XI’AN, China, Oct.1, 2014 /PRNewswire/ — China Green Agriculture, Inc. (NYSE: CGA; “China Green Agriculture”, “we” or the “Company”), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its subsidiaries in China, today provides an update on the development of the Company’s business strategies.
The agriculture industry in China is currently ongoing a revolutionary restructuring throughout the country. Such restructuring is characterized by the massive consolidation of arable farming lands along with the ongoing urbanization, the replacement of traditional distribution of agricultural material and goods by the new online, offline, online-to-offline channels, and the emerging of new large-scale farming organizations from historically smaller farmer families and farms. Recently, new competitors, including certain high profile players, such as Alibaba Group (“Alibaba”), and Evergrande Real Estate Group, had penetrated into the sales business in the agriculture industry. While untraditional, these new competitors’ actions had significantly reshaped the landscape and outlook of the agriculture industry.
To accommodate the Company’s growth in such restructuring environment, we are currently establishing a comprehensive business framework that consists of various online, offline, online-to-offline (“O2O”) infrastructure channels to enhance the sales strategies of the Company’s products. Owning such infrastructure assets is critical for us to induce offline demand, and transform such demand to online orders via offline network of retail outlets.
Our efforts for the above framework include the development of the Company’s proprietary internet platform to the sale of the Company’s fertilizer products at subsidiary level. The platform is currently under beta testing and expects to become live at http://www.900cga.com by the end of October 2014.
In addition to developing proprietary internet platform, we are utilizing existing internet channels from third-parties to enhance the availability of the Company’s products to enlarged customer base. Specifically, for instances, we had recently signed with Alibaba and registered online stores to sell our products at both Alibaba’s B2B wholesale portal and its B2C retail platforms.
What becomes especially noteworthy in our business strategies is the build of an agricultural ecosystem that breaks barrier among separate sales channels by universally integrating the sales of basic materials such as fertilizers and the sales of agriculture products together.
We build such ecosystem in two steps.
Step one is centering at the innovation in payment methods. In addition to the traditional monetary methods through which we collect payment in cash from clients, we are currently planning to accept organic grains and quality agriculture products as an alternative payment or credit from our fertilizer customers in exchange for the Company’s fertilizer products. Traditional farmers are risk averse and therefore prefer the non-monetary alternative payment for fertilizers to monetary payment as they are typically cash stringent. With that, we are in a better position to exchange fertilizer for quality agriculture products that would have cost more cash for us to procure with cash otherwise. We are working with our peer partner who had already contracted hundreds of farming clients on its own large-scale bases and thus secured reliable source of quality agriculture products across the country. Such innovation in payment is based on the Company’s existing offline sales network of fertilizer products nationwide.
Step two in the ecosystem consists of the successful resale of these quality agriculture products that we collect from countryside to urban residents. Although distant from countryside field, the urban residents have been familiar with ecommerce and go shopping on internet regularly.
We are planning to sell quality agriculture products and organic grain to urban residents online at http://www.900lh.com, offline, and online-to-offline by working with our peer strategic partner, Xi’an Gem Grain Co., Ltd. (“Gem Grain”)
Gem Grain was founded on March 2014, and is currently a private subsidiary of of the Xi’an Techteam Investment Holding (Group) Co., Ltd,. Gem Grain focuses on producing high-end private customized organic agricultural products and fresh agricultural products sales online, offline, and online-to-offline. Techteam Investment is a holding company owned and controlled by Mr. Tao Li, Chairman and CEO of the Company. Gem Grain has established more than 200 planting and breeding bases in the world, it requires the farmers in the bases to purchase the Company’s fertilizer, that will enhance our fertilizer sales.
Mr. Tao Li, chairman and CEO of the Company, said, “We had researched, explored, and tried numerous approaches to transform our business model. The outlook of our industry had changed. I am challenged to grow the company in the new landscape of competition. In the new fiscal year, I am very confident that we are much better positioned than our competitors in having achieved early steps in developing new strategies. I will lead my team, to take the leadership role of business model innovation ahead of giant companies in the agriculture industry.”
About China Green Agriculture, Inc.
The Company produces and distributes humic acid-based compound fertilizers, blended fertilizers, organic compound fertilizers, mixed organic-inorganic compound fertilizers, slow-release fertilizers, highly concentrated water soluble fertilizers and agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings through its wholly-owned subsidiaries, Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), Beijing Gufeng Chemical Products Co., Ltd. (“Gufeng”) and a variable interest entity, Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”). Jinong produced and sold 125 different kinds of fertilizer products as of June 30, 2014, all of which are certified by the government of the People’s Republic of China (“PRC”) as “Green Food Production Materials”, as certified by the China Green Food Development Center. Jinong currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products through 926 distributors in 27 provinces, four autonomous regions, and three central government controlled municipalities in PRC. Gufeng, and its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co., Ltd., are Beijing-based producers of compound fertilizers, blended fertilizers, organic compound fertilizers, and mixed organic-inorganic compound fertilizers. As of June 30, 2014, Gufeng produced and sold 328 different kinds of fertilizer products, and marketed its products through 263 distributors among China. As of June 30, 2014, the Company had a total of 1,189 distributors and 453 different fertilizer products. For more information, visit http://www.cgagri.com. The Company routinely posts important information on its website.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 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, business and environment conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, the execution of its ten-year growth plan and various other factors beyond the Company’s control. All forward-looking statements are expressly qualified in their entirety by this Safe Harbor Statement and the risk factors detailed in the Company’s reports filed with the SEC. China Green Agriculture undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release, except as required by applicable law or regulations.
For more information, please contact:
China Green Agriculture, Inc.
Ms. Ran Liu (English and Chinese)
Tel: +86-29-88266383 13389205500