Retailing, Franchising, and Consumerism Business Intelligence in China

China Organic Announces Retail Distribution System Agreement

China Organic Agriculture announced that the company has reached a milestone agreement with Nanjing Suguo Supermarket for distribution of organic food.

Suguo is a large supermarket chain in China with annual sales reaching US$3 billion, 70% of those revenues are derived from agricultural and related items such as China Organic's ErMaPao rice products. Suguo currently operates more than 1,600 locations, with plans in lace to expand to several hundred more. Suguo accounts for approximately 50% of the market share in China's Nanjing City of Jiansu Province.

"This is yet another threshold event in our relentless drive to dominate the rapidly expanding market for organic and high-quality foods in China," said Jian Lin, CEO of China Organic Agriculture. "While most American investors may not have heard of Suguo, they are among the most well-known and trusted supermarket chains in our nation. We are confident that this partnership will be a significant driver of shareholder value well into the future."

According to the agreement, Nanjing Suguo supermarket will become one of China Organic's authorized retailers in the supermarket chain store industry directly, selling "ErMaPao" award-winning series of products.

China Organic Agriculture is among the largest producers of organic rice in China commanding a 40 percent market share. COA controls all aspects of the process from seeds to planting and processing, R&D and sales. The proprietary processing factory is 20,000 square meters and has an annual production capacity of 30,000 tons. The Company also has an extensive sales network, located in the major cities in China.

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