China Kangtai Cactus Signs Manufacturing Agreement with Shandong Tobacco Company

Source from:  Business Wire 12/16/2010

China Kangtai Cactus Biotech Inc. (OTCBB:CKGT), a vertically integrated grower, developer, manufacturer and marketer of a variety of cactus-based products in China, has signed a joint manufacturing agreement with China Tobacco Import and Export Shandong Corporation (China Tobacco Shandong), a subsidiary of China National Tobacco Corporation, to manufacture cactus cigarettes under the name of "Tai Shan Sheng Chao." The Shandong Province Government authorized the agreement in November. The company will manufacture this new brand using a new paper process technology with China Tobacco Shandong's subsidiary, Qingdao Cigarette Factory. Plans are to begin full production in February 2011. Qingdao Cigarette Factory, established by United Kingdom Tobacco Company in 1919, is a well-established tobacco company with high-end technology and advanced equipment. Its parent company, China Tobacco Shandong, founded in 1985, mainly exports and imports tobacco and tobacco manufacturing equipments. In its 25 years of operations it has exported over 216,000 tons of tobacco to 30 different countries and has accumulated over $461 million in revenue. China Kangtai Cactus CEO Mr. Jinjiang Wang said, "This agreement is a very important breakthrough for our cactus cigarette business. In China, cigarette manufacturing is a government monopoly, which designates only one cigarette brand for each province. We are now the first publicly held company to sign a joint manufacturing agreement with a government-owned cigarette manufacturer. This will enable us to make important progress in growing market share for our products and further enhances our revenue growth potential." China Tobacco Shandong General Manager Jianli Bi said, "This agreement creates mutual benefit for both companies. The low-nicotine and non-nicotine cactus cigarette product coincides with the government's initial step to promote less harmful products to the huge smoking population in China. It is estimated that more than 300 million people in China are regular smokers. Furthermore, we plan to export "Tai Shan Sheng Chao" cigarettes to Russia, South Korea and Japan through our established sales channels. We are confident that cactus-based cigarettes have a promising future to broaden shareholder value for both companies in a long term." Enditem