Shanghai Seres Group signed a strategic cooperation agreement with Xuzhou Supply and Marketing General Cooperative on Thursday to build an industrial chain connecting distribution and sale of agricultural products.

Under the agreement, the two parties will cooperate on smart factories, commercial logistics, wholesale market and points of sale by utilizing Seres Group's expertise in artificial intelligence and digitalized application system.

Seres Group will also set up a joint venture with Xuzhou Supply and Marketing General Cooperative to further digitalize and capitalize the latter's business. With Seres Group holding 51 percent stake in the joint venture, the registered capital has reached 130 million yuan ($19 million).

The cooperation will also cover over 50 supermarkets and 10 farm product markets. The annual sales revenue under this cooperation is expected to reach 23.5 billion yuan.

According to Zhong Kaitao, chairman and chief executive officer of Seres Group, it is their second cooperation with a local supply and marketing general cooperative, seven months after the first one reached in Maoming, Guangdong province. The company will focus on lower-tier cities in the future to help their agricultural products reach more markets.