China Kangtai Cactus Biotech Inc. (OTCBB: CKGT), a vertically integrated grower, developer, manufacturer and marketer of a variety of cactus-based products in China, announced today that the company has signed a strategic cooperative production agreement with Helongjiang Songnan Feed Technology Co., Ltd. to produce its nutritious and patented cactus-based animal feed.
Studies of animal nutrition and immunology indicate that cactus-derived feed provides nutrition, boosts immune systems and prevents inflammatory illnesses. The new agreement covers cattle feed, fish feed and hog feed. Kangtai plans to launch a poultry feed product in 2010. The estimated production level for all four feed products is 15,000 tons in 2010. This represents approximately $4.4 million in 2010 sales. Kangtai previously announced that its newly launched patented hog feed product is expected to add approximately $330,000 to fourth quarter 2009 sales.
Under the agreement, China Kangtai will provide patented technology, raw materials, quality control guidelines and technical support. Songnan will provide processing facilities and production labor. China Kangtai will pay production fees to Songnan. Kangtai has implemented stringent quality controls of raw cactus materials that exclude chemicals or pesticides in planting and processing.
Founded in 1992, Songnan Feed Technology, based in Shuangcheng, Harbin City, Heilongjiang Province, is the first Chinese animal feed manufacturer to employ technology from Roche, the global leader in animal nutrition research. Songnan has an annual production capacity of 150,000 tons and has the capacity to double its output with two labor shifts.
China Kangtai CEO Jinjiang Wang said, "Songnan has built a strong market for its `green` animal feed since 1992. Working with Songnan not only enables China Kangtai to reduce requirements for fixed asset investment, but it also leverages Songnan`s existing sales channels in China developed over the past 17 years."
About China Kangtai Cactus Biotech, Inc.
China Kangtai Cactus Biotech, Inc. is a leading grower, developer, producer, and marketer of cactus-derived products, including nutraceuticals, nutritious food, health and energy drinks, beer, wine and liquor, extracts and powders, and animal feed. China Kangtai controls over 387 acres of plants and maintains an active R&D group that holds 18 product patents and is seeking another 12. China Kangtai's high-quality "green" products are sold throughout China via a distribution network that covers 12 of China's 23 provinces and two of China's four municipalities. More information may be found at http://www.biocactus.com or via e-mail: chinakangtai@gmail.com.
