Vancouver, B.C., April 18, 2008 - GLG Life Tech Corporation announced today that it has signed a 20-year agreement with the government of Juancheng County in the western Shandong Province of China, which gives GLG exclusive rights to grow high quality stevia leaf and build and operate a stevia processing factory as well as the exclusive right to purchase high quality stevia leaf grown in that region.
The Juancheng County government will also organize and the company will contract the farmers in the region to grow high quality stevia leaf exclusively for sale to GLG for the same 20-year period.
The agreement calls for the growth of 20,000 mu (approximately 3,300 acres) in 2008; 50,000 mu (approximately 8,300 acres) in 2009; 100,000 mu (approximately 16,600 acres) in 2010; 200,000 mu (approximately 33,300 acres) in 2011 and 300,000 mu (approximately 50,000 acres) in 2012. With this agreement, the land now available to GLG for stevia leaf growth in 2009 increases GLG’s exclusive growing areas by approximately 30%. This agreement marks the third such exclusive agreement from which GLG will benefit and is an important milestone to provide geographic diversification from its other two exclusive growing areas in the provinces of Anhui and Jiangsu. It is also important as GLG works to develop the supply of high quality stevia leaf to meet anticipated higher market demands.
GLG is obligated to make a total investment in the Juancheng region of $US 60 million over the course of the 20 year agreement to retain its exclusive rights. The first year commitment is to build a 10,000 metric ton stevia leaf processing facility between October 1, 2008 and September 30, 2009. This capacity expansion is required within GLG’s current operating plan.
GLG intends to purchase 800 mu (approximately 130 acres) of deeply discounted land in the Juancheng Economic Development Zone to locate this fourth processing plant. Construction of the first phase of the leaf processing facility is expected to be completed in the fourth quarter of 2009. The Juancheng government will further provide GLG access to all necessary utilities for plant operation and ensure GLG has all certificates and permits needed for construction and operation of the facility.
Dr. Luke Zhang, Chairman and President of GLG stated, “This agreement represents significant progress for the company as we continue to strengthen our position as a world leader in the growth and production of high quality stevia. This growing area is an integral part of GLG’s operating plan given the expected increase in high quality stevia extract production for each of the next few years as well as the anticipated growth in demand for high quality stevia over the next decade.”
Agricultural High Tech Development, Ltd. (AHTD), which was recently acquired by GLG, has been commercial plot testing the growth of high quality stevia in the Juancheng area for the past five years leading Dr. Zhang to further state, “The results of our research and experience in this area over the past five years give GLG great confidence that Juancheng is poised to become one of the most productive stevia areas in China over the next five years.”
About GLG Life Tech Corporation
GLG Life Tech Corporation specializes in growing, refining, and producing high grade stevia extract, a natural, zero-calorie sweetener. With fully integrated stevia operations, GLG is the leading supplier of high quality stevia production in China. The Company is also engaged in the distribution of nutritional products in China and holds exclusive agreements with Weider Global Nutrition and Shandong Yong He Tang Health Products Chain Stores Ltd., whose franchise network includes over 1,200 locations.