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Expansion of international operations through modernization of the dairy industry and other infrastructure projects in pakistan

Feb 07 - 13, 2000

China Continental, Inc. (OTC Bulletin Board: CHCL) announced 31, on January that it is in discussions with an international consortium to lead the development of a modern dairy operation, assist in providing modern techniques to the dairy industry and expand transportation infrastructure projects in Pakistan. Management believes that the entire project to be approximately US $ 1 billion. the dairy portion of the project is expected to result in the propagation of superior livestock and the production of high quality dairy products of international standards for both the domestic and overseas markets.

" There is a large and untapped potential in the dairy industry and transportation infrastructure projects in Pakistan, resulting in the Company's largest operation outside of China," said Mr. Harry H.H.Ho, Chairman of China Continental Inc. "Over the years, we have acquired the technical expertise in dairy farming in China and are confident that we can successfully replicate this in Pakistan." He added, "We have appointed Stock Links Investment Management Limited of Pakistan as our Financial Advisor to assist us in the implementation of the farming and infrastructure projects".

China Continental believes the scope of the project of setting up a fully integrated venture will include:

JEstablishing a modern dairy farm with a large capacity to house livestock

A strong bio-engineering team to carry out genetic research, breeding and herd management of superior livestock

Development of farming systems through agro-engineering and the genetic propagation of superior livestock and its ancillary products to assist other farms

Introducing the most advanced technologies in dairy processing, packaging, storage and distribution facilities by acting as consultants in setting up dairy processing plants to convert the raw products into higher-value-added products including high quality milk powder, milk, cheese and cream

Modern facilities and technologies that will enable the processors to handle large volumes of dairy products in modern, highly automated factories

With the local government, constructing dairy facilities in the international airport and harbour to ensure the proper storage and timely distribution of the dairy products

The infrastructure projects may also include the construction of toll roads and domestic airports, which will link cities, major towns, international airports and harbours within Pakistan.

Pakistan is one of the largest producers of milk in the world. Its dairy animal population is greater than that of North America and Canada. However, it still imports a substantial quantity of dairy products, due to the lack of processing facilities and technological expertise, which has resulted in the low yield and low quality of milk production. Its fragmented distribution channels, as well as the existing poor infrastructure in Pakistan, have also resulted in the under-development of this industry.

Pakistan has a large population of 138 million and it has a significant demand for dairy products. Today, the total demand of dairy products in Pakistan is estimated to be 3.5 million tons per year and the total market value for these products is estimated to be worth approximately US $ 7 billion. The demand for dairy products is currently growing at double digits rate and it is projected to grow at the same rate for the next 5 years.

About China Continental Inc.

China Continental Inc., traded on the Nasdaq market since 1995, is a holding company with over 10 years of experience in developing turnkey businesses. Core activities include supplying plastic manufacturing technology on a turnkey basis, high technology manufacturing techniques in primary industries and in developing and providing technologies in agricultural genetics and farming.

To date, China Continental Inc., has completed over 70 turnkey projects, varying in various sizes for different industrial processing sectors in China. The manufacturing arm of China Continental Inc., Asia Continental Limited, is engaged in applying state-of-the-art technology to manufacturing and distribution of chemical fiber related products and steel drums in China. In October 1999, Asia Continental Limited announced its intention to list on the Stock Exchange of Singapore. The Company's agricultural genetics and farming activities are centralized in the Inner Mongolia Province, China, covering an area of 450 square kilometers to commercialize its genetic techniques in breeding as well as propagating superior livestock and products in its own Research and Development Institute.