LCP Lon.Asia China

RNS Number:5134Y
London Asia Chinese Private Equity
18 June 2007

18 June 2007



                London Asia Chinese Private Equity Fund Limited

                            ("LACPEF" or "the Fund")



                 Investment in Eco-friendly Pesticides Business



LACPEF, the China focused investment fund, has invested #2.7 million for a 25%
stake in Hainan Zhengye Zhongnong High-tech Co., Ltd (the "Company" or "HNZY").
HNZY develops, produces and sells environmentally friendly pesticides and
fungicides.  The Company has also developed a hybrid corn seed for the Chinese
agriculture industry.



HNZY markets its products through over 130 staff and a well established sales
network of 3,300 product sales and services centres, covering all major farming
areas in 28 of China's provinces.  With the increasing trend to replace
conventional toxic pesticides with more environmentally friendly solutions, HNZY
is well positioned to exploit this fast growing market.



The Company, which intends to export its products to other developing countries,
is planning to list on the Shenzhen Stock Exchange and has already appointed one
of the top ten securities houses in China as the underwriter.



HNZY was established in 1998. By 2001, HNZY was conferred the award of 'Leading
Agricultural Chemical Enterprise' in Hainan. In 2005, the hybrid corn seed
research was designated as part of China's prestigious 'National Torch Plan'
Program. In 2006, Hainan Province Marine Organism Agricultural Chemical Project
Technology Research Centre was established by HNZY to further R&D in marine
organism agricultural chemicals.



Eco-friendly pesticide and fungicide products typically sell at a much higher
margin than conventional pesticides due to increasing concern regarding food and
pesticide safety.  HNZY provides its pesticide and fungicide control solutions
with an environment-friendly delivery system, which minimizes residual toxicity
while delivering equal, if not better, performance compared with conventional
chemical pesticides.



In addition to its pesticide and fungicide product range, the Company has also
developed two hybrid corn products, which are already registered with the
Ministry of Agriculture.



The first, 'High Oil Corn', contains twice the oil content of other varieties
and is ideal for feeding livestock. HNZY's second product 'Super Sweet Corn' has
been developed so that 34% of the corn's content is water soluble sugar,
enhancing the flavour. The Company's R&D seed division is continuing to develop
new products using its internationally patented high-tech corn hybrid
technology.



Simon Littlewood, Director of the Fund, said: "China is a developing country
with 60-70% of its people engaged in agriculture. With 7% of the world's arable
land, China has to feed  over 20 per cent of the world's population.  Food
security is of high priority and speeding up the development of agriculture is
one of the primary tasks of the national economy. HNZY has already developed
patented products for this huge and fast growing market.  With an established
sales and marketing network we believe this is the right time to invest, ahead
of a domestic stock market listing."



                                     -ends-



For further information please visit www.londonasiafunds.com or contact:


John West/Andrew Dunn              Simon Littlewood                Hugh Field
Tavistock Communications           London Asia Capital plc         Collins Stewart Europe Limited
Tel: 020 7920 3150                 Tel 020 7231 0282               Tel: 020 7523 8000



Notes to Editors



The Market for Eco-friendly Pesticide and Fungicide Solutions



The growing market for crop protection products is due to rising populations,
and the need to maintain a sustainable food production to feed the over 200,000
increase per day in the human population worldwide. It took until the early
1800's for the human population to hit one billion people, at which point 65% of
them lived in Asia, and 127 years till the population rose to two billion. It
took only 12 years for the population to rise from five billion in 1987 to 6
billion in 1999, with over 60% in Asia.  The UN is predicting an increase to
nearly 9 billion by 2050.



Currently, loss of crop due to pest is estimated to be US$300 billion annually
and effectively managing pest threats is vital for better food production.



The market for crop protection products in China has been increasing for the
past four years - agricultural production in China increased at a CAGR of 7.6%
for the period from 1990 to 2005.  China is the largest consumer of pesticides
in the world. High toxicity pesticides' share of the market in China was
70%-80%, the use of which has led to pesticide migration, toxin deposit in soil
and water tables, resulting in severe damage to the agricultural ecosystem by
decreasing the index of biological diversification and affecting the food chain,
impacting on natural predators. The problems of pest resurgence, resistance and
toxin residue deposits have become even more serious. Consequently, pest control
today confronts increasing challenges of more resistant and numerous pests,
leading to stronger dosages and increased costs.



At present, demand for biopesticide products is around 2-3% market share of
agricultural chemicals. Within the next ten years, biopesticide products are
estimated to take a market share exceeding 20% of agricultural chemicals.
Drivers of demand for biopesticide products include environmental and health
concerns arising from the use of conventional pesticides and the high costs
associated with disposing of obsolete pesticides. The biopesticide products and
eco-friendly chemical products industries in China are expected to grow rapidly,
due to the advantages the products offer the environment and general health and
Chinese government policy requiring replacement of 80% of existing pesticides
with eco-friendly chemical products.

Hybrid Corn Seeds

China's sales of agricultural products is currently estimated to be RMB 20
billion, the second largest in the world and an estimated 9% of global trading
of seeds. China's market for seeds is approximately 12.5 billion tonnes and
hybrid corn seeds has been stable at 800 to 900 thousand tonnes per annum.



With over two years of experimental cultivation in 165,000 acres of farmland in
three provinces in China (Xinjiang, Inner Mongolia and Hainan), the company is
now preparing to formally introduce its corn seed products by the end of 2007.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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