Hanfeng Evergreen Inc.

Hanfeng Evergreen Inc.

October 04, 2010 08:00 ET

Hanfeng Completes Joint Venture Distribution Agreement With Beidahuang

TORONTO, ONTARIO--(Marketwire - Oct. 4, 2010) - Hanfeng Evergreen Inc. (Hanfeng) (TSX:HF), a leading provider of value-added fertilizers, today announced that it has completed a definitive joint venture agreement (the "JV Distribution Agreement") with Beidahuang Agriculture Company Limited ("Beidahuang") whereby Hanfeng will supply up to 200,000 metric tonnes per annum ("MTPA") of value-added fertilizer products (slow and controlled release fertilizers, CarbonPower coated urea) to a joint venture ("the Distribution JV") to be operated by Beidahuang and Hanfeng. Under the terms of the JV Distribution Agreement, the value-added fertilizer products will be sold to the Distribution JV at market prices for resale in Beidahuang's distribution network. The Distribution JV also plans to distribute additional value-added fertilizers by leveraging Hanfeng's core technologies, Beidahuang's distribution network and third party resources. In addition to reselling value-added fertilizers, the Distribution JV will further cooperate in the areas of research and development, promotions and field trials. Under the terms of the JV Distribution Agreement, Hanfeng will own 40 percent of the joint venture.

"We are extremely pleased to join forces with Hanfeng, the acknowledged leader in value-add fertilizer production and technology in China," stated Ding Xiaofeng, CEO of Beidahuang. "Our mission is to help maintain food safety in China. In teaming with Hanfeng, we gain access to best in class fertilizers that dramatically enhance yield and reduce environmental damage caused by overuse of conventional fertilizers. In numerous field trials, their products consistently delivered outstanding results. Our annual fertilizer requirements are significant, and we feel we have chosen the right partner to help address those needs."

"Beidahuang is the premiere agricultural company in China, producing approximately 60 percent of the rice seeds used in domestic farming. They supply food and grains to several key regions of China, as well as the military, and are responsible for maintaining stable grain prices. We are honoured to be the first company Beidahuang has chosen to partner with and look forward to a long and productive partnership with them," stated Xinduo Yu, President and CEO of Hanfeng.

Hanfeng also announced that a feasibility study has been initiated on the previously announced 150,000 MTPA multi-product joint venture production facility. The proposed 50/50 joint venture facility (the "JV Facility") would be built at Beidahuang's Haolianghe urea production plant located in northern Heilongjiang province. Once completed, the JV Facility would provide value add products to Beidahuang's nearby reclamation lands. The feasibility study is being prepared in advance of the definitive agreements for the JV Facility, and is expected to be completed within 90 days.

About Beidahuang Agriculture Company Limited

Beidahuang (SHA:600598) is the largest public agricultural company in China, consisting of 16 agricultural subsidiaries, involved in multiple areas of the agricultural market including farming, distribution of rice, grains, and other agricultural products, and manufacturing fertilizers. It produces 3,000,000 tons of high quality rice, 300,000 tons of soybean, 150,000 tons of wheat, 1,000,000 tons of rice, as well as 300,000 tons of other grains, cash crop and organic food per annum from its nearly 10,000,000 mu of farm land. 

About Hanfeng Evergreen Inc.

Hanfeng is the largest producer of slow and controlled release fertilizers in China. It was the first company to introduce the concept of slow and controlled release fertilizers into China's agriculture market with its establishment of the first commercial scale production in China. The Company's production facilities are located in prime agricultural regions of China. Hanfeng has recently completed its first production facility outside China. Located in Surabaya, Indonesia, the facility will service the growing South East Asian market. Hanfeng is headquartered in Toronto, Ontario and its shares trade on the Toronto Stock Exchange. www.hanengevergreen.com

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about Hanfeng's business are more fully discussed in the Company's disclosure materials, including its annual information form and MD&A, filed with the securities regulatory authorities in Canada. All amounts are stated in Canadian dollars except for noted otherwise.

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