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Governor McDonnell Announces Soybean Export, Business Agreements between Perdue Agribusiness and China's Dandong Port Group

Press Release

Location: Richmond, VA

Governor Bob McDonnell announced today that Perdue Agribusiness, Incorporated, which owns and operates a major deep-water export terminal for grains and oilseeds in Chesapeake, has reached agreements to begin exporting soybeans to China's Dandong Port Group Co. and its affiliate Dandong Pasite Grain and Oilseed Co. Ltd. The companies also signed a memorandum of understanding (MOU) to commemorate their new business relationship and to explore future business opportunities in addition to soybean exports. The contracts and MOU were signed this week in Richmond during meetings hosted by Governor McDonnell. The relationship between Dandong and Perdue Agribusiness was facilitated as a result of the Governor's trade and economic development mission to Asia earlier this year.

Speaking to the new export business, Governor McDonnell said, "Today's announcement is outstanding news for Virginia's soybean producers and Perdue Agribusiness' renowned export facility in Chesapeake. Growing agricultural exports from Virginia is a top priority in my economic development and jobs creation agenda, so I'm very pleased that my administration's work with Dandong and Perdue before, during, and after my Asian trade mission helped the principals reach these agreements. Dandong is gaining a great new business partner in Perdue, and I'm hopeful this is the just the beginning of a relationship that will benefit our soybean producers, Dandong, and Perdue for years to come."

The MOU and contracts for more than of 100,000 metric tons of soybeans signed this week between Perdue Agribusiness and Dandong Port Group have the potential to catapult China past Canada as Virginia's top agricultural export partner. In 2010, China was the second largest export market for Virginia's agricultural products, with shipments valued at almost $195 million. Overall agricultural exports in 2010 from Virginia reached $2.24 billion, the second highest total in history.

China's demand for soybeans continues to increase, driven by increased use in animal feed production and higher vegetable oil consumption levels amongst consumers. This increased consumption is the result of continuing economic growth in China and rising levels of disposable income. The United States, Brazil and Argentina are the largest suppliers of soybeans to China. The value of soybean sales from the United States to China topped $4.7 billion in the first half of 2011, with the majority of these exports originating from ports in the Gulf Coast or West Coast.

"We are excited about the opportunities presented by this new partnership with Dandong and about the potential to help meet the increasing demand from China's growing economy," said Jim Perdue, Chairman of Perdue. "We are grateful to Governor McDonnell and his team, and to the Commonwealth of Virginia, for introducing us and facilitating this transaction."

"We are very pleased to begin our business relationship with Perdue Agribusiness," said Mr. Wenliang Wang, the Chairman of the Dandong Port Group and Dandong Pasite Grain and Oilseed Co. "Perdue's reputation as being a leading global grain and oilseed processor and exporter will undoubtedly serve Dandong well as we continue to grow our soybean and grain purchases. We want to particularly thank Governor McDonnell for his leadership in helping to foster our relationship with Perdue. Governor McDonnell's commitment to growing agricultural exports from Virginia was quite evident in our meetings with him in Beijing and Virginia. We hope our investments in Virginia agriculture are the first of many going forward."

Perdue Agribusiness is a Salisbury, Maryland-based business that ranks among the top U.S. grain companies and is a direct exporter of U.S. agricultural commodities through its deep water port. Perdue Agribusiness merchandises grain and oilseeds, processes soybeans, operates protein conversion plants, and refines edible oils. With an entrepreneurial spirit, Perdue Agribusiness ventures touch such diverse opportunities as bio-energy, organic fertilizers, and specialty livestock feeds. It is a subsidiary of Perdue, one of the nation's leading poultry companies and provider of high quality food, agricultural products, and services to customers in more than 100 countries. With annual sales of $4.6 billion in fiscal year 2010, Perdue ranked as the third largest poultry company in the United States.

The Dandong Port Group is a Hong Kong-based holding company that operates major port and infrastructure assets throughout Asia, including the Port of Dandong located in China's northeastern Liaoning Province. The port, which employees more than 2.300 individuals, provides direct shipping links to more than 70 ports in more than 30 countries around the world and offers general and bulk cargo, container, and passenger transport services. Dandong Pasite Grain and Oilseed Co. Ltd. is the largest purchaser and processor of soybeans and grains in China. It will reach an annual capacity of two million metric tons of soybeans by 2012. Dandong Port is the only fully automated grain facility in China that directly discharges grains from vessels to 1.2 million-ton capacity grain silos. The Port of Dandong and Dandong Pasite serve as vital links for grain, bulk commodities, and container shipments for China as well as northeast Asia.

This is the second agreement that the Dandong Port Group has reached with a company either headquartered or having significant operations in Virginia. In June, Governor McDonnell announced that Virginia-based Smithfield Foods, Incorporated and the Dandong Port Group had signed an MOU to explore commercial opportunities in the rapidly growing market of northern China. The relationship was formalized by the signed MOU achieved during the Governor's trade and marketing mission to Asia. The Governor also announced in August a wine export deal between Barboursville Vineyards and China's Tianjin Tewoo Group. The deal is believed to be the first commercial shipment of Virginia wines to China.

A significant portion of Governor McDonnell's trade and economic development mission to Asia was targeted at growing Virginia's agricultural and forestry exports to China. Governor McDonnell and Agriculture and Forestry Secretary Todd Haymore met with almost two dozen current or potential new customers of Virginia's agricultural exports during the 11-day trade and marketing mission.

Agriculture and forestry are Virginia's largest industries, with a combined economic impact of $79 billion annually: $55 billion from agriculture and $24 billion from forestry. The industries also provide approximately 500,000 jobs in the Commonwealth according to the Weldon Cooper Center for Public Service at the University of Virginia.

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