Our Strategies

We intend to implement the following principal strategies to grow our business and create value for our shareholders.  We will:

Our Company will continue to maintain a broad portfolio of processed agricultural products in order to capture the many growth opportunities arising from the changing food consumption patterns in China, particularly those relating to increases in consumption of vegetable oils, processed foods and beverages. More importantly, as consumers tastes evolve, we will continue to monitor market trends and consumer preferences, and constantly improve our product offerings while introducing new products to meet demand. For example, our wheat processing business has invested in new capabilities to produce frozen dough and higher-end noodles and bakery products. By maintaining a diversified and continually updated portfolio of products, we can better meet the new and increasing demands of Chinese consumers for higher quality and healthier food.

We plan to expand our fuel ethanol production capacity (in particular that of our non-grain ethanol) in order to address the growing demand in China for fuel ethanol as an additive to gasoline to produce more environmentally-friendly fuel. Our goal is to become the leading fuel ethanol supplier in China. We currently either fully or partially own many corn-based fuel ethanol production facilities in the northeastern provinces of Heilongjiang and Jilin in China. We have also built the first phase of a tapioca-based fuel ethanol production facility in Guangxi Zhuang Autonomous Region in southern China. In addition, we are pursuing other fuel ethanol production projects in north, northeast and central China in order to reach our targeted annual fuel ethanol production capacity of 1.08 million metric tons by the end of 2010.
We also plan to expand the corn processing capacity of our biochemical business by investing in projects or by pursuing selective acquisition opportunities. The products processed by our biochemical business are starch and starch-based further processed products.

We view continued improvements in cost efficiency and effective cost control as critical elements in maximizing our profitability and enhancing our competitiveness within the industries that we operate. Our strategies for achieving greater cost efficiency include:
(1) Continuing to upgrade our production processes and technologies to improve production efficiency;
(2) Coordinating and centralizing purchasing activities whenever possible to strengthen our bargaining power with suppliers;
(3) Maintaining and forming long-term relationships with key suppliers overseas as well as in domestic markets to ensure a stable supply of raw materials;
(4) Consolidating our distribution networks to reduce logistics costs;
(5) Maximizing the synergy arising from the integration of different business divisions;
(6) Continuing to take advantage of our experience in cost control.

We plan to continue to invest in research and development in each of our product areas to continually improve our production processes, and to create new and better products for our customers. For example, with the aim to securing a more economical source of energy, we are currently conducting cellulosic ethanol research. Where appropriate, we will also enter into strategic alliances, partnerships or joint ventures with research institutions and world-class industry players to develop, produce and market new products.

Attracting and retaining the best personnel is important to our long-term success.  By continuing to build a strong corporate culture focused on integrity, teamwork, professionalism and innovation, offering competitive compensation schemes linked to our equity market performance for senior management and key technical staff, and investing in employee training and development for our staff (particularly for our management personnel), we hope to attract and retain highly skilled technical and managerial personnel. More importantly, we would like to set up an all-inclusive evaluation system and increasingly base promotion on the performance and merit of our employees.