Skystar Bio-Pharm

Skystar Operations

In 2003, Skystar received approval from the State Council of China to expand its production facilities and construct a new Good Manufacturing Practice ("GMP") standard plant. Skystar has been accredited as a high-tech enterprise, and the Company's expansion project has gained full support of both Shanxi provincial government and Xi'an municipal government. The new plant has an approximate cost of US$ 12,000,000 and occupies and area of 117 acres and have a total area of about 126,900 square feet.

Skystar's facilities and facility expansion plan include:

Administration building and workshops for veterinary medicine and micro- ecological preparation labs.
A bio-pharmaceutical factory with a total area of about 40,500 square feet and three production lines (one each, for inactivated, activated and coccidiosis vaccine production).
A veterinary medicine factory that will occupy an area of approximately 38,400 square feet.
A microorganism factory for probiotics production that will occupy an area of approximately 9,000 square feet.
A building for quality control, research and development, and administration that will occupy an area of approximately 30,600 square feet.
An animal laboratory complying ABSL-2 requirements will occupy an area of approximately about 9,000 square feet.

The expanded facilities are expected to Increase Skystar's available annual Capacity to Produce:

6 billion doses of vaccine products
12,200 metric tons of micro-organisms and feed additives
50 million doses of medicines in liquid form, 200 million veterinary tablets
3,000 metric tons of powder form and other form of veterinary medicines

Skystar has over 800 independent sales distribution agents and over 300 major direct customers. To illustrate the customer diversity, no major customers accounted for more than 10% of Skystar's revenue for the 9 months ended September 30th,2008.

Skystar is actively promoting its products to create product branding and awareness. Skystar is constantly recruiting new sales distribution agents and customers through advertisements and articles in national as well as specialized and provincial newspapers, magazines, and other media. Skystar also participates in and sponsors national meetings, seminars, symposiums and exhibitions.

Skystar has four major Product Lines:

Veterinary Medications
Micro-Organism
Feed Additives
Vaccines

Skystar's Micro-Organism Product Line consists of 13 products, which includes their DLV Avian Coccidiosis Trivalent Vaccine. This is the only domestically produced avian coccidiosis vaccine product protected by China's Bureau of Agriculture. Avian Coccidiosis is one of leading causes of death for chickens in China. The Company estimates that the total demand of Avian Coccidiosis Trivalent Vaccine reaches US$ 100 Million annually.

Skystar's Bio-pharmaceutical Vaccine Product Line consists of 10 products and includes active and inactive vaccines to prevent sickness and disease in poultry, livestock and domestic pets.

Skystar's Veterinary Drug Product Line consists of over 140 products. This line is designed to cure sickness and disease in poultry, livestock and domestic pets.

Skystar's Feed Additives Product Line consists of 10 products and is designed to help maintain the health of the animal while also increasing the yield to the farmer. The domestic pet portion of this line will also help the pet to be stronger, faster and increase longevity.

Skystar has over 50 products in development . Skystar is designing a new technology that is based on a multi-surface cell propagating system. This technology offers a process that is more controllable and can easily keep up with the virus mutations. The process is more efficient and as a result can be mass-produced to keep up with high demand.

While larger international companies are focusing on vaccines to prevent people from catching avian flu, Skystar's focus is on vaccines to be administered to farm chickens and other poultry to prevent them from catching H5N1 Avian Influenza. This type of vaccine is well within Skystar's current scope and expertise and could potentially prevent an epidemic/pandemic by controlling an outbreak at the source (the poultry).

To help develop more products to serve the growing demand of the market, Skystar has partnered with two of China's leading research institutes to develop new products. The strategic partners are:

Shanghai Institute of Animal Parasitology of The Chinese Academy of Agricultural Sciences
Shanxi Microbial Institute.

Skystar's current strategy is to expand and develop product in the core product lines including advanced micro-ecological, probiotic and antibiotic products. Additionally, Skystar is also working on vaccines to fight zoonosis and drugs to fight parasitosis.

The demand for veterinary medicines and vaccines in China far exceeds the supply. The current addressable market in China for veterinary, livestock and poultry vaccines is over 70 billion doses; however the market supply is only 32 billion doses. The current addressable market in China for micro-ecologics is 3 million tons, while the current supply output is 200,000 tons. According to the Chinese Agriculture Ministry, the demand for vaccines for livestock and poultry increases at a 15% annual rate since 2002.

The estimated 2005 expenditures in China on products to just prevent parasitic diseases in livestock and poultry were US$125 million.

