China Modern Agricultural Information Inc. (CMCI) Increases Milk Production Capacity and Expects to Add $5 Million Net Income with Acquisition of Shangzhi Yulong Co Ltd.
China Modern Agricultural Information Inc., a high-tech livestock company specializing in the breeding of cows and calves, the production and sale of milk, and the sale of organic fertilizer, today announced that it has signed a merger agreement with a Northeast China livestock company with proprietary technologies for the breeding of cows and sale of milk. Shangzhi Yulong Co., Ltd. of Harbin, Heilongjiang will transfer 100% equity interest to China Modern Agricultural Information Inc., which is expected to increase their fresh milk production capacity by 30,000 tons per year to 110,000 tons, generating $13 million in revenue and adding $5 million in net income for 2012.
“The acquisition of Shangzhi Yulong will expand our existing operations with the addition of 4,000 cows, raw milk production capacity expected to increase from 80,000 to 110,000 tons, the addition of leading industry management team members, extensive research and development capability, advanced facilities and proprietary breeding technology. We have evaluated Shangzhi Yulong’s business model which is similar to our own and expect the integration to be seamless,” said Youliang Wang, Chief Executive Officer of China Modern Agricultural Information, in a press release.
In addition to having been recognized by the Chinese government for their high quality fresh milk and wining the favor of many leading dairy processes sing corporations in Heilongjiang province, Shangzhi Yulong is credited with using their proprietary breeding system to have leading levels in the industry for calving rates of cows. At the end of the 2011 fiscal year in June, the company had demonstrated an increase in revenue of 86% from the year before. Most of the $3.3 million revenue and $1.5 net income generated in the first fiscal quarter ending September 30, 2011 at Shangzhi Yulong is from the sale of fresh milk. The current demand within the livestock industry and dairy industry put the company on target to reach $13 million by the end of its fiscal year with net profits exceeding $5.6 million.
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