Kiwa Shandong Signs CNY150 Million Fertilizer Contract

Kiwa Bio-Tech Products (Shandong) Co., Ltd. has signed fertilizer sales contracts totaling CNY150 million with Jilin Tianma Science & Technology of Agriculture Co., Ltd. and other distributors.

Delivery of products under these contracts will be carried out from August 2008 through March 2009.

Prior to entering into these agreements, Kiwa Shandong had received approval from the Ministry of Commerce of the PRC for wholesaling other companies' fertilizer products; updated its business registration; and filed for exemption from VAT, under applicable Chinese laws and regulations. The Company has also entered into purchase contracts with Jiangsu Zhongdong Group for relevant fertilizer products.

Kiwa Shandong has recently adjusted its product mix in cooperation with Jiangsu Zhongdong Fertilizer Group with a focus on developing new compound bio-fertilizers. Kiwa Shandong is also continuing to develop new organic fertilizers to meet customer demand and is expected to introduce new bio-fertilizer products for sale in the Chinese fertilizer markets by the end of 2008. Starting in June 2008, Kiwa has been working closely with Jiangsu Zhongdong Group Co., Ltd. to develop and market products. This announcement reflects contracts signed as part of previously announced sales expectations of USD10 million in the next six months.

Wei Li, CEO and chairman of the company, stated, "We are pleased by the number of new customers and very large contracts signed at the end of June 2008. Delivery of these fertilizer products and recognition of revenues will begin in and significantly raise revenues in the third quarter. While second quarter revenues will be improved they will not reflect the significant rapid growth we expect in the second half of 2008."

Li added, "Importantly, these agreements will also promote development of Kiwa's bio-fertilizer distribution networks by building strategic alliances with large traditional chemical fertilizer dealers. We expect that distributing other companies' fertilizer products will be a driver of Kiwa's sales revenue. The Company is now applying itself to adjusting its product mix, developing compound fertilizers and other new fertilizer products through cooperation with Jiangsu Zhongdong Group. It is expected that before the end of 2008, part of the Agreements will be executed with newly developed products."

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