Skystar Bio-Pharmaceutical Opens 150 Franchise Showcase Stores

17/07/07 Skystar Bio-Pharmaceutical Co., Ltd., a leading bio-pharmaceutical company in the People's Republic of China, announced that it has successfully opened 150 Skystar Bio-Pharmaceutical franchise stores during the first half of 2007.

Skystar contracted with 150 independent store owners of animal feed and healthcare products to primarily sell Skystar's products under the Skystar store name. Under the franchise agreement signed with Skystar, the stores are not allowed to sell similar products in the same category if Skystar also offers those products in the store. Each store owner is provided with a complete logo development and identity program, including a showcase counter dedicated to the exhibition of Skystar's products, informational brochures and product pamphlets. The store owners will also be provided with personal training and continuing education on Skystar's products. In addition, all stores are required to have a unified storefront designed by Skystar to reinforce the Company's corporate and brand image.

Skystar intends to open 300 franchise stores throughout 2007 as part of building a dedicated distribution channel. The first 150 stores have been opened in China's main livestock provinces of Shaanxi, Sichuan and Shandong. The stores are conveniently located in towns and villages where store owners are familiar with the local farmers and interact with them on a regular basis. There is no cost to Skystar to establish the franchise stores only a nominal expense for the store design and informational exhibits.

"Our franchise stores are an important part of our marketing and branding strategy and we are excited to announce our progress in this area. Our ability to contract with these independent store owners demonstrates the strength of our product offering and the store owner's belief in our commitment to support our brand by building an extensive product line and providing strong marketing initiatives," commented Mr. Weibing Lu, Chairman and Chief Executive Officer of Skystar. "Our franchise stores also provide us with an important dedicated distribution channel which should enhance our customer loyalty and support our future revenue and net income growth.