DACHAN FOOD (ASIA) LIMITED

(incorporated in the Cayman Islands with limited liability)
(Stock Code: 3999)
DISCLOSEABLE TRANSACTION

The Directors are pleased to announce that on 25 January 2008, NAC entered into
the Co-operation Agreement with the PRC Party in relation to the Integrated
Production Line Project. Pursuant to the Co-operation Agreement, NAC will
establish feed and meat production facilities in Cangshan County, Shandong
Province, the PRC.
Pursuant to the Co-operation Agreement, NAC is required to establish the Project
Company to own and operate the aforesaid production facilities and the registered
capital of the Project Company shall be approximately RMB30,000,000
(equivalent to approximately HK$32,505,174). It is proposed that the total
investment of the Project Company be approximately RMB260,000,000
(equivalent to approximately HK$281,711,506), of which, fixed asset investment
shall be approximately RMB208,000,000 (equivalent to approximately
HK$225,369,205).
To the best of the Directors’ knowledge, information and belief having made all
reasonable enquiries, the PRC Party is a third party independent of the Group and
connected persons (as defined under the Listing Rules) of the Group.
The entering into of the Co-operation Agreement constitutes a discloseable
transaction of the Company under the Listing Rules. A circular containing, among
other matters, details of the transactions contemplated under the Co-operation
Agreement will be despatched to the shareholders of the Company within 21 days
after the date of this announcement.
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The Directors are pleased to announce that on 25 January 2008, NAC entered into the
Co-operation Agreement with the PRC Party in relation to the Integrated Production
Line Project. Pursuant to the Co-operation Agreement, NAC will establish feed and
meat production facilities in Cangshan County, Shandong Province, the PRC.
The Integrated Production Line Project contemplates the establishment by the Project
Company of one feed mill (with an annual production capacity of 230,000 tonnes),
one meat factory (with an annual production capacity of 60,000 tonnes and with
future expansion to 130,000 tonnes), and the offering of assistance to the farmers in
constructing standard chicken farms.
PRINCIPLE TERMS OF THE CO-OPERATION AGREEMENT

Date: 25 January 2008
Parties: 1. NAC; and
2. the PRC Party, which to the best of the Directors’
knowledge, information and belief having made all
reasonable enquiries, is a third party independent of
the Group and connected persons (as defined under
the Listing Rules) of the Group.
Responsibilities of the
PRC Party:
1. To be responsible for the confiscation of land (the
“Relevant Land”) necessary for plant(s) to house
the production facilities contemplated in the
Integrated Production Line Project. It is expected
that the confiscation shall be completed by no later
than 31 January 2008.
2. To procure the execution of the land use right
transfer agreement(s) by the relevant land
department and NAC in relation to the Relevant
Land and the issue of the land use right
certificate(s) related to the Relevant Land, with
land use right for not less than 50 years.
3. To provide the necessary assistance to NAC in the
construction and design of the Integrated
Production Line Project.
4. To provide support for the Integrated Production
Line Project and other preferential treatments, and
to offer guidance and coordination in
administrative issues to the Project Company.
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Responsibilities of
NAC:
1. To establish the Project Company to develop the
Integrated Production Line Project. The registered
capital of the Project Company shall be
approximately RMB30,000,000 (equivalent to
approximately HK$32,505,174). It is proposed that
the total investment of the Project Company be
approximately RMB260,000,000 (equivalent to
approximately HK$281,711,506), of which, fixed
asset investment shall be approximately
RMB208,000,000 (equivalent to approximately
HK$225,369,205), which is arrived at after taking
into account the cost of design, construction and
operation for the Integrated Production Line
Project and arm’s length negotiation with the PRC
Party on normal commercial terms. Total
investment of feed production plant shall be
approximately RMB60,000,000 (equivalent to
approximately HK$65,010,348), of which, capital
investment shall be approximately RMB30,000,000
(equivalent to approximately HK$32,505,174). The
fund of the construction of the meat production
plant shall be provided by a newly established
branch of the Group.
2. To be responsible for the construction and design of
the Integrated Production Line Project.
Size of land to be
occupied:
The Relevant Land shall have a total site area of
approximately 260 square acres (approximately 173,334
square meters).
Tentative time table: Construction works shall begin in January 2008 and is
expected to be completed in two years.
SOURCE OF FUNDING

