By Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in Bermuda with limited liability)
(Stock Code: 875) INVESTMENT IN PRODUCTION BASE IN ZENGCHENG
This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions. The purpose of this announcement is to enable the shareholders of the Company and the public to appraise the position of the Group.
The Company is an investment holding company specializing in the agricultural related industry and its subsidiaries are principally engaged in the cultivating, processing and trading of agricultural produce. The Group is focused in the provision of high quality agricultural produce in tandem with the growing demand for vegetables and vegetable related products.
The Directors believe that in keeping with a major criteria for the healthy development of our vegetable cultivation business is the ability to complement that development with a corresponding development of a well-coordinated expansion of the facilities that are essential for maintaining a high standard of operational quality and efficiency. The production facilities include good quality farmlands, a major processing centre and cold storage capabilities for building up our supply inventory.
To complement the production bases in Ningxia in the north and Conghua in the south, the Board is pleased to announce that the Group has expanded its production bases to Zengcheng by way of the following agreements:-
Guangzhou Cypress Jade, Guangzhou Ever Rising and Ever Rising entered into the Cooperation Agreement pursuant to which Guangzhou Ever Rising agreed to sell and Guangzhou Cypress Jade agreed to purchase the assets (e.g. plant and machinery, infrastructure, etc) of Guangzhou Ever Rising in Zengcheng at the consideration of RMB8,900,000 (equivalent to approximately HK$11,125,000).
COOPERATION AGREEMENT
Guangzhou Cypress Jade, Guangzhou Ever Rising and Ever Rising entered into the Cooperation Agreement pursuant to which Guangzhou Ever Rising agreed to provide approximately 600 Mu of leased farmland in Zengcheng to Guangzhou Cypress Jade according to the terms of the existing leasing agreements between Guangzhou Ever Rising or
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its associates and the Village Committee. The remaining lease term of the farmland is approximately 7 years.
Guangzhou Cypress Jade as the lessee and the Cooperative Association as the lessor entered into the Lease Agreement pursuant to which the Cooperative Association agreed to lease
2,000 Mu of farmland in Zengcheng to Guangzhou Cypress Jade for an initial term of 15 years at the prevailing market rate.
This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the Inside Information Provisions. The purpose of this announcement is to enable the shareholders of the Company and the public to appraise the position of the Group.
To complement the production bases in Ningxia in the north and Conghua in the south, the Board is pleased to announce that the Group has expanded its production bases to Zengcheng by way of the following agreements:-
1. ASSETS TRANSFER AGREEMENT
Guangzhou Cypress Jade, Guangzhou Ever Rising and Ever Rising entered into the Assets Transfer Agreement pursuant to which Guangzhou Ever Rising agreed to sell and Guangzhou Cypress Jade agreed to purchase the assets (e.g. plant and machinery, infrastructure, etc.) of Guangzhou Ever Rising in Zengcheng at the consideration of RMB8,900,000 (equivalent to approximately HK$11,125,000).
2. COOPERATION AGREEMENT
Guangzhou Cypress Jade, Guangzhou Ever Rising and Ever Rising entered into the Cooperation Agreement pursuant to which Guangzhou Ever Rising agreed to provide approximately 600 Mu of leased farmland in Zengcheng to Guangzhou Cypress Jade according to the terms of the existing leasing agreements between Guangzhou Ever Rising or its associates and the Village Committee. The remaining lease term of the farmland is approximately 7 years.
3. LEASE AGREEMENT
Guangzhou Cypress Jade as the lessee and the Cooperative Association as the lessor entered into the Lease Agreement pursuant to which the Cooperative Association agreed to lease
2,000 Mu of farmland in Zengcheng to Guangzhou Cypress Jade for an initial term of 15 years at the prevailing market rate.
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, Guangzhou Ever Rising, Ever Rising and Cooperative Association and their ultimate beneficial owners are third parties independent of the Company and its connected persons. Cooperative Association and their ultimate beneficial owner are also third parties independent of Guangzhou Ever Rising and Ever Rising and their connected persons.
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The Company is an investment holding company specializing in the agricultural related industry and its subsidiaries are principally engaged in the cultivating, processing and trading of agricultural produce. The Group is focused in the provision of high quality agricultural produce in tandem with the growing demand for vegetables and vegetable related products.
The Directors believe that in keeping with a major criteria for the healthy development of our vegetable cultivation business is the ability to complement that development with a corresponding development of a well-coordinated expansion of the facilities that are essential for maintaining a high standard of operational quality and efficiency. The production facilities include good quality farmlands, a major processing centre and cold storage capabilities for building up our supply inventory.
As a strategic direction, the Company will focus in two areas for development, namely Ningxia, in the northern area of the PRC, as a centre for our farmland production and Zengcheng, in the southern area of the PRC, both as a farmland production and as its major processing centre with cold storage facilities. With the investment in production base in Zengcheng, the Group is able to operate with production bases in Ningxia during summer and in Zengcheng during winter. The ability to shift geographical locations is essential given the climate variation within the PRC and its effect on agricultural cultivation. Constant and uninterrupted supply of quality vegetables notwithstanding inclement weather and seasonal impact is possible and thus is essential to servicing major clients like restaurant chains and supermarkets.
With sufficient funding support from the PRC government, the Company may further expand its production base in Zengcheng for an additional 3,000 Mu of farmlands in three phases over three years.
Based on the integration of the agriculture business via its investment in a production base in Zengcheng, it is believed that the Group will become one of the leading integrated agriculture processing companies in the PRC with vegetable processing and cold storage capabilities as well as cultivation bases both in the northern part and southern part of the PRC.
Terms and expressions used in this announcement, unless the context otherwise requires, shall have the meanings ascribed to them below:
"Assets Transfer Agreement" | an assets transfer agreement dated 23 January 2013 entered into among Guangzhou Cypress Jade, Guangzhou Ever Rising, and Ever Rising in relation to purchase of assets from Guangzhou Ever Rising |
"Board" | the board of Directors |
"Company" | Cypress Jade Agricultural Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the |
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