China Health Resource, Inc. (OTCBB: CHRI), announced today that the company has signed a 3 year exclusive agreement with a leading producer of Gastrodia in Pingwu, Sichuan.  This exclusive contract term is from April 1, 2012 to March 31, 2015, and extends the very successful product line for an additional 3 years from the prior agreement which will end March 31, 2012.  The quality of Gastrodia under this agreement is expected to comply to the latest formal TCM pharmaceutical standard and will give CHRI continued leverage in the Traditional Chinese Medicine (TCM) marketplace in China, as the main controlling distributor and supplier of pharmaceutical grade Gastrodia (also known as Tianma).

Widely recognized for producing high-quality Angelica, CHRI is expanding its TCM offerings with a highly regarded and marketable TCM herb, commonly known as Tianma in China. Pure Gastrodia in Pingwu County of the Sichuan Province contains a high content of active ingredients, with low heavy metal content. Free of pollution and boasting high quality, the demand in the market for pure Gastrodia surpasses the supply in Pingwu County.

“This exclusive agreement adds a stable high quality source of supply of our new flagship product, Gastrodia. Gastrodia demand is large and supply of pure Gastrodia of consistent quality is hard to find.  Having established our leading position in pharmaceutical Dahurian Angelica Root (DAR), allows us to attract high quality supply of key herbs which used with our standards can command higher prices for CHRI as well as our suppliers.” stated Jiayin Wang, Chairman and CEO of CHRI.

The company already started its General Agricultural Process (GAP) standard implementation for Gastrodia.  With standards in place, the quality can be properly managed and controlled.  This is considered by many experts as an essential step in the modernization of Traditional Chinese Medicine (TCM) products.

“CHRI is committed to establishing and promoting standards of raw herbs and TCM products. GAP DAR is now well accepted as the standard for pharmaceutical grade DAR in China and providing stable revenues and margins to CHRI. Gastrodia commands a larger market with high margins.  Gastrodia in 2011 has grown its sales in double-digits.  We expect the Gastrodia product line to continue to add significant revenue and earnings for many years.” added Jiayin Wang.

Gastrodia has large demand in China and Asia and further potential with the demands created from new alternative health products worldwide, general growing aging population and the imminent need to find alternative health solution with less side effects. Gastrodia currently retails for about 250~1,000 Yuan/kg (US$38~150/kg). It is considered one of China’s highest priced TCM drugs available in the market.

About CHRI

China Health Resource, Inc. engages in the development, manufacturing, processing, marketing and sale of raw and pharmaceutical TCM products including Dahurian Angelica Root (DAR) and Rhizoma Gastrodiae and is only the provider of GAP quality DAR in the People’s Republic of China under the registered Trademark Chuan Baizhi™. DAR, which is also known as “Bai Zhi” in Mandarin Chinese, is an herb that is employed as an ingredient in medicine, cosmetics and food, as well as used in TCM for the treatment of pain, swelling and pustule. The Company’s DAR-related products include the Bailing Capsule, Yisheng Capsule, Kimchee-Mate and Fragrant Bag, all of which are sold through regional distributors. The Company was founded in 2001 and is based in Suining, Sichuan Province.

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