At China-Biotics, our mission is to become the dominant supplier of naturally occurring probiotic bacteria in China. We believe we are rapidly heading toward that goal.

 

 

Start Bulk Additive Business – China-Biotics is targeting the fast-growing bulk food additive business, which is currently supplied by imports. It is building a 150-metric-ton-per-year production facility, which is scheduled to commence production in 2008. When completed, the new plant will be the only large-scale probiotics plant in China that supplies the domestic bulk additive market. When fully utilized, the first phase of production is expected to generate up to $90 million in annual revenues, with gross margins slightly above the traditional 70% mark. China-Biotics has started to supply probiotic additives to Bright Dairy for its ice creams. The registered “Shining Probiotics” trademark is printed on Bright Dairy’s ice cream packages. This is the initial use of the Company’s branded probiotics as bulk additives in dairy products.

 

Expand Retail Business Beyond Shanghai – China-Biotics intends to expand the sale of products to the other metropolitan cities in China through large-scale growth in its Shining centers and appointment of new distributors. The Company had 60 Shining stores as end of FY2008, and plans to have 300 by the end of FY2009. Each store has an average payback period of less than one year.

 

Introduce New Products – China-Biotics will continue to leverage its proprietary technological expertise to introduce new products designed to improve individual health conditions, enhance immune systems and address health problems. The Company will strengthen its product pipeline to increase the array of products for sale in its Shining retail centers.