BEIJING, April 17, 2023 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), announced today that its majority owned joint venture has signed a deal with Shihezi city in Xinjiang, under which the JV will be granted 200,000 mu (roughly 33,000 acre) of farm land for growing NEC corn.
Origin's minority partner in the JV is a regional farming and feedstock company. The JV partner is responsible for financing, both with its own funds and with bank financing, the contract growing of NEC corn and for the construction of a grain processing facility that will dry and silo the corn. The JV partner has signed offtake agreements for the purchase of the NEC corn grown by the JV. Origin Agritech will sell the NEC corn seed to the joint venture and will provide planting support services.
The JV has planted 30,000 mu for this season and plans to expand planting to the whole 200,000 mu for the 2024 season. An engineering firm that builds grain processing facilities has been retained and is designing the facility and preparing the project plan for construction.
Shehezi government officials cited the superior nutritional yield of Origin's NEC corn, allowing hogs to thrive without the expensive soybean meal supplementation needed with every other corn variety, as a major reason for wanting to work with Origin.
Origin expects that this deal will add $8 million to revenue in 2023 increasing to $55 million in 2024 as the growing area is expanded to the full 200,000 mu. Since Origin is not responsible for any of the capital costs of the project, neither financing the contract growing, nor funding the construction of the grain processing facility, the Company will not need to raise capital to fund this growth.
"We are thrilled to help ensure food security for Xinjiang by expanding production of our revolutionary NEC corn in the region," said Origin Agritech's Chairman Gangchen Han. "In 2022 extreme covid lockdowns in the regions where we were looking to expand NEC production forced us to postpone our expansion. As is evident by this new deal, that growth was delayed but did not disappear. Every feedstock company that we have sent samples of NEC corn to has independently verified the superior nutritional content and is very interested in buying it from us. Now it is just about logistics and execution of expansion of production with deals like this one."
About Origin Agritech Limited
Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is a leading Chinese agricultural technology company. In crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. For further information, please visit the Company's website at www.originagritech.com. The company also maintains a twitter account for updating investors on company and industry developments, which is @origin_agritech.
Forward-Looking Statements
This communication contains "forward-looking statements" as defined in the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements address expected future business and financial performance and financial condition, and contain words like "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "would," "target," and similar expressions and variations. Forward-looking statements address matters that are uncertain. Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations which may not be realized. They are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates but involve a number of risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those discussed in forward-looking statements are: failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting our products; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; natural disasters and weather events and patterns; ability to protect and enforce the company's intellectual property rights; and separation of underperforming or non-strategic assets or businesses. The company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
Joe Ramelli
VP of Business Development
Phone: 310-845-6238
Email: joe@originagritech.com
