Skystar Bio-Pharmaceutical Integrates Production of Microbial Strains

Production Costs for Microorganisms Expected to Decline By 90%

XI'AN, China, June 25 /Xinhua-PRNewswire-FirstCall/ -- Skystar Bio-Pharmaceutical Co., Ltd. (OTC Bulletin Board: SKBI) ("Skystar" or "Company"), a leading bio-pharmaceutical company in the People's Republic of China ("PRC"), today announced that it has successfully began producing, in-house, over a dozen microbial strains, a key raw material for the Company's microorganism products. The internal production of these microbial strains is expected to reduce the raw materials cost for the production of microorganisms by as much as $1.35 million, or 90%, in 2007. Microorganisms represent about 54% of Skystar's total revenue.

Through joint development efforts with several research organizations including Shaanxi Microbial Research Institute, Jiangsu Microbial Research Institute, China Northwestern University and China Northwest A&F University, Skystar's research and development team has designed and developed several lines of microbial strains using leading edge technologies such as cell fusion and laser-induced mutation, which are 40% to 160% more effective than existing outsourced strains. In addition, the new products are resistant to hydrochloric acid, bile and high temperatures, are highly stable and enzyme-active, do not have any drug resistance factors and have long expiration periods. By producing microbial strains in-house, Skystar has reduced the unit cost to $0.97 per kg compared to $9.54 per kg when purchased from outside sources.

"The development of these new microbial strains is a major breakthrough for our microorganism product line. Our new bio-products have high efficiency and safety and do not have any toxic side effects, drug residuals or contribute to environmental pollution," commented Mr. Weibing Lu, Chairman and Chief Executive Officer of Skystar. "With our microorganism products contributing over 54% to our revenues, we expect the cost savings from these new strains to significantly boost our gross margin and net income for the remainder of 2007 and for many years to come."

Skystar's began producing the microbial strains, including xylan probiotics, live Bacillus cereus, Streptoccus faecalis, Bacillus subtilis, Bacillus licheniformis, Saccharomyces cerevisiae, Lactobacillus acidophilus, Streptococcus feacalis, Rhodopseudomonas palustris and TX-806 bio-fermented preparation, in March 2007. Skystar's research and development team is continually working on new methods to produce other raw materials, in-house, to further reduce cost.

About Skystar Bio-Pharmaceutical

Skystar Bio-Pharmaceutical Company is a China-based producer and distributor of vaccines, microorganisms and veterinary medication to cure and prevent disease in poultry, livestock, birds and pets. The company's product line consists of more than 100 products with over 50 additional products in the developmental stage. Skystar has formed strategic sales distribution networks throughout China. The company recently completed the first phase of construction of new state-of-the-art bio-pharmaceutical facilities covering an area of almost eight acres. The new facilities meet or exceed all Good Manufacturing Practice (GMP) Certification Standards and have received GMP Certification from the Chinese government. For additional information, please visit .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events including revenues and gross margins could differ materially from management's current expectations. Such factors include, but are not limited to the company's ability to accurately complete product orders, coordinate product design with its customers, ability to expand and grow its distribution channels, market acceptance of new products, competitive pressures, scale-up of manufacturing, political and economic factors in the People's Republic of China, the company's ability to find attractive acquisition candidates, dependence on a limited number of larger customers and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

Skystar Bio-Pharmaceutical Co., Ltd

Scott Cramer

Director - U.S. Representative

Tel: +1-407-645-4433


CCG Elite Investor Relations

Crocker Coulson, President


Leslie Richardson, Financial Writer

Tel: +1-310-231-8600 x122


Source: Skystar Bio-Pharmaceutical Co., Ltd.
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