China One to Expand Canadian Dairy in Homeland

CHINA - China One Corporation has announced that it has signed a number of additional contracts in China to develop dairy farms at various locations in China.
calendar icon 31 March 2009
clock icon 2 minute read

The contracts are between China One, operating as IND DairyTech Ltd., and a variety of strategic third parties. A series of new cooperation agreements, entered into since the last quarter of 2008, cover five farms. Total commitments for cows to be delivered in 2009 under these new agreements are approximately 11,000 cows.

China One's contractual partners have also agreed to provide China One with, or assist the Company in obtaining, term loans for working capital as Canadian Holsteins are delivered to the farms. Under one of the contracts with Meishan City, China One is to deliver 2,000 cows by the end of 2009 and another 3,000 cows by the end of 2011.

Under another contract with Lingbao City, the Company is to deliver 3,500 cows by the end of 2009 and another 2,500 cows by the end of 2011. Both contracts include a loan of 10,000 RMB per cow delivered and the contract with Meishan includes 3,400 RMB per cow subsidy from the local government.

To date, the Company has received a subsidy of 1,600,000 RMB and a loan for 6,000,000 RMB at an annual interest rate of 7.29% for three years. In certain other agreements, China One may receive up to 13,000 RMB per cow by way of loans and, if certain production standards are achieved, subsidies.

"These agreements allow us to better capture incentives that have been introduced by the Chinese government to stimulate and improve the Chinese dairy industry following the scandal involving the contamination of milk with melamine," said Mr. Jesse Zhu, CEO, China One Corporation/IND DairyTech Ltd.

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