About YaSheng Group

Yasheng Group, through its subsidiaries, designs, develops, manufactures, and markets farming and sideline products; chemical materials and products; textiles; construction materials; and livestock and poultry. The company also designs, develops, and markets new technologies related to agriculture and genetic biology. It produces specialty agriculture based products, specializing in developing the agriculture industry by cultivating, processing, marketing, and distributing various food and agro-byproducts. Agricultural Market The company's primary business segment is premium specialty deep processed food and agricultural by- products. It specializes in cultivating, processing, marketing, and distributing various specialty agriculture product grown in Northwest China. A substantial portion of the company’s products are classified as ‘Green Food’. Its product portfolio includes perishables and processed foods sold in volume, repackaged into units, or sold directly to consumers in local markets. The company produces main staples for animal feed, fertilizers, and agro-industry products, such as edible oils, or bio-construction materials. It also grows various fresh fruits and produce, which it supplies the local and provincial markets. Agricultural Products The company’s primary product offerings included approximately 30 agriculture products under six areas, such as field crops, including cotton, corn, barley, wheat, flaxseed, and alfalfa; vegetables, such as onion, potato, beet, and pea; fruit, such as apple, pear, and apricot; specialty crops, such as hops, wolfberry, cumin, hemp, and liquorices root; seeds, such as black melon seeds, sunflower seeds, corn seed, hemp seed, and flax seed; and poultry, such as eggs. The company also produces additional fresh fruits and vegetables, which supply the local and provincial markets. Agricultural Production Markets The company's products are marketed in various categories of agricultural production markets. Strategic commodities are produced to supply domestic demands. These products are sold directly to a network of local, provincial, and national purchasing houses based on the global market price managed by the People’s Republic of China agriculture department. The products are then resold to processors for use in various industries. Institutional contract growing is a large part of the company’s business model. Institutions and large food and beverage processors establish long term contracts to grow products that meet the processors needs and standards. Consumer direct wholesale Markets purchase its perishable fruit and produce to sell to the public. These products are sold directly, as well as through small distribution companies and sold on a locally, provincially, and nationally. Domestic and export food distribution companies pre-arrange volume purchase contracts for its fresh and processed products of the company. These products are distributed to high end markets, such as Hong Kong, other coastal cities, and for export. The products are then sold to the public through supermarkets and or sold to food processors. Animal Husbandry division consists primarily of eggs to be sold fresh and or packaged to wholesale food markets for resale to consumers. Sales and Marketing The company's products are sold directly to buyers and distributed through food suppliers. It also belongs to the strategic commodities distribution network as a preferred supplier. A major portion of the company’s business is contract growing for institutional food and beverage processors and sold directly to processors. The company sells its products to both distributors and direct customers across 19 provinces in China, including: Gansu, Shanxi, Beijing, Shandong, Liaoning, Guangdong, Tianjin, Shanghai, Ningxia, Qinghai, Hebei, Inner Mongolia, Xinjiang, Jilin, Hubei, Guizhou, Xizang, and Hainan. It exports its products indirectly through the Chinese companies with import and export qualification and licenses. The company’s distributors sell its products to their various customers, including food processors, supermarkets and wholesale stores. Strategy The key elements of the company's strategy are to hold and grow existing domestic market positions with premium quality products with a focus on customer satisfaction with consistent availability; continue the transformation from the collective family farms to industrial scale farming resulting in more control over the quality, consistency, and yields of its products; expand product line with new byproducts by utilizing modem processed food technology that produces high quality products and environmental friendly products that meet the demands of the domestic and international markets; strengthen industry research focusing on shifting trends and demands for strategic cultivation; continue to implement product quality upgrades through high tech agro technology; expand domestic and international business development and sales departments to open the doors to new markets; expand animal husbandry division, agriculture chemicals, fertilizers, animal feed, and environmental products and continue to implement the vision as leading company in sustainable agricultural practices; and continue to develop high end environmental products. Seasonality As a result of seasonal sales price fluctuations, the company has historically realized a greater portion of net sales and of gross profit during certain quarters of the year (year ended December 31, 2015). The sales price of agricultural products item fluctuates throughout the year due to the supply of and demand for that particular item, as well as the pricing and availability of other agricultural items, many of which are seasonal in nature. Trademarks The company owns eight the People’s Republic of China registered trademarks, including ‘YASHENG’, ‘TIAO SHAN’, ‘XIA HE QING’, ‘LV JIA’, ‘XING WEI’, ‘LIN DAN’, ‘TING TAP’, ‘TAI YU’ ‘ JIUAN’ ‘ANGEL STAR’. Regulations The company is subject to the Company Law of the People’s Republic of China; Labor Law of the People’s Republic of China; Insurance Law of the People’s Republic of China; The Food Safety Law of the People’s Republic of China; Patent Law of the People’s Republic of China; Law of the People’s Republic of China on the Prevention and Control of Water Pollution; Law of the People’s Republic of China on Scientific and Technological Progress; and Energy Conservation Law of the People's Republic of China. Competition The company’s competitors include China National Cereals, Oil and Foodstuffs Corporation, and China Grains and Oils Group. History Yasheng Group was founded in 1998.