Mr. Wilson Yao reports
CHINAHEALTH LABS & DIAGNOSTICS LTD. ANNOUNCES NEW CUSTOMER FOR POCTDIAGNOSTICS FIELD LABS
China Health Labs & Diagnostics Ltd.has been listed as a supplier to China's National Emergency Rescue Team(NERT) with an initial order of 13 Type A point-of-caretechnology (POCT) diagnostic field labs. The initial order is expectedto generate revenue of over 13 million renminbi (approximately$2-million),and is expected to be delivered mostly in the first quarter of 2011.
The NERT was established in 2010 by the central government of China as afirst responder to natural disasters such as earthquakes and floods.The NERT commenced operations with 13 central level teams to bedeployed as needed in China and to international emergencies. Inaddition, the central government is expected to establish provinciallevel teams to cover China's 32 provinces, municipalities andautonomous regions. The NERT will be focused on emergency response, andwill work with the Chinese military to co-ordinate responses to majornatural disasters within China.
"We are very pleased to be named as a supplier to the NERT, our secondmajor customer for POCT products. Our POCT business had strong growthin 2010 based on increased orders from the Chinese military, ourinitial customer," said Wilson Yao, chief executive officer of ChinaHealth. "We havedeveloped a unique patented solution with no direct competitors inChina based on our healthy relationship with the Chinese military. Thissale validates our confidence to invest the time and resources todevelop a full range of diagnostic products and services for themilitary and emergency services sector. With our proprietary productsand early success in delivering results in the field, we believe thatPOCT products will be one of our key drivers of revenue and profitgrowth as we build our business with the Chinese military and the NERT,and seek new customers."
China Health has established a strong working relationship withtheChinese military, which has lead to the co-operative development ofPOCTproducts for a wide range of applications. As disclosed in StockwatchDec. 8, 2010, China Health signed a three-yearresearch and development agreement with the Chinese Military MedicalEquipment Research Institute, based in Tianjin, and with the ThirdMilitary Medical University, based in Chongqing, to develop POCTsolutions and products for military and rescue diagnostic field labapplications.
In 2009, when China Health made its first sales of the POCT Type Adiagnostic field labs, sales to the military accounted for 10.8 percent ofrevenues or approximately $2.6-million of $23.8-million of total annualrevenues. As previously announced, the company expects to report thatPOCT sales to the Chinese military have more than doubled for the fullyear of 2010 compared with the same period in 2009.