CAT Acquires Usage Rights to 494,200 Acres for Jatropha Division
SINGAPORE, Feb. 12 /PRNewswire-FirstCall/ -- China Agro-Technology Ltd.,
(OTC Bulletin Board: CAGTF) has acquired the planting and land use rights for
494,200 acres of land in Indonesia for the purpose of generating revenues from
a plantation for Jatropha plants. The agreement was signed on February 5, 2008
with Boulevard Holdings Group Ltd for the acquisition rights in growing
Jatropha, managing Jatropha plantations, and harvesting Jatropha seeds to be
crushed for its production of non-edible vegetable oil for bio-diesel and its
other bio-mass components. The strategic acquisition allows CAT to diversify
its growth and reduce risk in the Jatropha industry. Management believes that
the acquisition will be worth over $300 million within five years based on
projected global demand for Jatropha by-products. The Company noted that,
according to an August 24, 2007 Wall Street Journal article (which was also
cited on CNBC on September 14, 2007), Goldman Sachs projected that Jatropha
was one of the leading candidates for global biodiesel production.
Jatropha trees produce seeds containing up to 40% oil. When the seeds are
crushed and processed, the resulting oil can be used in a standard diesel
engine, while the residue can be processed into biomass to power electricity
plants. The by-products are often cited as a clean, green and prime source
for global biodiesel supply. The price of Jatropha-based biodiesel has
historically been highly profitable, ranging from US$650 to US$750 per ton,
based on current negotiated market futures.
CAT Founder Chairman Dr. Harry He said, 'We expect CAT's Jatropha
production path to begin with immediate revenues from the sale of Crude
Jatropha Oil ('CJO') from existing harvests. We will concurrently apply our
innovative agro-technology processes to accelerate growth and yield for the
plantation; we expect that the entire 494,200 acres can be converted to our
fast-growth/high-yield technology in just two years. We believe that the new
acquisition rights on this one half million acres over the next five years
should increase the profit value of the Company.'
The new acquisition was completed with 30% cash and 70% newly-issued
shares at a premium conversion of US$2.10 via convertible bonds. The
acquisition significantly expands CAT's current portfolio of approximately
50,000 acres of Jatropha plantations in Indonesia. CAT previously forecast a
fair profit value of US$45 million for the remaining fiscal year 2008 and will
continue to focus on Agro-Technological Research & Development for future
growth based on its existing profitable operations.
Dr. He continued, 'This acquisition represents a major step forward in
CAT's strategy to build critical mass and economies-of-scale in production
operations. The rights to this extensive tract of land provide us with
security for our feedstock which -- when combined with our leading-edge
Jatropha cultivation, our Agro-Technology, and our trained work-force --
allows us to accelerate our CJO production in order to meet our revenue
targets. CAT's super-hybrid Jatropha plants in our current plantations are
able to achieve higher yields of CJO oil seed within a shorter growth period,
while positioning the biodiesel market to meet the world's fast-growing
demand.'
About China Agro-Technology Holdings, Ltd
China Agro-Technology Holdings, Ltd ('CAT') is an ecologically sustainable
agricultural technology enterprise that aims at promoting a global
reforestation program, generating environmental rehabilitation and serving the
acute demands for paper products. CAT is principally engaged in the ecological
forestry business and agricultural technology, producer and sale of quality
seeds and marketing of agro-technology know-how. The Company's Directors
consider the acquisition of the new land bank to be an addition to the
Company's biological assets. With the planting of Jatropha, CAT will broaden
its revenue sources and increase its role in the biodiesel markets and 'going
green' efforts. On the latter, CAT believes that partnering countries could
leverage on its genetic engineering plantation technologies to maximize
agriculture outputs and generate economies of scale while promoting an
ecologically sustainable land environment.
CAT is primarily involved in the ownership, management and operation of
Genetically Engineered plantations, the non-tube clone plantations and the
marketing of the proprietary rights and technological know-how to the global
market. CAT had total revenues of $37 million in the fiscal year ended
September 30, 2007, with gross profit of $35 million and net income of $32.8
million. CAT's strength is its group of highly innovative research scientists
and agronomists who specialize in the R&D of agriculture and intelligent
computer non-tube plant propagation technology. Driven by agro-biotechnology,
CAT is able to achieve higher output with a shorter growth period. CAT's
Genetically Engineered Eucalypt Trees (GEET) strains are suitable for
cultivation at different climatic conditions and are able to grow within just
4-5 years time to a height of 35 to 40 meters, as compared to other species
that take about 6 to 8 years. The Company's trees also yield 50% more in wood
timber, about 150 cubic meters per hectare as compared to 100 cubic meters per
hectare for those which currently leads the world in eucalyptus production.
Other unique features of CAT's GEETs include increased resistance against
pests and weeds, the ability to flourish under adverse weather and soil
conditions, reduced usage of agro-chemical and growth of at least 8 rotations
over a period of 50 years without the need for replanting of new saplings.
Safe Harbor Statement: Under The Private Securities Litigation Reform Act
of 1995: Except for historical information contained herein, the statements in
this news release are forward-looking statements that are made pursuant to the
safe harbor provisions of the Private Securities Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties, which may cause
a company's actual results, performance and achievement in the future to
differ materially from forecasted results, performance, and achievement. These
risks and uncertainties are described in the Company's periodic filings with
the Securities and Exchange Commission. The Company undertakes no obligation
to publicly release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof, or to reflect the occurrence of unanticipated events or changes in the
Company's plans or expectation.
Contact:
Ashley Hull
ProPublic Media LLC
hunnyhull@propublicmedia.com
SOURCE China Agro-Technology Ltd.
