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Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)
Global Sweeteners’ revenue and gross profit surged by 25.7% and 23.1% driven by increased product price (Contd)
Supported by a 16.8% and 25% increase in the selling prices of glucose syrup and maltose syrup respectively, the revenue of glucose syrup and maltose syrup rose to HKD 561 mio and HKD 678 mio respectively (2009: HKD 347 mio and HKD 500 mio respectively).
To cope with the downstream production needs, the Group plans to expand the corn processing capacity in existing Jinzhou corn refinery by 300kt per annum. Construction of this corn processing facility is scheduled to commence in the second quarter of 2011 and is expected to be completed by the fourth quarter of 2011.
The revenue of maltodextrin increased by approximately 80.9% year on year to HKD 356 mio due to increase in the selling price and sales volume of 25.5% and 44.1% respectively to approximately HKD 3 100 per t and 113kt respectively. Revenue of crystallised glucose dropped by 22.7% to approximately HKD 371 mio during the year as compared to that of the previous year, as a result of 43.6% decrease in sales volume to approximately 168kt (2009: 298kt). However, increase in the selling price had contributed to improved gross profit margins of both crystallised glucose and maltodextrin for the year. During the year, the Group continued its effort in developing its overseas markets. The Group's export volume of upstream corn refined products and corn sweeteners for the year were approximately 45kt (2009: 46kt) and 41kt (2009: 15kt) respectively, while the respective export sales amounted to approximately HKD 102 mio and HKD 137 mio respectively, representing 27.5% and 211.4% increases from those of the previous year. Going forward, the Group will continue to secure the supply of corn kernel at the lowest cost through better utilisation of its current corn storage facilities and a more comprehensive corn procurement policy and network. (Continued in next column)
Feb/Mar 2011
In view of economic recovery and improved market sentiment, the Group intends to expand its downstream production. The Group plans to add a new HFCS (high fructose corn syrup) 55 production line of 60ktpa capacity in Shanghai to cope with the huge demand growth from food and beverage manufacturers in the region. Apart from this, the Group has also planned to resume the projects in Jinzhou which include a new crystallised glucose production facility of 100ktpa, a maltodextrin production facility of 40ktpa and a new HFCS 55 production facility of 100ktpa. The expansion plans of the Group will be principally financed by its internal resources and bank borrowings. "Sugar price in China has been rebounding from rock bottom since 2009 and current sugar price is nearly three times its lowest in 2008. The persistently high sugar price creates a favourable environment for the Group's sweeteners products, especially for crystallised glucose and HFCS 55. We see beverage producers are more inclined to switch from cane sugar to corn sweeteners now. We believe these new expansion plans will increase the Group's overall flexibility in adjusting its product mix in response to market needs and enable the Group to fully capture the opportunities we see in times of high sugar price," Mr Kong Zhanpeng, Chairman of Global Sweeteners said. (Continued on next page)
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