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Zhongpin Implements New Supply Chain Management and Logistics Systems

2007-04-23 18:13 818

CHANGGE CITY, China, April 23 /Xinhua-PRNewswire-FirstCall/ -- Zhongpin Inc. (OTC Bulletin Board: ZHNP), a leading meat and food processing company in the People's Republic of China ("PRC"), announced today that it has implemented the first phase of a new advanced planning and scheduling ("APS") system and a logistics management information system ("MIS") as part of its daily operations.

The APS system utilizes multiple analytical algorithms to optimize Zhongpin's supply-chain management system and reduce the cost of raw materials. The APS system quickly integrates customer orders with current market data on the price, origin and grade of hogs, which is then used to create a purchase plan for Zhongpin's raw materials purchasing department. The new system is capable of creating a purchase plan for raw materials based on any purchase order within one minute of inputting the purchase order into the system.

Zhongpin has implemented the first of three phases of the APS system. The first phase involves connecting customer orders with the raw materials purchase plan. The second phase integrates customer orders with processed meat and raw materials packing materials, labels and additives. The company hopes to implement this phase in the second half of 2007 or the beginning of 2008. The third phase integrates production, sales, and logistics, and is scheduled for implementation in 2008. Once all three phases are complete, the company expects to see substantial increases in the accuracy of its pricing management and client satisfaction ratios, along with corresponding reductions in costs.

"After a year of development, we are pleased to bring our new APS system online," commented Mr. Xianfu Zhu, CEO of Zhongpin Inc. "This powerful tool will help us evaluate the efficiency of our supply-chain and represents a substantial upgrade from the basic analysis and planning system we used in the past. The APS system will streamline communications between internal departments, improve our manufacturing efficiencies and increase our working capital turnover. In addition, management can now react quickly to changes in the market, which should allow us to take advantage of opportunities in the rapidly-evolving market for pork products in China."

Zhongpin also recently implemented its logistics MIS, a browser-based system that integrates the management of clients, vehicles, routes and prices. The logistics MIS controls key processes, including data input, loading, consignment, settlement and receipt so as to avoid manual errors. It also allocates vehicle resources by vehicle type, route and cargo. The logistics MIS has a powerful reporting function that makes it easy to obtain and analyze metrics such as freight, loading ratios and on-time arrivals.

"Our advanced logistics management is a keystone of Zhongpin's growth strategy, which includes the integration and coordination of our transportation, warehouse management and inventory control systems, as well as the integration of our marketing and manufacturing efforts. This new logistics MIS will enable us to enhance the efficiency of our logistics and support our ability to expand our operations across the PRC and internationally," concluded Mr. Zhu.

About Zhongpin

Zhongpin is a meat and food processing company that specializes in pork and pork products and vegetables and fruits, in the PRC. Its distribution network in the PRC spans more than twenty provinces and includes over 2,700 retail outlets. Zhongpin's export markets include the European Union, Eastern Europe, Russia, Hong Kong, Japan, and South Korea. For more information, contact CCG Elite directly or visit Zhongpin's website at http://www.zpfood.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Zhongpin's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: unanticipated changes in product demand, interruptions in the supply of live pigs/raw pork, downturns in the Chinese economy, delivery delays, freezer facility malfunctions, poor performance of the retail distribution network, changes in applicable regulations, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission.

Source: Zhongpin Inc.
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