WEIFANG, Shandong, China, Nov. 26 /PRNewswire-Asia-FirstCall/ -- Yuhe International Inc. (OTC Bulletin Board: YUII) ("Yuhe" or "the Company"), a leading supplier of day-old chickens raised for meat production, or broilers, in the People's Republic of China ("PRC"), today announced that the Company signed a contract to lease a feed production facility to Shandong Nongbiao Purina ("Purina"), a division of Cargill Company, for a period of ten years.
On November 11, 2008, Weifang Yuhe Poultry Co., Ltd, a wholly owned subsidiary of Yuhe International, Inc., entered into an equipment leasing and tenancy agreement with Shandong Nongbiao Purina to lease a feed production facility covering an area of 32 mu, or roughly 21,470 square meters. Pursuant to the agreement, Purina will pay a total of RMB 15,000,000 ($2.2 million) over the life of the lease with RMB 10,000,000 paid up front and the balance paid in equal semiannual payments over 10 years. The capacity of the factory's initial phase will be 90,000 metric tons per year. Construction of the factory and installation of the equipment will be completed in June 2009.
According to the agreement, Shandong Nongbiao Purina will invest approximately RMB 10,000,000 ($1.5 million) for the acquisition and installation of feed production equipment which will be used in the facility. In addition, after the facilities are operational, Shandong Nongbiao Purina will serve as Yuhe's exclusive source for feed. Feed produced at the facility will meet all of the most stringent safety and health standards which have been implemented by the Chinese government. The Company's own feed production will be gradually phased out.
"We are very pleased to forge this agreement with Shandong Nongbiao Purina, a division of Cargill Company, a fast growing feed manufacturer with a strong reputation in China and abroad," commented Mr. Gao, chairman and CEO of Yuhe International, Inc. "Before discontinuing our current feed production to transition to Purina as our sole feed supplier, we will perform a series of independent tests on Purina's feed in order to insure that it complies with the most rigorous standards set forth by the Chinese government. We are particularly excited with this arrangement as it will allow us to focus exclusively on the production of high quality day old broilers."
About Yuhe International, Inc.
Founded in 1996, Yuhe is the second largest day-old broiler breeder in China. The Company's main operations involve breeding, as all broilers are sold within a day of hatching. With headquarters in Weifang, Shandong province, the Company has modern facilities and is led by an experienced team which includes experts in chicken breeding, disease prevention and animal husbandry science. Yuhe has two operational subsidiaries, Weifang Yuhe Poultry Co. Ltd. and Weifang Taihong Feed Co. Ltd. which largely supplies the Company's internal demand for chicken feed. Currently, 85% of the Company's sales are in Shandong province with a customer base of 27 local agents. The Company has imported state-of-the-art equipment from the United States, Germany and Japan and has passed ISO9001 certification, allowing it to adhere to international standards of operation. For more information on the Company and its products, please visit http://www.yuhepoultry.com .
Cautionary Statement
This press release contains forward-looking statements 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 and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact:
Yuhe International, Inc.
Mr. Zhentao Gao, CEO
Phone: +86-536-7363-688
Email: yuhe7363688@163.com
Web: http://www.yuhepoultry.com
CCG Investor Relations Inc.
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
Mr. Graham Reed, Financial Writer
Email: graham.reed@ccgir.com