Migao Corporation
TSX : MGO

Migao Corporation

April 24, 2008 07:00 ET

Migao Increases Selling Price of Potash-Based Fertilizers

- Strong Demand for Migao's Products Continues -

TORONTO, ONTARIO--(Marketwire - April 24, 2008) - Migao Corporation (TSX:MGO), a China-based leading specialty potash fertilizer producer, is pleased to report by way of market update that it has negotiated prices for its potash-based products reflecting more than a 100% increase over the average selling price in 2007. Migao processes potassium chloride (MOP) at its various production facilities across China into specialty potassium sulphate (SOP) or potassium nitrate (NOP), and sells these products to national agricultural entities in China to be applied to high-value crops.

The increased selling price is budgeted to result in gross profit margin as a percentage of sales to be in the range of 22-24%. Gross margin as a percentage of sales for fiscal 2007 was 21%. The new prices are now in effect and will have a positive impact on the financial results of the current quarter. Global demand for MOP has resulted in the delivered price to China, regardless of origin, to exceed $650 USD per tonne. Dramatic increases are also being felt globally from the other two primary fertilizer nutrients - nitrogen, and phosphate. China's government has responded to increased fertilizer costs by announcing and implementing several policies including polices affecting fertilizer exports from China and selling prices of MOP and compound fertilizers within China. The policies are an effort to ensure adequate domestic supply of fertilizer and food, and to the extent possible, moderate upswings in food prices. No policies have been announced or implemented to restrict the selling price of SOP or NOP within China. China is Migao's primary market, representing more than 95% of sales in 2007.

"Our customers continue to realize economically compelling returns after factoring in rising fertilizer costs," stated Mr. Liu Guocai, President and CEO of Migao. "The basic supply demand forces allow Migao to maintain its profitable position as a purchaser and processor of potash based specialty fertilizers. Because of the nature of our products and the end use of our products, the selling and pricing of our products has not been restricted by any recent government policies."

Migao's inventory of MOP is sufficient to last approximately four months. The pricing strategy of the Company is to maintain gross profit margin as a percentage of sales. Earlier in the year, Migao announced it had secured supply of MOP from one of its key suppliers for a one-year period.

The outlook for China's domestic chemical fertilizer market is positive. The main factors that drive the growth in the fertilizer industry in China include increasing demand by the growing middle class for high quality fruits and vegetables and greater meat consumption as well as favourable government policies towards investments in agriculture in an effort to boost the rural economy. As China's citizens continue to benefit from strong economic growth they demand more and better food. Migao's specialty fertilizers increase the yield and enhance the quality of the crops they are applied to.

About Migao

Migao Corporation, through its wholly owned subsidiaries, owns and operates fertilizer production plants in various strategic locations across China for the production and sale of specialty potash fertilizer (potassium nitrate and potassium sulphate) to China's agricultural market. Migao Corporation is subject to, and complies with strict government regulations that govern safety, quality and environmental protection. Each of Migao's operating facilities have obtained ISO certification. Please visit www.migaocorp.com for further information.

This press release contains statements that may constitute forward-looking statements, which may include financial and other projections, as well as statements regarding future plans, objectives or economic performance. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied and accordingly, investors should not place undue reliance on any such forward-looking statements. Factors that could cause results to vary include those expressed in the Company's filings with Canadian securities regulatory authorities. All information presented herein should be read in conjunction with such filings.

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