China-Biotics, Inc. Signs Intention Agreement to Supply Probiotics to Bright Dairy & Food Co., Ltd.

This is the first time probiotics are being used as additives in ice cream products in China, allowing consumers to improve their gastrointestinal health through the intake of probiotics as they enjoy the ice cream.

China-Biotics, Inc., a leading Chinese firm specializing in the manufacture, research, development, marketing and distribution of probiotics products, announced that it has signed an agreement with Bright Dairy & Food Co., Ltd. to supply probiotics for Bright Dairy's ice cream products for the next three years.

China-Biotics works as an optimal solution provider for probiotics additives in ice cream products with Bright Dairy. The ice cream packaging will include China-Biotics' registered "Shining Probiotics" trademark. Ice cream sold with probiotics additives will be one of Bright Dairy's hallmark products and have higher margins than other ice creams. This is the first time probiotics are being used as additives in ice cream products in China, allowing consumers to improve their gastrointestinal health through the intake of probiotics as they enjoy the ice cream.

"We are very pleased to establish this partnership with Bright Dairy, one of the top three producers in China's dairy industry," said Mr. Jinan Song, Chief Executive Officer and Chairman of China-Biotics. "This is a significant milestone for us, marking the first time we sell probiotics as food additives; and this contract further validates the demand for probiotics food additives in China. With the increasing affluence and health awareness of Chinese consumers, we believe that the demand for probiotics additives is growing rapidly."

Currently, China-Biotics will supply the additives from its existing facility. In order to meet the demand for probiotics additives, the Company plans to build a new, 150-metric-ton production facility, which will significantly increase its capacity to meet the expected demand for bulk additives. The Company expects to commence production in the new plant during the latter part of the 2008 calendar year.