REDWOOD CITY, CALIFORNIA - Yasheng Group (OTCQB: YHGG), a high-growth diversified China-based agricultural company with US headquarters in California, is expanding its seed segment business scope to include contract R&D seed breeding services, large-scale seed multiplication operations, processing of certifications for import & export, and distribution for international seed companies to access China's seed market. Currently the company produces planting seeds for use within the company and for resale to other growers, as well as edible seeds, seeds for animal feeds, and oils.



Through Yasheng Group's own genetic research and development efforts, which include the cultivation of hybrid seed strains, the company will expand its ability in processing, seed treatment, packaging, and storing to service domestic and international companies for exclusive production. The company can implement long-term breeding programs with large-scale seed multiplication abilities. The company's operations are located in North West China and produce high quality seeds at low cost compared to foreign companies and compared to Chinese seed companies located close to coastal regions.



Currently, through its R&D center, Yasheng develops corn, potato, transgenic soybean, and transgenic cotton seeds, as well as many others. The company is seeking international cooperation to enhance its ability to develop new seed products. New products will be developed to fill niche markets such as hybrid fruit and vegetable seeds for food processing, longer storage life, higher yields, and seeds bred uniquely for a specific geographic region.



Several of the company's 'Agro Bases' are located in Jiuquan, GanSu Province, one of the best places to grow seeds around the world, where Yasheng is able to grow seeds for domestic and foreign customers due to the long days and natural environment. Through the newly formed "Yamei" Gansu Yasheng America Trade Corporation, a wholly owned subsidiary, the company is preparing a marketing campaign to promote the company's seed R&D, multiplication services, and its ability to penetrate Chinese and International markets through its existing distribution network.



According to USDA Gain Report "CH9133 Planting Seeds Annual," China remains one of the world's largest seed producers. China's total seed market value was estimated at $7.3 billion (RMB 50 billion) in calendar year 2009. China's continuing low labor costs enable it to produce hybrid seeds for overseas markets at a lower cost compared to its competitors. China imported 28,937 MT of planting seeds in MY 2008/09, valued at $149 million, an increase of seven percent by volume and 10 percent by value over the previous year.



Total seed exports in MY 2008/09 rose rapidly to $140.5 million, compared with $113.5 million in MY 2007/08. Vegetable, rice, and fruit/melon seed export values continue to rank the highest, accounting for 41, 33, and 10 percent, respectively. Seed exports are forecast to continue growing in MY 2009/10, mainly attributed to China's low cost structure for seed breeding operations.



Seed industry reform and consolidation continues as seed production and marketing continues to be fragmented in China, but the trend for restructuring the sector is quickly accelerating.


Ministry of Agriculture officials stated that by October 2009, China had over 8,700 licensed seed trading entities, and over 70 entities had foreign investment. The top 10 seed companies have taken about 15 percent of total seed market share.



Yasheng's business development managers expect the company to become a key player competing with the major international seed companies trying to penetrate the Chinese seed market. Through continued international cooperation and an increased invest into R&D, the company has the ability to excel in taking market share by utilizing their vast resources, access to land, manpower, know-how, and relationships.



SOURCE: Yasheng Group