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Skystar Operations

Operations,Marketing and Sales Products and Market Infomation In 2003, Skystar received approval from the State Council of China to expand its production facilities and construct a new Good Manufacturing Practice ("GMP") standard plant. Skystar has been accredited as a high-tech enterprise, and the Company's expansion project has gained full support of both Shanxi provincial government and Xi'an municipal government. The new plant has an approximate cost of US$ 12,000,000 and occupies and area of 117 acres and have a total area of about 126,900 square feet. Skystar's facilities and facility expansion plan include: Administration building and workshops for veterinary medicine and micro- ecological preparation labs. A bio-pharmaceutical factory with a total area of about 40,500 square feet and three production lines (one each, for inactivated, activated and coccidiosis vaccine production). A veterinary medicine factory that will occupy an area of approximately 38,400 square feet. A microorganism factory for probiotics production that will occupy an area of approximately 9,000 square feet. A building for quality control, research and development, and administration that will occupy an area of approximately 30,600 square feet. An animal laboratory complying ABSL-2 requirements will occupy an area of approximately about 9,000 square feet. The expanded facilities are expected to Increase Skystar's available annual Capacity to Produce: 6 billion doses of vaccine products 12,200 metric tons of micro-organisms and feed additives 50 million doses of medicines in liquid form, 200 million veterinary tablets 3,000 metric tons of powder form and other form of veterinary medicines Skystar has over 800 independent sales distribution agents and over 300 major direct customers. To illustrate the customer diversity, no major customers accounted for more than 10% of Skystar's revenue for the 9 months ended September 30th,2008. Skystar is actively promoting its products to create product branding and awareness. Skystar is constantly recruiting new sales distribution agents and customers through advertisements and articles in national as well as specialized and provincial newspapers, magazines, and other media. Skystar also participates in and sponsors national meetings, seminars, symposiums and exhibitions. Skystar has four major Product Lines: Veterinary Medications Micro-Organism Feed Additives Vaccines Skystar's Micro-Organism Product Line consists of 13 products, which includes their DLV Avian Coccidiosis Trivalent Vaccine. This is the only domestically produced avian coccidiosis vaccine product protected by China's Bureau of Agriculture. Avian Coccidiosis is one of leading causes of death for chickens in China. The Company estimates that the total demand of Avian Coccidiosis Trivalent Vaccine reaches US$ 100 Million annually. Skystar's Bio-pharmaceutical Vaccine Product Line consists of 10 products and includes active and inactive vaccines to prevent sickness and disease in poultry, livestock and domestic pets. Skystar's Veterinary Drug Product Line consists of over 140 products. This line is designed to cure sickness and disease in poultry, livestock and domestic pets. Skystar's Feed Additives Product Line consists of 10 products and is designed to help maintain the health of the animal while also increasing the yield to the farmer. The domestic pet portion of this line will also help the pet to be stronger, faster and increase longevity. Skystar has over 50 products in development . Skystar is designing a new technology that is based on a multi-surface cell propagating system. This technology offers a process that is more controllable and can easily keep up with the virus mutations. The process is more efficient and as a result can be mass-produced to keep up with high demand. While larger international companies are focusing on vaccines to prevent people from catching avian flu, Skystar's focus is on vaccines to be administered to farm chickens and other poultry to prevent them from catching H5N1 Avian Influenza. This type of vaccine is well within Skystar's current scope and expertise and could potentially prevent an epidemic/pandemic by controlling an outbreak at the source (the poultry). To help develop more products to serve the growing demand of the market, Skystar has partnered with two of China's leading research institutes to develop new products. The strategic partners are: Shanghai Institute of Animal Parasitology of The Chinese Academy of Agricultural Sciences Shanxi Microbial Institute. Skystar's current strategy is to expand and develop product in the core product lines including advanced micro-ecological, probiotic and antibiotic products. Additionally, Skystar is also working on vaccines to fight zoonosis and drugs to fight parasitosis. The demand for veterinary medicines and vaccines in China far exceeds the supply. The current addressable market in China for veterinary, livestock and poultry vaccines is over 70 billion doses; however the market supply is only 32 billion doses. The current addressable market in China for micro-ecologics is 3 million tons, while the current supply output is 200,000 tons. According to the Chinese Agriculture Ministry, the demand for vaccines for livestock and poultry increases at a 15% annual rate since 2002. The estimated 2005 expenditures in China on products to just prevent parasitic diseases in livestock and poultry were US$125 million. Tab content 3 here Tab content 3 here Tab content 4 here Tab content 4 here