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Yuhe Int'l enter into feed supply agreement with Purina

Published on 11 July, 2009, Last updated at 01:23 GMT

Yuhe International, Inc. (BULLETIN BOARD: YUII) ("Yuhe" or "the Company"), a leading supplier of day-old chickens raised for meat production, or broilers, in the People's Republic of China ("PRC"), today provided an update on its feed supply arrangement with Shandong Nongbiao Purina Feed Co., Ltd. ("Purina").

In November 2008, Weifang Yuhe Poultry Co., Ltd., a wholly owned subsidiary of Yuhe, entered into an agreement with Purina whereby Yuhe will build a 21,470 square meter feed production facility that Purina will lease and operate as Yuhe's exclusive feed supplier. The agreement between Yuhe and Purina ends on July 10, 2019. In June 2009, Yuhe completed construction and equipment installation at the facility.

The feed facility will commence operations on July 10, 2009. Yuhe will work closely with Purina to ensure that the feed manufactured at the new facility meets all of the Chinese government's stringent safety and health standards and matches the nutritional values of feed currently produced by Yuhe. In order to strategically focus on the breeder market, Yuhe will gradually phase out its in-house feed production operations.

"We have successfully completed construction of the facility as planned. Once the facility begins operations this month, we will begin transitioning feed production to Purina, which should result in moderately lower feed supply costs given Purina's purchase volume discounts and operational efficiencies," commented Mr. Zhentao Gao, chief executive officer of Yuhe International Inc. "By focusing on our breeding operations, we will provide our customers with top quality day old broilers at the most competitive prices. We remain confident that we will meet our previously issued 2009 net income guidance of $13 million."

About Yuhe International, Inc.

Founded in 1996, Yuhe is the second largest day-old broiler breeder in China. The Company's main operations involve breeding, as all broilers are sold within a day of hatching. With headquarters in Weifang, Shandong Province, the Company has modern facilities and is led by an experienced team which includes experts in chicken breeding, disease prevention and animal husbandry science. Yuhe has two operational subsidiaries, Weifang Yuhe Poultry Co. Ltd. and Weifang Taihong Feed Co. Ltd. which largely supplies the Company's internal demand for chicken feed. Currently, 85% of the Company's sales are in Shandong province with a customer base of 27 local agents. The Company has imported state-of-the-art equipment from the United States, Germany and Japan and has passed ISO9001 certification, allowing it to adhere to international standards of operation. For more information on the Company and its products, please visit .

Cautionary Statement

This press release contains forward-looking statements concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

For more information, please contact:

Yuhe International, Inc.
Mr. Vincent Hu, CFO
Phone: +86-536-7300-667
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Mr. Jason Wang, Director of Investor Relations
Phone: +1-765-409-1844
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CCG Investor Relations Inc.
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
crocker.coulson@ccgir.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it


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