LETTER FROM THE PRESIDENT OF ROCKY MOUNTAIN GINSENG, INC.
Many shareholders have written to me to express their disappointment in not
being more open about the status of our corporate restructuring. I can
fully appreciate their feelings and sincerely wish I could brief you now of
our plans. However, that cannot be as our deliberations are still ongoing
and we still have a way to go before a decision is finalized.
Let me share with you some highlights of recent developments in China.
1. FUZHOU
As you know, our company has the exclusive right to produce ginseng and DNA
products in China. In 1995, 69 scientists around the world received a Noble
price in medicine for their work on DNA and its role in providing nutrition
to body cells. The Chinese consumer is very aware of this as a result of
considerable exposure in the media.
Our company commissioned an experienced food scientist earlier this year to
develop a product containing ginseng powder and DNA. This formula has been
tested and approved by the Fujian Provincial Hygiene Bureau who has
forwarded a request to their federal counterpart in Beijing to give
us national approval.
We are experiencing very strong consumer acceptance for our ginseng and DNA
tablets which are packed in "blister packs". Customers have requested we
package the product in security sealed bottles as well. We have designed a
new bottle and supporting promotional literature. This product will enter
the market this week.
As more development money becomes available we will complete our clinical
trials, etc., necessary before we can start producing Ginseng & DNA capsules
(with more DNA than in our tablets) and Spirolina & DNA capsules and
tablets. We are currently negotiating a lease to open a corporate shop near
an extremely busy public square in Fuzhou. This location will be very
useful for product promotion.
2.QUANZHOU
By now you will have read our November 2nd news release pertaining to our
agreement with the Quanzhou School of Technology to use their drug import,
wholesale and retail permit. This has been a major breakthrough for our
company as new permits are virtually impossible to obtain now.
After China joins the WTO it will take 5 years before any western company
can obtain such a permit. The best part of this permit is the right to
import western drugs and healthy foods and to be able to
wholesale them in all parts of China. (Imported drugs however, would still
need federal approval.) We have started the process of seeking sources of
supply in the west. The problem now is the limitation of funds to set up a
major wholesaling operation.
Jiang Shao Shu, our Vice President of China operations, and I have spent
this past weekend in Quanzhou to oversee the layout/design of a company
owned retail/wholesale store in Quanzhou. We expect to open it later this
month.
Quanzhou continues to be our best market. We now service 60% of their drug
stores with our dried ginseng root. Because the company must supply 60-90
days credit to customers (which must be done in order to remain competitive)
it is difficult to expand quickly due to financial constraints. We monitor
our creditors very closely and are experiencing few problems in collecting
our receivables.
3. SHENZHEN
Finally, I have a very important development to report in Shenzhen. We were
very fortunate to be able to hire Mr. He Ze Chun to serve as General Manager
of our Shenzhen office. He brings to us 4 years experience as General
Manager in Sichuan province for our largest competitor and his experience is
already bearing fruit.
I'm looking forward to updating you on our restructuring decisions so we can
move forward together in developing this exciting market in future.
Sincerely,
Brian Hodge
President
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Thank you.
Received via email this a.m.
Regards,
John :-) |
