On March 12, 2008, Zhongpin began construction of its new processed meat facility with an annual production capability of 28,800 metric tons, bringing Zhongpin’s total capacity of prepared meats to 54,000 metric tons. Construction is moving forward on schedule and the company is currently evaluating and purchasing equipment for the facility. Zhongpin plans to equip its prepared meat facility with over 40 pieces of the most advanced, automated, state-of-the-art equipment, including sausage filling and cooking equipment, from top-tier equipment manufacturers in Germany. Zhongpin has twice sent members of its research and development team to Europe to evaluate equipment and the latest technology. Other supporting equipment will be provided by Chinese manufacturers. By combining imported and domestic equipment, Zhongpin can lower capital investment while guaranteeing that the quality of its products will meet international standards. The Company is confident that the prepared meat facility will begin production in September 2008 as planned.

Construction of Zhongpin’s new factory in Luoyang City, Henan province is also proceeding on schedule and the company expects to begin trial production at the end of June. Zhongpin is in the process of signing supply contracts with hog producers in the surrounding areas and has signed letters of intent with several major farms and sales agents for the purchase of more than 2,000 hogs per day. Zhongpin’s marketing and sales divisions have completed market research, identified target markets and signed letters of intent with Zhongpin’s major customers. In addition, staff for the Luoyang facility is being trained in the most effective processes and procedures at the factory at Zhongpin’s headquarters in Changge as well as its facilities in Zhumadian and Anyang. Once completed, the new processing facility will add 70,000 metric tons of annual capacity of chilled and frozen pork.

Construction at Zhongpin’s eastern Henan Province facility in Shangqiu City continues and the facility is expected to begin operations in the fourth quarter of 2008. Once the new western and eastern facilities are completed, Zhongpin will have total capacity of 471,560 metric tons of chilled and frozen pork, excluding outsourcing from OEMs.

"Our new factories in eastern and western Henan Province will allow us to further expand production of chilled and frozen pork in order to meet demand for high-quality pork in China. At the same time, our prepared meat facility will allow us to expand our product lines to target mid- and high-end consumers by appealing to their evolving tastes and nutrition requirements with a variety of prepared pork products," said Mr. Xianfu Zhu, CEO of Zhongpin. "We are confident that we will complete these facilities on schedule, which will further our efforts to build a leading brand of pork products in China."