"...Domino Foods, Inc. (“Domino Sugar”) to sell our Reb A 60 and higher grades of stevia. The term of this agreement is effective through December 31, 2012, and is renewable thereafter from month to month unless terminated by either party upon 30 days notice. The agreement provides that quantities and prices for the stevia ingredients will be included in purchase orders which will include agreed on pricing. Payments will be made on account on a net 30 days basis. In fiscal 2012, we did not have any sales to Domino Sugar under this agreement. ..." " ...NOTE 15 – SUBSEQUENT EVENTS During the fourth quarter of fiscal 2012, Sunwin was in negotiations with Wild Flavors, Inc. for the purchase of the remaining 45% interest owned by Wild Flavors, Inc., in Sunwin USA. Sunwin currently owns 55% of Sunwin USA. The terms of the deal are being formulated and it will probably involve a combination of common stock and cash, with Wild Flavors assuming some liabilities. ... " "... Expansion plans In September 2011, Qufu Shengwang acquired the minority interest in Qufu Shengwang from Korea Stevia Company, Limited. On July 1, 2012, Qufu Shengwang entered the Cooperation Agreement with Hegeng (Beijing) Organic Farm Technology Co, Ltd. (“Hegeng”), a Chinese manufacturer and distributor of bio-fertilizers and pesticides, to jointly develop the bio-bacterial fertilizers based on the residues from our stevia extraction. Under the Cooperation Agreement, Hegeng provides strain and formula that we apply to the stevia residues to produce bio-bacterial fertilizers in the current facility of Qufu Shengwang. The bio-bacterial fertilizers will be distributed under Qufu Shengwang’s name. We plan to start production in fiscal 2013. No additional investment in the facility would be required. Our facility has an estimated annual capacity to produce 10,000 metric tons of bio-bacterial fertilizers. In April 2012, Qufu Shengren also started the construction of a new stevia extraction line in the same location of its current stevioside manufacturing facility. This line facility will apply a new stevia extraction technology to produce both high and low grade stevioside. The target annual production capacity of this line facility is estimated at 500 metric tons including 300 metric tons of high purity rebaudioside A products and 200 metric tons of low purity rebaudioside A products.We expect that the total cost of this new line will be approximately $4.7 million which will be funded from generated revenues and our working capital.We expect this new line facility to start trial production in October 2012. ..."
"... Our Outlook We believe that there are significant opportunities for worldwide growth in our Stevioside segment, primarily in the U.S. and EU. For fiscal 2013 and beyond, we will continue to focus on our core business of producing and selling stevioside series products. Some of the recent favorable observations related to the stevia markets in fiscal 2012 include: • | Chinese domestic food and beverages, particularly herbal tea manufacturers and the pharmaceutical industry, have increased the use of steviosides; | • | In November 2011, the European Union authorized the use of steviol glucoside derived from the stevia plant for EU-wide use in certain foodstuffs; | • | Southeast and South Asia have renewed and increased their interest in stevia, particularly high grade stevia. | • | We were notified in November of 2011 that our stevia extracts production process has been certified organic under standards established by the USDA National Organic Program and European Commission (EC) 834/2007 and EC 889/2008 which will further expand the use of our organic stevia products in the food and beverage industry market in the US and Europe; | • | We signed a Domino Sugar in December 2011 for the sale of our stevia products which we hope will further develop our market share; | • | The marketing strategy to differentiate ourselves as a producer of higher quality stevia grades and product formulations through these collaboration efforts will lead to sustainable growth in stevia sales volume in the future; | • | Started construction of new stevia extraction line in April 2012 for trial production anticipated in October 2012. This new line will add additional 500 metric tons to our current annual production capacity; and | • | On July 1, 2012, Qufu Shengwang entered the Cooperation Agreement with Hegeng, a Chinese manufacturer and distributor of bio-fertilizers and pesticides, to jointly develop the bio-bacterial fertilizers based on the residues from our stevia extraction. |
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