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           a long-term strategic development
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Acquisition of Wuhan Kernel, a long-term strategic
development to benefit of China Grand Pharm

Date: 14/12/2011
 
The Company Overview
Wuhan Kernel Bio Tech Co. Ltd (Wuhan Kernel, the Company) established in 1999. It is mainly engaged in the research and development, manufacture and sale of products such as bio-pesticides and bio-feed additives (probiotics). The bio-pesticides are mainly export to the international market and the probiotic feed additives is an effective tool replacing antibiotics in animal illness control.

To benefit of the Group, acquiring new technologies in relation to the production of amino acid, trying to stabilize supply of raw materials of amino acid to the Group, provide a new and good platform for testing existing amino acids. The Group is currently developing a series of enzymatic amino acids whereby the technology of this series of product may have a leading edge on international level and confidence on the series have an advantage to lead to the top of the market. Merging the expertise in the Group and chemical synthesize technology of Wuhan Kernal, in order to develop a brand new series of bio-chemical project kind to fulfill the market and generate profits.

Strength of Wuhan Kernal
The production capability of microoriganism fermentation and reputation in bio-pesticides field are the strongest competitive advantages of Wuhan Kernal
Provide various series of products, such as BT Toxin, validamycin, bio-additives (Protiotics), etc. Each series provides carious types of products and its derivatives
Guarantee products are in good quality and high purity
Most of the products are self developed, Wuhan Kernal own these product’s patents

Sales Ratio

 
Product Development of the Company for the forthcoming 1-5 years
The product developments will divide into 2 directions:
  1. With the technical support from the Group to develop biotechnology and upgrade current amino acids series, overcome technical bottlenecks, increase production volume, take over high-end market, access to high technology and make profits.
  2. Continuously improve current technologies and levels of products; expanding production scales provide world-class products to multi-national companies.
Firstly, in strategic way, in co-operation with the Group, the Company has the following development plan, the implementation of specific programs are in progress:
  • With the Group’s talent, technology, financial strength, coupled with the existing scientific research and technology, constantly expand into new markets, such as food additives and pharmaceutical intermediates.
  • Development of our own brands
    • Currently, the Group is highly focus on chemical synthesis field and Wuhan Kernal is expertise in bio-technology, hoping the join of Wuhan Kernal could help the Group explore new markets.
    • Use of technology and biotechnology advantages, develop high-end product lines and capture the market by creating our own brands.
The following are the three directions for the current core products development:
1. Bio-pesticides
    1. Enhance quality standard of current products, such as Validamycin and BT toxin; expand domestic market share and increase competitiveness in international market.
    2. Increase various types of product, expand applications and increase market shares
2. Bio-feed and additives (Probiotics)
    1. Promote applications to public, disseminate applications and advantages of Probiotics to general public. At the same time, increase usage rate( replacing antibiotics)
    2. Increase product variety such as latic acid bacteria (Pediococcus pentosaceus) and Enterococcus faecalis. Also increase bio-feed addictives variation, to develop different new formulations, e.g. tablets and embedding agent.
3. Bio-fertilizer
    1. Widely promote application and original drugs of current products, Bacillus subtilis and Bacillus licheniformis.
    2. Expand product variety, such as jelly-like Bacillus and Bacillus magaterium
    3. Increase resources and expertise in National Tender Project, i.e. organic material decomposition agent, in order to increase brand awareness and expand the brand’s market visibility.
 
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