Sino Agro Food Inc (fka SIAF)

[viking86]

I think Kav has a point. Acc. to the S1-A, SIAF sells young cattle to the farmers and buys back the mature cattle about 9 months later. The farmers get charged the price of the young cattle and the cost of feedstock and services provided by Siaf against the price Siaf pays for the mature cattle. At least that's my take.

Our strategy is to increase the number of co-operative growers and obtain more internal cattle houses in an attempt to double the volume of production of mature cattle during 2013, which in turn would increase the demand for the production of fertilizer and bulk stock feed to grow in tandem. The cost of rearing cattle is expected to be lower as a result of concentrating efforts on manufacturing and/or selling livestock feed. The regional farmers are contracted to grow crops and pasture for us using our land that has been provided lease-free by the local Government or by using their own land, our equipment operated by our workers for planting and harvesting, and our super vision and associated services as well as seed and organic fertilizer. These items are provided to them on credit, which are then charged against their account when the Company purchases the crops and pasture grass from them in return. Regional farmers also raise cattle for us using our bulk livestock feed under the same credit terms and conditions described above. That is, when the Company purchases the mature cattle from them, their accounts is charged for the feed against the amount paid.

The cattle we grow are primarily Simmental (a common breed introduced to China in the early 20thcentury), Charolais, and some Angus cattle. In general, 12 to 15-monthold cattle are sold to local farmers by our cattle agents, and we commit to repurchasing the cattle between 21 months to 24 months old.