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Email This Print This Location : Home -> Investor Relations -> Corporate Information -> Future Plans

Our business strategies and future plans for the growth and expansion of our business are described below:-

To enhance our production capabilities and expand our sales distribution network in the PRC

We believe that the PRC market, especially the northern, southwestern, central and eastern regions, still hold a large potential for our business to grow. Hence, we intend to expand our sales distribution network by deploying staff in other different locations within the PRC where our market presence is minimal, and establishing branch office and production facility in Guangzhou where there is continual demand for our products. With their proximity to the source of corn and other natural resources, we are assured of a reliable and consistent supply of our key raw materials. As our plans to expand to Guangzhou are still in the preliminary stage, we do not intend to use the net proceeds from the Invitation to fund our expansion to Guangzhou.

In addition, we plan to build new factory workshops and purchase and install new production lines, machinery and equipment in Yishui and Fushun to enhance our sweetener production capabilities to produce higher value sweetener products such as sorbitol, dextrose powder and high maltose syrup. Details are as follows:-

(a) New Yishui production facility

We entered into a land purchase agreement with the State Land and Resource Bureau of Yishui County on 6 November 2005 for the purchase of a piece of land near our current production facility for the purpose of establishing a new production facility, with an investment amount of RMB 4.5 million, which will be funded by bank loans and cash generated from operations.

We intend to use approximately RMB 60.0 million of the net proceeds from the Invitation to build new factory workshops and purchase and install new production lines, machinery and equipment for the production of sorbitol in our new Yishui production facility. The breakdown of the investment is as follows:-

The above investment is not expected to increase our Group's total sweetener output as the production of sorbitol will consume our existing liquid glucose. The annual production capacity of sorbitol is expected to be approximately 40,000 tonnes. The implementation of this future plan has begun and we expect to commence commercial production of sorbitol in the last quarter of 2006.

(b) Fushun production facility

We intend to use approximately RMB 20.0 million, of which RMB 12.0 million will be financed from the net proceeds from the Invitation, for the building of new factory workshops and purchase and installation of new production lines, machinery and equipment for the production of sweeteners, namely dextrose powder and high maltose syrup, utilising the surplus corn starch produced by our Fushun production facility. The breakdown of the investment is as follows:-

We expect our new production lines in our Fushun production facility to produce 10,000 tonnes and 30,000 tonnes of dextrose powder and high maltose syrup respectively per year. We expect to commence production in the last quarter of 2006.

To leverage on our research and development capabilities to create new higher value products and expand our product variety
Our research and development division has been responsible for the development of our products that have spurred our growth thus far, and it remains the main engine for our future growth. With the increasingly competitive conditions, product variety is important and we will engage in the research and development and distribution of new, innovative and higher value products, such as edible corn protein, corn fibre and sugar residue, and very high maltose syrup, and investing in advanced technology to facilitate the development of such products. We will continue to strengthen our product development capabilities by entering into more collaborations with research institutes, universities and external professionals and investing in advanced technology, where necessary, to improve the efficiency of our production facilities and to facilitate the development of new and innovative products. For this purpose, we intend to acquire a production line for glutamic acid for our Xingping production facility and a production line for bio-degradable plastics for our Yishui production facility. Glutamic acid is widely used in many industries including food, beverage, pharmaceutical and agricultural, and is one of the ingredients in the production of monosodium glutamate (MSG). Bio-degradable plastics can be produced using corn starch and is used in the production of various products including mulch, plastic bags and medicine.

To boost production capabilities and lower operating costs in our Fushun and Xingping production facilities by purchasing and installing a thermoelectricity generator in each of the production facilities

The introduction of a 6MW thermoelectricity generator in our Yishui production facility in FY2004 had contributed positively to our Group by boosting our production capabilities (through, inter alia, minimising disruptions to our operations resulting from power shortages) and lowering operating costs (as electricity generated from our thermoelectricity generator costs less than that purchased from third parties). Our thermoelectricity generator had completed its testing and commenced full-fledged operations since July 2004, and we estimated that our thermoelectricity generator had enabled us to save approximately RMB 1.6 million and RMB 4.5 million in operating costs in the financial year ended 31 December 2004 and the nine months ended 30 September 2005 respectively. Leveraging on this successful business strategy, we intend to complete the purchase and installation of 6MW and 12MW thermoelectricity generators in our Fushun and Xingping production facilities in 2008 and 2007, respectively, which we currently intend to fund through internal resources. We believe that upon successful installation of the thermoelectricity generators, our Fushun and Xingping production facilities will reap benefits similar to those gained by the Yishui production facility.

To increase the sale of our by-products by developing special feed products
We intend to focus on growing our business in the sale and distribution of our by-products. Looking forward, we believe that there is growth potential in this business segment. Hence we intend to utilise the by-products, namely, steepwater, corn germ, corn fibre and corn gluten meal derived from our production process, to develop safe, nutritious, effective and non-contaminated special feed products that adhere to the Green Food standards. In addition, since they are by-products derived from our production process, they are a valuable alternative source of revenue. We believe that expansion in this business segment will contribute to our growth.

To enter into acquisitions, joint ventures or strategic alliances to expand our business
In addition to growing organically, we may consider expanding our business by entering into acquisitions, joint ventures or strategic alliances with parties who create synergistic values with our existing business. Through such acquisitions, joint ventures and strategic alliances, we are looking to strengthen our market position, value-add as well as allowing us to expand into new businesses complementary to our existing business. As at the Latest Practicable Date, we are not engaged in any form of discussion with any potential party to acquire its business or form joint ventures or strategic alliances. We believe that our status as a listed company will position us to take advantage of such opportunities as and when they arise. Should such opportunity arise, we will seek approval, where necessary, from our Shareholders and the relevant authorities as required by the relevant laws and regulations.