Plant nutrient and animal feed maker Yongye International Inc. reports that its second-quarter earnings more than quadrupled from a year ago on growth from its existing customer base of Chinese farmers.
Yongye International develops, manufactures and distributes plant and animal nutrient products under the Shengmingsu brand.
Although based in Beijing, China it is listed on Wall Street stock market. Yongye booked a profit of $24.2 million in the quarter ended June 30. That's up from $6 million in the same quarter a year ago.
Revenue climbed 93% to $89.4 million from $46.3 million. Yongye said a significant number of sales came from new geographic markets outside its core provinces in northern China.
Looking ahead, Yongye is forecasting 2010 revenue between $180 million and $185 million, up 83 – 89% year-over-year. The company also increased its year-end target for the number of independently-owned, branded stores selling Yongye's Shengmingsu products to at least 23,000 by the end of 2010.
Coal mine rights
Yongye expects to complete its acquisition of the development rights to a lignite coal resource project by the end of the year, and expects the construction of its new production facility to be finished this month.
Humic acid, which is extracted from lignite coal, accounts for the largest percentage of Yongye's cost of goods sold and the company said the acquisition will help it mitigate fluctuations in market prices, quality and delivery.
The new facility will expand annual production capacity for Yongye's Shengmingsu plant nutrient product from 15,000 tons per year to 35,000 tons, and boost capacity for its Shengmingsu animal nutrient product from 1,000 tons a year to 11,000 tons.
Yongye was established from Inner Mongolia Yongye Company, which had over 15 years' operational history.
From this experience, Yongye International, through its sole operating subsidiary in China, Yongye Nongfeng, aims to inherit its predecessor company's managerial experience and corporate culture to continue emulating its long-term success.
The company has developed proprietary extraction techniques and patented mixture process for plant and animal nutrient products which sell under the brand name of "Shengmingsu".
Shengmingsu in plants improves taste and nutritional value of crops while producing greater yields. In animals it improves the overall health of livestock.