China Organic Agriculture, Inc. (CNOA.OB) announced that the company has reached a 3 year retail distribution agreement with Tongda Grain and Oil Company. This agreement is expected to generate revenues of 30 million Yuan, around USD $3 million, within the calendar year 2007. This agreement is the latest measure of China Organic’s stated strategic initiative to expand market share by gaining new partnerships with retail distribution system in China and other emerging industries in Asia.
According to the agreement, Tongda Grain and Oil will become one of CNOA’s authorized retailers. As a result, Tonga will offer the company’s “ErMaPao” products to over 7 million consumers in the Songyuan City, Siping City, and Baicheng City areas.
Huizhi Xia, Chairman of China Organic Agriculture, stated, “China Organic continues to expand revenues and earnings from an ever-growing list of agreements with some of China’s largest retail distribution systems. This agreement will help to continue our growth as we look to move forward with expanding our distribution systems and broaden our share of the rice market in Songyuan City. With the recent announcements of agreements, we look forward to reaching our target revenue goals for 2007.”
After this news was released, China Organic’s stock rose 5.90%. Specifically, an above average 443,000 shares were traded, whereas the daily average is only 99,000 shares. This significant surge in volume contributed to the overall share price increase, and the increased volume could continue within the upcoming trading sessions.
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