China Green Agriculture
China Green Agriculture manufactures, markets and sells fertilizer products to private wholesalers and retailers of agricultural farm products in 27 provinces in China.
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China Green Agriculture expects salues volume to increase 40pct a year
China Green Agriculture Inc (NYSE: CGA) updated investors on its forward looking sales strategy for fiscal years 2010 through 2012. China Green produces and distributes humic acid based compound fertilizer. Though increased marketing exposure and the roll-out of directly-owned retail stores the company intends to increase sales significantly to utilize its new production capacity, which has more than tripled since September.
The company currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products across most provinces in People's Republic of China.
China Green Agriculture recently adopted a sales strategy to significantly increase brand awareness of its "Jinong" fertilizer products among millions of farmers throughout China. The Company has already begun implementing specific marketing tactics through existing distributors in China which are aimed at improving its product messaging.
In an effort to reach its goal of full production capacity utilization during the next three years, the Company intends to focus its marketing efforts on the quality image of "Jinong" through its distributors as well as retail stores which carry the products.
As an extension of this growth strategy, the Company plans to increase both top-line growth and gross margins by opening directly-owned retail stores, which will offer the "Jinong" organic compound fertilizer products directly to farmers and other end users. The pilot program is expected to be launched in January 2010.
The chain stores will be strategically located in various cities with highly visible storefronts displaying the China Green Agriculture brand name. Each store will have an assigned territory and will not compete with any of the Company's existing 530 distributors or any future distributors.
The success of the program will be evaluated by measuring specific performance targets taken during a six-month time frame, which includes, but is not limited to, total sales volume generated, profitability, days sales outstanding (DSO), Return on Investment (ROI) and brand awareness.
China Green Agriculture expects to increase sales volume by at least 40 percent per annum over the next three fiscal years. The company anticipates strong sales of its organic compound fertilizer products. The new sales strategy follows the substantial increase production capacity from 15,000 metric tons to 55,000 metric tons. In September the company unveiled its new modern production line which more than tripled the company's production capacity.
The new facility incorporates a higher degree of automation, following the company's track record as the first company in China to build a fully automated manufacturing system which precisely measures and mixes key ingredients to formulate its unique fertilizer products.
China Green Agriculture's new facilities include 27 vats for mixing ingredients and pharmaceutical grade, electronically calibrated measuring equipment spread over approximately 148,000 square feet. The Company expects to reach full utilization of its 55,000 metric ton capacity over the next three years.
China Green's management expects revenue contributions from the Company-owned retail stores to enable future margin growth. China Green Agriculture CEO, Mr Tao Li commented on the company's forward looking strategy:
"Following the recent success in expanding our production capacity, we expect robust sales of our branded organic fertilizer products ... the newly implemented sales strategy will further differentiate ourselves in this fragmented market and enable us to become one of the leading Chinese fertilizer producers within the next three to five years."
Other China Green Agriculture news
- China Green Agriculture Q4 net income grows 239pct
2009-09-16 - China Green Agriculture to present at Susquehanna Beijing Management Summit tomorrow
2009-09-15 - China Green Agriculture opens new 40,000-ton production line
2009-09-01 - China Green Agriculture to raise US$25m via shelf offering
2009-07-22
