Dear Shareholders,
2017 was a historic and record setting year for Kiwa Bio-Tech. Over the past 12 months, Kiwa Bio-Tech has demonstrated that our market-responsive approach, commitment to research and development and focus on extending longer-term credit to our customers achieved a positive reputation in the agricultural industry. Amidst very promising agricultural market conditions worldwide and with recently implemented governmental policy supports in China, the Company believes 2018 sales and earnings will surpass our 2017 numbers.
In addition to record sales and earnings in 2017, Kiwa Bio-Tech took many important steps to build up experimental and demonstration sites in China to promote our innovative fertilizer products. We remain committed to optimizing our product portfolio and will continue to upgrade our agricultural technology to meet market demand.
OUR PERFORMANCE AND STRATEGY
Playing a key role in developing eco-friendly agriculture and delivering long-term value for all of our stakeholders requires strong performance in several areas.
First, I am proud to say that Kiwa Bio-Tech has sold and shipped approximately $19 million of fertilizer products in this year ended December 31, compared to approximately $9.6 million during the same period in 2016, which is an increase of approximately 98%. Achieving this significant growth was due in part to the Company expanding its sales teams and distribution channels in Northwest, Eastern, and Southern China.
Based on the cooperation between Kiwa Bio-Tech and China Agricultural University, Chinese Academy of Agricultural Sciences and ETS Research Center of Chinese Academy of Sciences, Kiwa was able to finish product segmentation and apply certain new products to the national soil restoration project.
Kiwa Bio-Tech has also established strategic cooperative relationships with Northwest Agricultural University, Northwestern University, and Harbin Institute of Technology, which provide cutting-edge technology for Kiwa Bio-Tech.
In July 2017, Kiwa Bio-Tech made a proposal to establish China’s eco-friendly agriculture standard based on the cooperation with the China Agricultural Products Processing Industry Development Association. The proposal enjoys a high degree of credibility in upgrading the standard system for the eco-friendly agricultural industry and the agricultural products market in China, which we believe provides significant market opportunities for Kiwa Bio-Tech over the next 3 to 5 year term and thereafter.
POSITIONED FOR LONG-TERM SUCCESS
2017 was a year that propelled the company forward, positioned Kiwa Bio-Tech to be successful in very promising market conditions and enhanced our ability to thrive as demand increases for our innovative products. Throughout the year, the Company continued to focus on positioning our company for the future:
Enhanced Marketing Plan
Kiwa Bio-Tech has established a three-part initiative with respect to planting eco-friendly crops, selling green agricultural products and soil conservation consistent with the standards of the agricultural industry.
In 2017, our marketing program was implemented in Shanxi Province, Shandong Province, Hainan Province, and Xinjiang Uygur Autonomous Region. Due to our proactive marketing campaign, Kiwa Bio-Tech’s products have been used on cash crops including, apples, grapes, kiwi fruit, cantaloupe and vegetables, in green houses in approximately 82,368 planted acres.
Corporation Development and Expansion
Our manufacturing base in Penglai, Shandong Province, will soon commence production after the installment of facilities in 2018. When fully operational, the factory will produce approximately 200,000 tons of Kiwa fertilizer products every year.
We will establish a new subsidiary company in Yangling, Shaanxi. Yangling is the only Pilot Free Trade Zones with a special focus on agricultural development that epitomizes the development of modern agricultural industry chain. As the agricultural “Silicon Valley” of China, Yangling could attract government incentives, high-tech agricultural companies and logistics companies. Kiwa Bio-Tech’s first strain fermentation manufacturing base will be developed and built in the Pilot Free Trade Zone.
Meanwhile, we will also gradually establish as many as 1800 experimental and demonstration stations across China to promote our products.
Increased Financial Competence and Strategic Cooperation
Kiwa Bio-Tech selected new auditors in the past year that further audited our previous financial reports. We have also hired additional financial consultants to improve Kiwa Bio-Tech’s ongoing financial competence.
Of significant importance, Kiwa Bio-Tech has signed a strategic agreement with the Beijing Jingnong Public Welfare Foundation. A major highlight of the agreement is the selection of Kiwa Bio-Tech as the technical support company to address the issue of polluted soil in Mainland China.
Growing Market
Kiwa Bio-Tech also announced a cooperative venture with China Association of Traditional Chinese Medicine, where the association will apply our core technology and products to the development of the Safety Standards of Chinese Traditional Medicine Planting.
In 2018, we expect the Company will significantly increase its share of the Chinese agricultural market. Kiwa Bio-Tech also looks to growth through entry into the soil restoration market.
Kiwa Bio-Tech achieved tremendous success in 2017, and we believe that the Company is well positioned for 2018 and beyond. Our progress and financial success could not have happened without our employees. I offer my personal thanks for their valuable contributions to our company. As a leader in China for developing the environmentally friendly eco-friendly agriculture industry, we believe that Kiwa Bio-Tech is uniquely positioned to build value for our shareholders and make an enduring contribution to a safer and healthier world.
We plan to make 2018 a great year!
Yvonne Wang
Chief Executive Officer
January 8, 2018
This letter contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described by the forward-looking statements. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission. The forward-looking information provided herein represents the Company’s estimates as of the date of this letter and subsequent events and developments may cause the Company’s estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company’s estimates of its future financial performance as of any date subsequent to the date of this letter.
CONTACT INFORMATION
CONTACT:
Kiwa Bio-Tech Products Group Corporation
Molly Han
