GLG Life Tech Corp., a vertically integrated leader in the agricultural and commercial development of high quality stevia, announces the signing of a Letter of Intent with COFCO Nutrition and Health Research Institute Co Ltd., a 100 percent owned subsidiary of China National Cereals, Oils, and Foodstuff Corporation, for a strategic collaboration for the Chinese market.
The LOI focuses on the two party's cooperation on the research and development of food and beverage products and on the development, marketing and sale of stevia extracts and formulated products to promote the development of the stevia industry, nutrition, and the healthy food industry in China. Under the LOI terms, COFCO NHRI shall preferentially use the materials, products, and technologies provided by GLG. The parties shall work together to develop the strategies and promotions and industrialization of stevia in the process of developing health food and functional food. The Company expects that additional agreements will result of this framework agreement and the LOI specifically provides for future agreements for major developments that are to occur.
China has one of the largest populations of diabetics globally with approximately 90 million diagnosed, and approximately 200 million people are classified as obese. Both parties are focused on the health and social well-being of the Chinese people in the development of products sweetened with stevia for zero or low calories. In addition, the parties recognize the high agricultural value of stevia to China's farmers, and the continued requirement for China to import sweeteners.
The LOI specifies that COFCO NHRI is responsible for introducing the related co-developed products to COFCO Innovation of Food (Beijing) Co., Ltd and the sales channel of COFCO. NHRI will also be responsible to bring the stevia products of GLG to China Mengniu Dairy Company Limited and to assist in the expansion of the distribution channel of GLG's products.
The LOI also states that investment may occur under the right circumstances, including COFCO NHRI investment in GLG and other forms of investment.
Dr. Luke Zhang, Chairman and CEO of GLG said, "We are very fortunate to have entered into this strategic cooperation with COFCO which is on the Fortune 500 list of global companies and is the largest food company in China. We share a common vision for the need for healthier food and beverages for the China market and stevia is the only scalable all natural zero calorie sweetener that can meet the scale requirements for the China market. We have had a lot of strategic discussions with COFCO Executive over the past several months and we have a good roadmap to begin execution of their ambitious vision to bring healthier food and beverages to the China market. We are truly excited to be the preferred stevia partner to COFCO and to be recognized as the leading vertically integrated player in the stevia industry."
COFCO HNRI President Xiao Ming Hao stated, "GLG is a company in the global stevia industry which has developed its own intellectual property and vertically integrated supply chain covering from seed to shelf. This time, we will do collaborations using each party's strength; create new mechanisms for our mutual benefit. We plan to increase the health value of stevia from developments of technology, basic application, products and quality safety and to provide more health options for the Chinese diabetic and obese population."