Chai-Na-Ta Corp. Reports 2003 Second Quarter Results.

Business Editors/Health/Medical Writers

LANGLEY, British Columbia--(BUSINESS WIRE)--Aug. 14, 2003

Chai-Na-Ta Corp. (TSX: "CC"; OTCBB: "CCCFF"), the world's largest supplier of North American ginseng, today announced that net earnings rose to $0.4 million ($0.03 per basic share) in the quarter ended June 30, 2003 from a loss of $0.2 million ($0.01 per basic share) in the same period last year.

The Company took a $1 million write-down of crop costs in the 2003 second quarter due to an unusually late frost at one of its British Columbia farms, which severely damaged 57 acres of ginseng plants, or just less than 20% of the anticipated 2004 harvest. The surviving plants represented too small a return on investment to warrant ongoing cultivation.

"Our recent experience shows that we were correct in deciding to balance our farming operations between B.C. and Ontario, which reduces weather risks to our crops," said William Zen, Chairman and Chief Executive Officer. "Moreover, our success in reducing costs - and in selling our product into an improving market - demonstrate that our strategies are positioning the Company for strong growth. Chai-Na-Ta should be significantly more profitable on an operating earnings basis in 2003 than it was in 2002 - and we expect net earnings to rise substantially year over year."

Revenue increased 56% to $4.9 million in the second quarter of 2003 from $3.1 million in the same quarter last year.

The Company's gross profit margin rose to 35% in the 2003 second quarter from 4% in the same period last year, when the crop was damaged by rust, an aesthetic condition that affects root prices.

Selling, general and administrative expenses improved to $0.4 million in the 2003 second quarter, or 9% of revenue, from $0.5 million, or 15% of revenue, in the quarter ended June 30, 2002.

"We have sold nearly all of the 2002 fall harvest. Prices have firmed within the $17 per pound range. We expect that they will move higher by year-end and continue to rise," commented Mr. Zen. "While industry-wide frost damage in recent years will limit the amount of root available for sale in 2004, we anticipate a compensatory improvement in prices."

During the 2003 first half, revenue increased 27% to $11.3 million from $8.9 million in the same period last year. The gross profit margin was 32% in the first half of 2003 compared to 7% in the six months ended June 30, 2002. Net earnings were $1.4 million ($0.10 per basic share) in the six months ended June 30, 2003 compared to a net loss of $0.1 million ($0.01 per basic share) in the prior year period.

Chai-Na-Ta's cash position at June 30, 2003 was $3.8 million compared to $2.8 million at December 31, 2002. The Company's working capital position at the end of the 2003 second quarter was a surplus of $12.2 million, compared to a surplus of $12.1 million at December 31, 2002.

Chai-Na-Ta Corp., based in Langley, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng as bulk root, and supplies processed material for the manufacture of value-added ginseng-based products.

This news release contains forward-looking statements that reflect the Company's expectations regarding future events. These forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected. Such risks and uncertainties include, but are not limited to, the success of the Company's ongoing research programs, general business conditions, and other risks as outlined in the Company's periodic filings, Annual Report, and Form 20-F.