Fufeng Announces 2008 Interim Results With Strong Sign o...(e gross profit ratio maintained at high ...)

Talking about the Group's future strategies, Mr. Li said, "It is expected that the market consolidation in MSG market will continue in the 2H of 2008. Then the supply of MSG products will be further stabilised and therefore the price will be maintained at the high level. The sales volume of the Group's MSG is expected to increase following the commencement of production of the Group's 70,000 tonnes new MSG plant in October 2008. We will further lower production cost of MSG segment after part of the reengineering project of MSG segment in Inner Mongolia Plant completed in early August and increase an annual production capacity of glutamic acid of 40,000 tonnes in late 2008. Furthermore, the reallocation and reengineering of the Junan Plant I to Baoji Plant and IM Plant will increase the annual production capacity of glutamic acid of 40,000 tonnes, MSG of 20,000 tonnes, and fertilizers of 100,000 tonnes in late 2008. Meanwhile, we believe that the xanthan gum market supply will further stabilise in the 2H of 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 Inner Mongolia. As scheduled, the additional xanthan gum production capacity of 10,000-tonne in the Inner Mongolia will be commenced in the end of 2008. By then, the Group will have xanthan gum production capacity of 28,000 tonnes, and will become one of the major xanthan gum manufacturers in the world.

"We will further consolidate and strengthen our leading position in the MSG market and xanthan gum segment by leveraging our competitive strengths. Besides, we will further develop new value added products along the production chain, like corn oil and chicken powder.
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