SOURCE: Dragon International Group Corp.

July 11, 2006 08:30 ET

Dragon International Group Acquires Shanghai Jinkui Packaging Material Company, Limited

NINGBO, CHINA -- (MARKET WIRE) -- July 11, 2006 -- Dragon International Group Corp. (OTCBB: DRGG), one of China's leading manufacturers and distributors of specialty paper products and packaging materials, has entered into an agreement to acquire a controlling interest in Shanghai Jinkui Packaging Material Company, Limited ("Shanghai Jinkui"). Shanghai Jinkui Packaging Material Company, Limited, with headquarters in Shanghai, China is a member of the packaging sector in China. The company manufactures high grade packaging materials for the pharmaceutical industry in China.

Under the terms of the agreement, Dragon International Group Corp. will acquire 100% of Shanghai Jinkui via a stock exchange. The acquisition price will be determined upon an audit of Shanghai Jinkui. A preliminary review of Shanghai Jinkui Dragon indicates approximately $2.75 million in shareholder equity. The financial statement of Shanghai Jinkui will be audited by our U.S. auditor. Dragon International Group will issue restricted common shares to acquire 100% ownership interest in Shanghai Jinkui.

Management of Shanghai Jinkui forecast the company could generate annual sales of $8 to $10 million as of June 30, 2007 and estimates annual sales of $18 to $20 million by June 30, 2008 with approximately 20% in net profit margin.

Mr. David Wu, CEO and Chairman of Dragon International Group Corp., stated, "This is a major step in our continuing efforts to diversify our business into various sectors of the packaging industry in China. The Shanghai Jinkui acquisition will allow Dragon to enter the domestic pharmaceutical packaging industry in China. China's pharmaceutical packaging industry has witnessed strong, recurring growth in the past decade. Annual sales of pharmaceutical packaging were approximately $2 billion in 2005 with approximately 20% annual growth. We believe we can infuse sorely needed capital to Shanghai Jinkui to rapidly expand its current business lines to new heights."

About Dragon International Group Corporation

Dragon International Group Corp. (OTCBB: DRGG) owns 100% interest in Ningbo Anxin International Company, Limited ("Anxin"). Anxin, established in 1997, is located in Ningbo, Zhejiang Province, China, approximately 200 miles south of Shanghai. Anxin is one of leading China's manufacturers and distributors of specialty paper products and packaging materials. Anxin is operating as a manufacturer and distributor of paper and integrated packaging paper products. Anxin, through a subsidiary, holds an ISO9000 certificate and national license to import and export products. In addition to its own operations, Anxin operates four subsidiaries, including: (i) Jiangdong Yonglongxin Special Paper Company, Limited, (ii) Hangzhou Yongxin Paper Company, Limited, (iii) Ningbo Xinyi Paper Product Industrial Company, Limited, and (iv) Xianyang Naite Research & Development Center. Anxin has a distribution network covering east and central China. Dragon and its subsidiaries have cultivated strategic relationships with several of the world's largest and well-known manufactures of paper and specialty packaging products. Fore more information, please visit http://www.drgg.net.

Safe Harbor Statement

Certain of the statements set forth in this press release constitute "forward-looking statements." Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning," "expect," "believe," "will likely," "should," "could," "would," "may" or words or expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company's limited financial resources, domestic or global economic conditions, especially those relating to China, activities of competitors and the presence of new or additional competition, and changes in Federal or State laws, restrictions and regulations on doing business in a foreign country, in particular China, and conditions of equity markets. More information about the potential factors that could affect the Company's business and financial results is included in the Company's filings, available via the United States Securities and Exchange Commission.

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