Singapore, Feb 13, 2008: China Agro-Technology (CAT) has acquired the planting and land use rights for 494,200 acres of land in Indonesia for the purpose of generating revenues from a plantation for Jatropha plants. The agreement was signed on February 5, 2008 with Boulevard Holdings for the acquisition rights in growing Jatropha, managing Jatropha plantations, and harvesting Jatropha seeds to be crushed for its production of non-edible vegetable oil for bio-diesel and its other biomass components. The strategic acquisition allows CAT to diversify its growth and reduce risk in the Jatropha industry. Management believes that the acquisition will be worth over $300 million within five years based on projected global demand for Jatropha by-products.

 

Jatropha plants produce seeds containing up to 40 percent oil. When the seeds are crushed and processed, the resulting oil can be used in a standard diesel engine, while the residue can be processed into biomass to power electricity plants. The by-products are often cited as a clean, green and prime source for global biodiesel supply. The price of Jatropha-based biodiesel has historically been highly profitable, ranging from $650–750 per ton, based on current negotiated market futures.

 

CAT Founder Chairman Dr Harry He said, "We expect CAT's Jatropha production path to begin with immediate revenues from the sale of crude Jatropha oil (CJO) from existing harvests. We will concurrently apply our innovative agro-technology processes to accelerate growth and yield for the plantation.”

 

The new acquisition was completed with 30 percent cash and 70 percent newly-issued shares at a premium conversion of $2.10 via convertible bonds. The acquisition significantly expands CAT's current portfolio of approximately 50,000 acres of Jatropha plantations in Indonesia. CAT previously forecast a fair profit value of $45 million for the remaining fiscal year 2008 and will continue to focus on agro-technological research and development for future growth based on its existing profitable operations.