November 5, 2009
China Kangtai signs cooperative pact to produce cactus-based animal feed
China Kangtai Cactus Biotech Inc, a vertically integrated grower, developer, manufacturer and marketer of a variety of cactus-based products in China, announced that the company has signed a strategic cooperative production agreement with Heilongjiang Songnan Feed Technology Co to produce its patented cactus-based animal feed.
According to China Kangtai, the new agreement covers cattle feed, fish feed and hog feed. In addition, Kangtai plans to launch a poultry feed product in 2010. Overall, the estimated production capacity for all four feed products next year is 15,000 tonnes, representing approximately US$4.4 million of the company's sales. Kangtai previously announced that its newly launched patented hog feed product is expected to add about US$330,000 to the company's fourth quarter sales.
Under the agreement, Kangtai will provide patented technology, raw materials, quality control guidelines and technical support. Meanwhile, Songnan will provide the processing facilities and production labour but the production fees will be paid by Kangtai.
Songnan has built a strong market presence for its 'green' animal feed products since 1992. Thus, working with Songnan not only allows Kangtai to reduce the requirements for fixed asset investment, but it also leverages Songnan's existing sales channels in China developed over the past 17 years, said China Kangtai's CEO Wang Jinjiang.