Pursuant to the Co-operation Agreement, NAC is required to establish the Project
Company and the registered capital of the Project Company shall be approximately
RMB30,000,000 (equivalent to approximately HK$32,505,174). It is proposed that
the total investment of the Project Company be approximately RMB260,000,000
(equivalent to approximately HK$281,711,506), of which, fixed asset investment
shall be approximately RMB208,000,000 (equivalent to approximately
HK$225,369,205), which is arrived at after taking into account the cost of design,
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construction and operation for the Integrated Production Line Project and arm’s
length negotiation with the PRC Party on normal commercial terms. The Directors
confirm that the afore-mentioned total investment amount shall represent the total
capital commitment of the Group in the Project Company (and indirectly, the
Integrated Production Line Project) unless otherwise approved by the PRC regulatory
authorities in accordance with applicable laws and regulations of the PRC. The
Directors currently intends that such investment amount shall be funded by part of
the proceeds raised from the New Issue (as defined in the Prospectus) earmarked for
the purposes of expansion of the production capacity as more particularly disclosed
in the section headed “Future plans and use of proceeds” of the Prospectus and where
appropriate, also financed by the internal resources of the Group. The Directors
confirm that there has not been any change in the proposed use of such proceeds
raised from the New Issue.
REASONS FOR ENTERING INTO THE CO-OPERATION AGREEMENT

The Group is principally engaged in the manufacturing of feeds, chicken meat
production and supply of processed foods.
As disclosed in the Prospectus, the Group aims at expanding its feed chicken meat
and processed food operations concurrently to satisfy the increasing market demands
for the Group’s products. To replicate the vertically integrated business model of the
Group, it is expected that the Group will, among other things, build a total of 3
processed foods production facilities in the PRC by the end of 2010. The Directors
are of the view that the Integrated Production Plan Project is a strategic step in the
Group’s implementing its business plan as, capitalizing on the background and
support of the PRC Party, the Integrated Production Plan Project would help to
further expand the Group’s chicken meat and processed food processing and
production operations.
The Directors are of the view that the procurement of Relevant Land by the PRC
Party, the People’s Government of Cangshan County, pursuant to the Co-operation
Agreement is a beneficial treatment for attracting the Group to invest in the relevant
county for the further development of the county. In view of such beneficial treatment
and given the Group’s entire interest in the Project Company, the Directors (including
the independent non-executive Directors) consider that the Co-operation Agreement
was entered into after arm’s length negotiation and on normal commercial terms and
the terms of the Co-operation Agreement are fair and reasonable so far as the
shareholders of the Company are concerned and are in the interest of the Company
and its shareholders as a whole.
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GENERAL
The entering into of the Co-operation Agreement constitutes a discloseable
transaction of the Company under the Listing Rules. A circular containing, among
other matters, details of the transactions contemplated under the Co-operation
Agreement will be despatched to the shareholders of the Company within 21 days
after the date of this announcement.
As at the date of this announcement, the executive Directors are Mr. Han Jia-Hwan,
Mr. Chang Tiee-Shen and Mr. Chen Fu-Shih, the non-executive Directors are Mr. Han
Chia-Yau, Mr. Harn Jia-Chen, Mr. Nicholas W. Rosa and Mr. Chao Tien-Shin, the
independent non-executive Directors are Mr. Liu Fuchun and Dr. Chen Chih.
DEFINITIONS

In this announcement, the following expressions shall, unless the context requires
otherwise, have the following meanings:
“Board” the board of Directors
“Company” DaChan Food (Asia) Limited, a company incorporated
in the Cayman Islands with limited liability whose
shares are listed on the Stock Exchange
“Co-operation
Agreement”
the co-operation agreement dated 25 January 2008
entered into between NAC and the PRC Party in relation
to the Integrated Production Line Project
“Directors” the directors of the Company
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the
PRC
“NAC” Great Wall Northeast Asia Corporation, a company
incorporated in the Cayman Islands with limited
liability on 3 December 1996 and an wholly-owned
subsidiary of the Company
“Integrated
Production Line
Project”
the project to establish integrated production facilities
encompassing feed production and food processing in
Cangshan County, Shandong Province, the PRC,
pursuant to the Co-operation Agreement
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“Listing Rules” the Rules Governing the Listing of Securities on the
Stock Exchange
“PRC” the People’s Republic of China, which for the purpose
of this announcement, shall exclude Hong Kong, the
Macau Special Administrative Region of the PRC and
Taiwan
“Project Company” a wholly foreign owned enterprise to be established by
NAC in the PRC to develop the Integrated Production
Line Project
“PRC Party” the People’s Government of Cangshan County,
Shandong Province ($[OA), which to
the best of the Directors’ knowledge, information and
belief having made all reasonable enquiries, is a third
party independent of the Group and connected persons
(as defined under the Listing Rules) of the Group
“Prospectus” the prospectus dated 20 September 2007 issued by the
Company in relation to the public offer of shares of the
Company and listing of the shares of the Company on
the Stock Exchange
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“RMB” Renminbi, the lawful currency of the PRC
By order of the Board
Han Jia-Hwan
Chairman
Hong Kong, 25 January 2008
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