufacturing efficiency and output. Through redesigned workflow and an upgrade on the existing manufacturing equipment, the expansion was successfully completed and resulted in increasing annual production capacity of plant nutrient product by 50% from 10,000 tons to 15,000 tons. The upgraded production line is realizing full production capacity utilization rate.

Yongye is also in the process of completing the acquisition of the distribution network in Hebei province, which is comprised of a customer list of all county-level distributors who sell the Company's Shengmingsu plant and animal nutrient products to over 2,700 independently-owned Yongye branded stores located in the province. After the acquisition, the Hebei provincial level distributor, who used to have exclusive rights to sell Yongye's product in Hebei province will assist in the integration to ensure a smooth customer transition to Yongye and will help the county-level distributors meet certain performance requirements in 2010, which is stipulated in the acquisition agreement between the distributor and Yongye's operating subsidiary in the PRC. In addition, the to-be-issued 3.6 million new shares for this acquisition will be subject to a six month lock up period.

"We are very pleased to have achieved such a significant production capacity expansion without major financial investment, through our continuous improvement efforts," stated Mr. Zishen Wu, Chief Executive Officer of Yongye International, Inc. "We expect that the enhanced production line and 20,000 tons per annum plant nutrient product production line, which is currently under construction, together will provide solid support for Yongye's sales growth in the next several years."

"Additionally, we are seeing higher than expected sales growth in the second quarter of 2010 and will report some preliminary numbers in a few weeks. Hebei is currently our most important provincial market and continues to have significant room to grow. We have full confidence that this customer list acquisition will be successfully executed," Mr. Wu added.

About Yongye International, Inc.

Yongye International is a Chinese agricultural nutrient company headquartered in Beijing, with its production facilities located in Hohhot, Inner Mongolia, China. Yongye markets two lines of organic nutrient products: a liquid plant nutrient product which is sprayed on crops and a powder nutrient product which is added to the feed of dairy cows. Both products are sold under the brand name "Shengmingsu," which means "life essential" in Chinese. The Company's patented and patent pending formulas and proprietary extraction processes allow it to create products that increase crop yields and improve the health of livestock. The Company sells its products primarily to provincial or regional level distributors, who then channel these products to a carefully selected network of independently-owned Yongye branded stores in China. For more information, please visit the Company's website at http://www.yongyeintl.com .

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For more information, please contact:

Yongye International, Inc.

Mr. Larry Gilmore-VP of Corporate Strategy

Phone: +86-10-8232-8866 x8880

Email: larry.gilmore@yongyeintl.com

CCG Investor Relations, Inc.

Mr. Crocker Coulson, President

Phone: +1-646-213-1915

Email: crocker.coulson@ccgir.com

Athan Dounis, Account Manager

Phone: +1-646-213-1916

Email: athan.dounis@ccgir.com

Source: Yongye International, Inc.

Related stocks: NASDAQ-CM:YONG

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