Penn Biotech said that the order provided further evidence that its strategy of entering the Chinese seed potato market will have a substantial impact on the company's revenues as it develops its business in the world's largest single market for potatoes.
Combined with previously announced acquisitions that the Company has negotiated, the company says that it is on target to achieve revenues of $75 million (€62.3m) in 2005.
The agricultural biotechnology division of Penn Biotechemploys a patented technology to grow seed potatoes in Canada and China. The company entered the China market when it made its first export of seeds to the country back in April 2000. Since then it has built up its business in the county and has now established a subsidiary there.
Potatoes are currently the fourth-largest food crop in the world, with China now leading the way as the world's number one potato producer. Penn's technology is said to improve the quality and significantly reduces the time period for potatoes to reach consumer markets, crucial to producers in China who are constantly looking at ways of how to improve production yields in an effort to meet ever-growing demands for food.
China's shift towards potato production has been growing steadily in recent years, averaging growth of 6.7 per cent per annum, supported by an increase in growing area of 3 per cent. The country, traditionally known for its rice production, now commands approximately 13 per cent of total world potato production and approximately 85 per cent of sweet potato production.
However, despite being the largest single producer, the production methods used by China's potato farmers are still considered to be rudimentary in international terms, with many farmers still doing a great deal of the work by hand.
Equally seed production is said to be very disorganized in the country, with no one authority to oversee distribution and maintain quality standards. Production of virus-free potato seeds has been seen as a priority for the farmers, who now wish to increase their productivity to meet growing demand. In view of the current situation, moves by companies such as Penn Biotech will almost certainly be well received and, in turn, look set to increase production levels further.