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Fufeng Announces 2007 Annual Results
Date:4/21/2008

sers also recorded strong growth of 68% to reach 419,422 tonnes. Sales volume of xanthan gum increased by 14% to 6,216 tonnes; as the 10,000 tonnes xanthan gum production line in Inner Mongolia Plant only commenced operation in September 2007, it is expected that the Group will record strong growth in xanthan gum sales in 2008.

When talking about the Group's future strategies, Mr. Li said, "We believe we will overcome the difficulties in 2008; it is expected that the restructuring of MSG market will come to an end in 2008. Then the supply of MSG products will be stabilised and therefore the price may go up. With our self-produced glutamic acid and economies of scale, Fufeng will remain as the leading player in the market. Meanwhile, we believe that the xanthan gum market supply will stabilise this year whilst the demand will grow for more customers realize the advantages of the products. As xanthan gum production consumes less corn kernel, and our Inner Mongolia Plant enjoys low coal cost advantage, our production cost will decrease as we expand xanthan gum production. In the meantime, we will also increase domestic and export sales of xanthan gum as well as xanthan gum production capacity. We planned to increase xanthan gum production capacity to 28,000 tonnes at the end of 2008 or first half of 2009, by then, the Group will become one of the major xanthan gum manufacturers in the world."

"We will further consolidate and strengthen our leading position in the MSG segment and xanthan gum segment by leveraging our competitive strengths. Our ultimate goal is to become a leading corn-based biochemical product manufacturer in China and deliver satisfactory returns for our shareholders," Mr. Li concluded.

About Fufeng Group Limited

Fufeng is one of the leading vertically integrated manufacturers of corn- based biochemical products principally utilising fermentation technology in China, and mainly engaged in MSG related products and xanthan gum
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