Venture Transforms Origin's Market Opportunity, Elevating Its Position from Corn Seed to Corn Feedstock Sector with a Twentyfold Market Expansion
BEIJING, July 12, 2023 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology company, announced today the groundbreaking ceremony marking the start of construction for an innovative 100,000-ton corn drying base in Shihezi, Xinjiang, where one of Origin's Nutritionally Enhanced Corn (NEC) plantation bases is located. This project is spearheaded by the Company's joint venture, Baodao Origin Agritech and Livestock Co. Ltd.
The venture, bolstered by an investment of RMB 80 million, or $11.1 million, provided by Origin's joint venture partner and supported by regional financial institutions, is set to fortify Origin's Nutritionally Enhanced Corn (NEC) supply chain.
Mr. Guangju Wang, head of NEC Corn Business and General Manager of Baodao Origin, expressed, "With our revolutionary Nutritionally Enhanced Corn (NEC), we're reshaping the agricultural industry. This unique corn variety allows hogs to thrive without expensive soybean meal supplementation, thereby doubling profit margins for feedstock companies. Consequently, the resulting high demand for NEC has allowed us to expand from a $4.4 billion corn seed market to a $83.2 billion corn feedstock market. This leap enlarges our market opportunity by nearly 20-fold, emphasizing the immense potential for Origin within the corn supply chain."
Mr. Chunying Kang, County Mayor of 149th Regiment County, Shihezi, Xinjiang, expressed his appreciation, "We are incredibly grateful and delighted with the significant investment Baodao Origin Agritech and Livestock Co. Ltd. are making in modernizing Xinjiang's agricultural sector. Their pioneering efforts to establish a modern corn drying and silo facility are truly transformative. This facility is set to drastically reduce the risk of catastrophic losses, which have unfortunately become more frequent with traditional sun drying methods, particularly in the face of climate change and increasingly unpredictable weather patterns."
The state-of-the-art facility will include a drying base, a storage base, and supporting facilities. The drying base will have the capacity to process 1,200 metric tons daily, while the storage base will be able to hold up to 50,000 tons of produce. The construction is expected to complete and ready for use by mid September to meet the production needs for the upcoming 2023 harvesting season.
Dr. Gengchen Han of Origin Agritech expressed his gratitude, "We are deeply appreciative of the commitment and aligned vision for agricultural innovation shown by the government representatives. Their participation in the groundbreaking ceremony emphasizes a shared determination to pioneer agricultural modernization in Shihezi, Xinjiang. As we lay the foundation for this state-of-the-art facility, Origin remains committed to bolstering our Nutritionally Enhanced Corn (NEC) supply chain. Together with the first corn drying plant completed, we are planning to build more such facilities next year to set up a corn supply chain throughout China."
About Origin Agritech Limited
Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is a leading Chinese agricultural technology company. In crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. For further information, please visit the Company's website at www.originagritech.com. The company also maintains a twitter account for updating investors on company and industry developments, which is @origin_agritech.
Forward-Looking Statements
This communication contains "forward-looking statements" as defined in the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements address expected future business and financial performance and financial condition, and contain words like "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "would," "target," and similar expressions and variations. Forward-looking statements address matters that are uncertain. Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations which may not be realized. They are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates but involve a number of risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those discussed in forward-looking statements are: failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting our products; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; natural disasters and weather events and patterns; ability to protect and enforce the company's intellectual property rights; and separation of underperforming or non-strategic assets or businesses. The company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
Joe Ramelli
VP of Business Development
Phone: 310-845-6238
Email: joe@originagritech.com
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