Deyu Agriculture Corp, a vertically integrated producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains, has signed control agreements with the majority equity owners of Deyufarm Innovation Food (Beijing) Co (Deyufarm), a manufacturer of instant organic multi-grain packaged food in China.

According to the agreements, Deyu will receive 64.3% of the net profits of Deyufarm in exchange for assisting HaoLiangXin in the sales, marketing and distribution of its products into Deyu's nationwide distribution network and customer base.

Deyufarm, through its wholly owned subsidiary, Sichuan Haoliangxin Instant Food Co (HaoLiangXin) is engaged in the research & development and production of instant grain foods and has production facilities in Chengdu, Sichuan Province.

HaoLiangXin boasts significant proprietary technical expertise in manufacturing grain based instant noodles.

Deyu will provide grains through its network of farmers and its company controlled farm acreage for production of instant grain food products.

Deyu and HaoLiangXin will produce and distribute a range of branded instant organic grain products including instant grain noodles, ready-to-eat grain rice, instant grain drinks and instant grain soups.

HaoLiangXin is in the process of a major capital expansion plan that will increase its production capacity to over 300 million units per year by mid 2011, including adding production facilities in Beijing.

Deyu Agriculture chairman and CEO Jianming Hao said that as Chinese consumers are becoming increasingly health and nutrition conscious, the demand for high quality organic grain food is growing rapid, this furthers the company's strategy of adding higher value-added, higher margin, branded processed foods to our product portfolio and enhances its grain products processing operations.

"Additionally, it leverages our existing brand awareness and our strong nationwide distribution network and customer base of over 8,500 retail stores, including the Shanxi Greenwood Supermarket Group, Auchan, Walmart and Carrefour," Hao added.

Deyu Agriculture Corp operates in the Shanxi Province of China. The company has access to around 100,000 acres of farmland in the Shanxi Province for breeding, cultivating, processing, warehousing, and distributing grain and corn products. It boasts an extensive retail distribution network of more than 8,500 retail stores across China.