Advanced Biofuels

Viaspace Inc. to Commercially Farm Hybrid Grass in China for Animal Feed and Cellulosic Ethanol Production

Date Posted: November 5, 2008

Pasadena, CA—VIASPACE Inc. (OTC Bulletin Board: VSPC) announced November 3 the Company is focused on commercial farming of its new fast-growing hybrid grass to initially capture a significant share of China's $40 billion market for animal feed.

The high-yield grass is ideal for feeding livestock as well as producing cellulosic biofuels, which is a growing market.

The recent significant rising of Chinese consumption of meat and dairy products has created a tremendous growth in demand for livestock feed.

VIASPACE is aggressively pursuing this near-term revenue opportunity and expects the high-yield grass business to generate $20 million in revenue in the next two years, while it develops the biofuels business in the near term.

Dr. Carl Kukkonen, CEO of VIASPACE, commented: "Our recent acquisition of Inter-Pacific, a profitable $5 million revenue-generating company with a worldwide license to cultivate a high-yield grass for agriculture and sustainable energy, has opened the door to tremendous growth and cash flow for VIASPACE.

"Our first objective is to gain a significant market share of China's rapidly growing animal feed industry and we are also pursuing opportunities with partners worldwide to distribute this innovative new feedstock and biofuels product."

The Company has begun commercial farming of the ultra-fast-growing grass in China's Quangdong Province, a major manufacturing and agricultural center in southern China.

The China Giant King Grass is a natural, non-genetically modified hybrid with many advantages over other grasses and crops used for feed.

This perennial species can grow up to twelve feet high in sixty days, produce four crops per year in tropical and subtropical climates, and yield seven times more mass than corn.

In addition to biofuels usage, the crops can be used to feed dairy cows, pigs, chickens, fish and other livestock in its initial processing.

Dr. Kukkonen continued: "While the high-yield grass will soon be used to produce biofuels including sustainable cellulosic ethanol, we have chosen to also focus on the immediate opportunity to grow and sell this product in China's livestock feed market which has a well established customer base, excellent profit margins, and consistent annual growth rate exceeding 15%."

China's animal feed industry is valued at $40 billion and as population income rises it creates greater demand for meat products, reports Feed International, "Growth Areas in Global Feed Production," January 2008.

Also, according to China's National Bureau of Statistics each person now consumes 5% more meat and 10% more milk annually than five years ago. China Daily reports the increasing consumption has created a corresponding spike in demand for feed to produce a growing population of pigs, cows and other livestock.

Faced with increasing pressure on domestic supply, China imported approximately $4 billion in soybeans for food and feed in 2007 just released by the American Soybean Association in September 2008.

As announced last week, VIASPACE has acquired Inter-Pacific Arts Corp., a company with ongoing profitable operations generating unaudited 2007 revenues of approximately $5 million, net income of $1.2 million, and $3 million in cash and equivalents.

VIASPACE has the immediate ability to fund the rapid expansion of the high-yield grass business with cash flow from Inter-Pacific's well established and profitable commercial products division.

For more information, call 800-517-8050.

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