Enping City A Power Beef Cattle Farm 2 Co., Ltd. (EAPBCF) is known in the Company as Cattle Farm 2.
Complementing Cattle Farm 1, Cattle Farm 2 comprises an additional 76 acres of land suitable for growing the Group's type of pasture (a cross between elephant grass and yellow grass) that has a very high yield rate of over 35 MT per 1/6 acre per year, and containing an average of over 9 percent protein that is very suitable for the consumption by cattle. Between the two farms, under normal seasons, they have a capacity to produce up to 30,000 MT of pasture/year collectively that is capable to feed up to 5,000 head of cattle/year based on the consumption rate of average of 6 MT/head.
Cattle Farm 2 is situated in Guangdong Province, Guangzhou City. Operated by a private company formed in China with Chinese citizens acting as its legal representative as required by Chinese law, EAPBCF will become a Sino Agro Food subsidiary when its Sino-Foreign Joint Venture (SFJV) company is officially formed. This is expected to occur during 2016 or 2017 pending availability of free cash flow of the Company; however, no guarantee can be made that the SFJV will be formed.
Macau Eiji Co., Ltd. (MEIJI) is the marketing and distribution agent for all cattle farms that are and will be developed by MEIJI using its "Semi-free growing" management systems and aromatic-feed programs and systems to grow beef cattle. Similar to CA in its business model, MEIJI purchases fully-grown cattle from Cattle Farm 1 and sells them to the cattle wholesalers. MEIJI also buys young cattle from other farmers and sells the young stock to Cattle Farm 1. All cattle farms developed by MEIJI will utilize its "semi-free growing" management system and aromatic-feed programs and systems to raise beef cattle.
Beef is traditionally a high-end market in China, as it is mainly sold to expensive restaurants or upscale hotels rather than to Chinese consumers. This situation is rapidly changing, though, owing to urbanization and rising incomes, the rising demand for a high protein diet, and the rise in restaurant dining due to work demands.