BEIJING & SAN DIEGO -- Origin Agritech Ltd. has entered into an agreement to acquire a 52.21 percent interest in Denong Zhengcheng Seed Co. Ltd., a developer, producer, and marketer of rice, cotton, and rape seed hybrids in China, for approximately $5 million in cash.

Denong is best known for its hybrid rice seed products, which it sells primarily in the southwest region of China.
Denong has a strong portfolio of proprietary hybrid rice seeds. It is currently producing and selling 10 proprietary rice hybrids, six proprietary rapeseed hybrids, and five proprietary cotton hybrids. The company has four research facilities and five production facilities, all located in southwestern China. Denong has approximately 350 employees.

Gengchen Han, Origin's CEO, said, "We are extremely pleased with this acquisition because Denong's strengths in the hybrid seed market complement our own and broaden our hybrid offering. With the acquisition of the controlling interest in Denong, we now have a significant presence in China in two major crops, corn and rice.

"In addition, we have added complementary offerings in cotton seed and have a new offering, rapeseed, to add to our product mix," the CEO said. "We expect that the addition of the hybrid pipeline of Denong to that of Origin will further strengthen our growth over the next few years. In addition, Denong brings with it a large, localized distribution network that we can utilize to augment the sale of our current product line.

Founded in 1997, Origin specializes in the research, development, production, sale and distribution of hybrid corn rice and cotton seeds in China. The Company owns or leases facilities in, among other locations, Beijing, Gansu, Henan, Helongjiang, Liaoning, Jilin, Hainan and the Sichuan provinces, and also has an office in San Diego, CA.

Origin launched its first entirely internally developed seed in 2003 and introduced four new proprietary corn hybrids to the market in 2004. In 2005, Origin had five new proprietary corn hybrids and one new proprietary cotton hybrid approved by the government registration office. Origin anticipates that it will introduce more than 40 new proprietary products into the government testing and approval cycle between now and 2008.

SOURCE: Origin Agritech Ltd. via Business Wire.