June 17, 2002 - Hong Kong - An address on Sustainable Agriculture was made by Mr Alan Yu, Vice President and Chief Operating Officer of CK Life Sciences Int'l., (Holdings) Inc. ("CK Life Sciences" or "the Group") at an Environment Committee Meeting of the American Chamber of Commerce in Hong Kong last week. In his address, Mr Yu discussed the environmental problems caused by chemical fertilizer leaching, a serious issue which has aroused worldwide concerns, and has put sustainable agriculture on the priority agenda in many countries. Mr Yu cited Australia as an example of how NutriSmart, the Group's eco-fertilizer, could be a viable solution to the agricultural pollution problem and play an effective role in sustainable farming.

United Nations Population Fund estimated that 5 to 7 million hectares of agricultural land are lost to accelerating land degradation and rapid urbanization each year. A sixth of the world's land area (nearly 2 billion hectares) is now degraded, and chemical fertilizers are considered to be a major source of pollution to the environment. As a result of this, many famous major rivers such as St Lawrence River in Canada, Mississippi River in the US, and the Great Barrier Reef and the Murray Darling River in Australia are all contaminated to a certain extent.

For traditional chemical fertilizers, the amount of nutrients such as nitrogen (N), phosphorous (P) and potassium (K) are pre-fixed, and the release of these nutrients is not in line with the needs of the plants. As plants cannot take up all the nutrients applied, excessive NPK exacerbates acidification of the soil, jeopardizing the ecological balance and making the soil infertile. In addition, they leach into nearby rivers contaminating the water bodies, affecting bio-diversity in water.

According to statistics of the US Census Bureau, it is estimated that the world's population will be over 6.2 billion in July, 2002. By 2025, the figure is projected to rise to 7.8 billion, and world food production will have to be doubled in order to support the huge population. With farmlands worldwide facing problems related to over-cropping and erosion caused by chemical fertilizers, producing adequate food supply to satisfy worldwide demand has become an issue. Sustainable farming practice has therefore become a priority agenda item, and there is a great need to come out with substitutes for chemical fertilizers which can protect the environment and increase crop yield at the same time.

"Citing Australia as an example, the Natural Heritage Trust established by the Australian Federal Government has spent four years and invested around AUD$30 million in conducting the 'National Land and Water Resources Audit'. The Audit pointed out that agricultural development has disturbed the ecological processes of natural landscapes in Australia, and the problem of soil acidification caused by nutrient leaching is worsening. The leached nutrients have also contaminated national treasures like the Great Barrier Reef, and main river systems such as the Murray Darling River. The Australian Government and environmental groups are actively promoting the concept of sustainable farming and a search for alternatives to chemical fertilizers has begun," stated Mr Yu.

Many environmental groups and farming communities in Australia are actively promoting sustainable agriculture practice. Numerous organizations including the Australian Conservation Foundation (ACF), World Wide Fund (WWF), Environment Victoria, Nature Conservation Council of NSW (NCC), Landcare, the Victorian Farmers' Federation and the National Farmers' Federation have already developed programmes to promote sustainable farming and have introduced practical measures to facilitate the implementation of the concept.

Mr Yu commented, "The environmental and yield benefits brought forward by NutriSmart, the eco-fertilizer of CK Life Sciences, fully complement the requirements of sustainable farming. It is a right solution offered at the right time to address the need of the agricultural industry in Australia."

NutriSmart is an environmentally friendly fertilizer which contains no soluble NPK. NutriSmart manufactures NPK in the soil, therefore can provide a "smart" phased interaction with the root system to give the appropriate quantity of nutrients to the crops when nutrients are needed; and does not cause any nutrient leaching which often pollutes nearby rivers and water bodies. NutriSmart not only matches the yields made possible by traditional chemical fertlilizers, it also possesses the following benefits: (i) environmentally friendly; (ii) beneficial for the protection and improvement of soil condition; and (iii) improve the quality of the produce.

In collaboration with a number of partners including the government-subsidized South Australia Research and Development Institute (SARDI), field trials of NutriSmart were conducted in areas such as South Australia and Queensland. These tests have demonstrated that NutriSmart is not only environmentally friendly, but also increases agricultural yields.

In April, Professor S. F. Pang, Vice President and Chief Technology Officer of CK Life Sciences, spoke at a soil conference in Sydney organized by NCC where experts from green groups and academic institutes from all over Australia gathered to exchange views on issues regarding soil quality and salinity. Keen interest towards NutriSmart was registered and a number of enquiries towards the product were received subsequent to the event. Many participants of the Conference have recognized NutriSmart's potential in environmental conservation. CK Life Sciences was named by ACF in the Ethical Investor magazine as one of the three commercial corporations which are actually doing sustainable agriculture in Australia. CK Life Sciences will continue to actively promote the cause. The company has also appointed Elders, a leading agricultural service and product provider, as the distribution agent in Australia for NutriSmart to promote and distribute NutriSmart to growers and relevant organizations in the industry.

Mr Yu added, "The global fertilizer market size is estimated to be US$40 billion, of which Australia commands a market size of about US$1 billion. Australia has strategic significance to CK Life Sciences. The country is blessed with rich natural resources, and the citizens are very conscious of protecting the environment. They understand fully that sustainable agriculture is crucial for our future and therefore their requirements on the quality and features of agricultural products are very stringent. NutriSmart should have an important role in sustainable farming in Australia; the product has the potential to revolutionize the whole agricultural industry and be a dominant player in the worldwide fertilizer market."

CK Life Sciences is engaged in the business of research and development, commercialization, marketing and sale of biotechnology products. The Group's business areas cover two dimensions - human health and environmental sustainability. Products developed by CK Life Sciences are categorised into five areas - eco-agriculture, bioremediation, pharmaceuticals, nutraceuticals, and dermatologicals.