Origin Agritech Signs Purchase Agreements for 50,000 Metric Tons of Its Nutritionally Enhanced Corn
Origin Agritech Ltd. (NASDAQ: SEED) has signed agreements to sell 50,000 metric tons of its nutritionally enhanced corn to feedstock companies. This new corn reduces reliance on costly additives, potentially doubling company margins. The agreements stipulate that corn will be sold at market prices with an additional markup. Estimated revenue from these sales could reach around 150 million RMB. The company is evaluating the financial impact and may update its guidance. This product's launch has received positive industry feedback, enhancing food security in China amid supply chain disruptions.
- Signed agreements to sell 50,000 metric tons of nutritionally enhanced corn, boosting potential revenue to approximately 150 million RMB.
- Product reduces reliance on expensive additives, potentially doubling margins for feedstock companies.
- Strong industry interest and positive feedback from initial customer testing.
- None.
BEIJING, April 7, 2022 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology company, today announced it has signed purchase agreements to sell two feedstock companies a total 50,000 metric tons of its nutritionally enhanced corn.
Origin Agritech's new, nutritionally enhanced corn reduces the need for expensive additives such as soybean meal for feedstock companies, and thus doubles their margins. As a result of this, Origin has gotten a lot of buzz in the industry and much inbound interest. Origin has been giving samples of the corn to potential feedstock customers so that they can validate the nutritional content of the corn. The corn has passed these tests and companies now are placing orders.
Since Origin's corn has such a positive impact for feedstock companies and since the company has no competition for this product, the company decided rather than just selling the seed, it would contract grow the corn to capture much higher share of the profitability of the finished product. The company is contract growing 50,000 metric tons of the corn in Xinjiang. The feedstock companies have agreed to buy the corn at market prices at the time of delivery, plus a mark-up to reward the company for the added value of the corn. Based on current market prices for corn, the sale price could be around 3,000 RMB per metric ton or 150 million RMB in total. The company is currently evaluating the impact of this purchase agreement on the company's financials and may soon update its guidance to reflect this new business.
"We are excited by the positive reception by customers to our new corn variety," said Dr. Gengchen Han, Origin Agritech's Chairman. "In these unprecedented times of disruption in food supply chains and food inflation, I am particularly happy that we are having a positive impact on food security for 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.
For further information:
Kirin Smith
President, PCG Advisory
646-823-8656
Joe Ramelli
Director of Investor Relation
Phone: 310-845-6238
Email: joe@originagritech.com
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SOURCE Origin Agritech Limited
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