SOURCE: AgFeed Industries, Inc.

January 23, 2008 06:46 ET

AgFeed Expands Retail Distribution Channel With the Opening of Its 510th Store

Target Is for 1,000 Stores Opened by End of 2008; AgFeed Industries Reports Strong Customer Demand for Its Premix Feed Products

SHANGHAI, CHINA--(Marketwire - January 23, 2008) - AgFeed Industries, Inc. (NASDAQ: FEED) (website: www.agfeedinc.com), a market leader in China's premix animal nutrition and hog raising industry, announced today that the Company has opened its 510th product distribution chain store in China. AgFeed also reports strong customer demand from its sales channels since the beginning of 2008.

Songyan Li, PhD, AgFeed's Chairman, commented, "As China's consumers face a severe hog shortage and high pork prices, AgFeed capitalizes on strong synergies between our feed and hog raising businesses. In 2007, we generated almost all of our revenues from premix feed sales. We recently announced we expect 120,000 hog sales in 2008. At the current market price of around $220 per hog, AgFeed is experiencing strong sales in both the feed and hog businesses. We expect to achieve significant growth in both segments as we plan to acquire more hog farms as well as further broadening our feed distribution channels across China."

Junhong Xiong, AgFeed's CEO, commented: "As we rapidly expand into new markets, our retail chain stores will become an effective platform for cross selling AgFeed's and other global companies' agricultural products in China, which should significantly enhance our enterprise value over time since we own the distribution channels. AgFeed had 503 retail chain stores at the end of 2007. Our in-depth knowledge about feed production has contributed to our 13-year success as China's market leader in hog premix feed. We look forward to a year of strong sales and earnings growth in 2008."

Since January 2007, AgFeed has developed a highly effective retail product sales channel of distributing AgFeed products through independently owned stores across China. These stores exclusively market AgFeed premix products to end users including small- and medium-sized hog farms and individual hog farmers. AgFeed believes that its unique retail distribution model not only deepens market penetration, but also establishes long-term brand loyalty among hog farmers.

According to the China Feed Industry Association, over 530 million hogs are raised in China each year compared to approximately 100 million in the US. Pork represents approximately 65% of all meat consumption in China. Approximately 70% of China's annual hog production is contributed by individual hog farmers in a highly fragmented market represented by China's 500 million farmers that rely on animal raising and field output for incomes.

About AgFeed Industries, Inc.

AgFeed is a U.S. public company listed on the NASDAQ Global Market. Through its operating subsidiaries in China, AgFeed is a market leader in China's fast growing premix animal nutrition industry. AgFeed has also entered into China's hog raising industry since 2007 through multiple acquisitions. The premix market in which Agfeed operates is an approximately $1.6 billion segment of China's animal feed market, an industry which generated approximately $40 billion in 2006, according to the China Feed Industry Association. There are over 530 million hogs raised in China each year, compared to approximately 100 million in the US. Approximately 65% of China's annual meat consumption is pork.

Safe Harbor Statement

All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. AgFeed's actual results may differ from our projections. Further, preliminary results are subject to normal year-end adjustments. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect AgFeed's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in AgFeed's filings with the Securities and Exchange Commission.

Contact Information

  • Contact:

    Investor Relations:
    The Global Consulting Group
    Mr. Dixon Chen / Kevin Theiss
    Tel: 646-284-9409
    Email: ktheiss@hfgcg.com

    Company Contact:
    AgFeed Industries, Inc.
    Mr. Sam Zhou
    Corporate Development
    Tel: 011-86-13925912908
    Email: info@agfeedinc.com