2004 Annual Results
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2004 Annual Results 15 March 2005 PowerPoint PPT Presentation


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2004 Annual Results 15 March 2005. 2004 Annual Results 15 March 2005. 2004 Annual Results 15 March 2005. Highlights. Highlights. This is the third consecutive year it recorded double-digit growth in both turnover and net profit.

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2004 Annual Results 15 March 2005

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2004 annual results 15 march 2005

2004 Annual Results

15 March 2005

2004 Annual Results

15 March 2005

2004 Annual Results

15 March 2005


Highlights

Highlights


Highlights1

Highlights

  • This is the third consecutive year it recorded double-digit growth in both turnover and net profit.

  • Dominant position in Vietnam further enhanced; also deeper penetration in the PRC, ASEAN and European markets

  • Significant sales growth in major products including MSG, lysine and cassava starch-based products

  • Completed acquisition of Shanghai Vedan Foods’ MSG business; started to bring in revenue

  • Research and development capability enhanced through establishment of a technology research and development centre


Summary of final results

Summary of Final Results

Twelve months ended 31 December, USD million

2004

Change

2003

+10.4%

+18.6%

+10.2%

-6%

N/A

N/A

Turnover

Gross Profit

Net Profit

EPS (US cents)

Gross profit margin

Net profit margin

225.0

64.8

24.3

1.61*

28.8%

10.8%

203.8

54.6

22.1

1.72

26.8%

10.8%

* 2003 Weighted average of ordinary shares in issue was 1,264,508,000

while it is 1,514,746,000 in 2004.


2004 annual results 15 march 2005

Factors Undermined Growth (I)

Short Term Influences Undermined Robust Growth:

  • Temporary suspension of the co-generation power plant, the rise in prices of raw materials, packaging materials and transportation costs affected overall production cost

  • Some of the plants expansion works delayed due to shortage of building materials

  • These influences, however, are seen as temporary; the Group is confident in its long term growth and profit margin is expected to improve


2004 annual results 15 march 2005

Factors Undermined Growth (II)

• Production Cost (2H 2004 compared with 2H 2003):

Change

Raw materials21%~40% 

(such as Molasses, Cassava, etc.)

Packing materials 20%~25% 

Transportation 10% 

Admin. & Sales Expenses 12% 

2H 20032H 2004

Gross Profit Margin 28.1% 23.7%


Strong balance sheet

Strong Balance Sheet


Key financial figures

Key Financial Figures

31 Dec 2004

31 Dec 2003

2.09

9.0%

11.2%

1.79

14.4%

10.6%

Current Ratio (Times)

Net Gearing Ratio* (%)

ROE Ratio (%)

* net debt / equity


Business review

Business Review


Market analysis

Market Analysis

Revenue Growth Across all Markets

Europe

2.4%

ASEAN Countries

4.1

Europe

1.5%

ASEAN Countries

2.8%

Taiwan & others 2.2%

Taiwan & others 3.8%

PRC

13.1%

Vietnam

56.3%

PRC

10.6%

Vietnam

58.4%

Japan

22.9%

Japan

21.9%

2004

For the year ended 31 December

2003


Market analysis1

+36.4%

+61.1%

+67.8%

+5.7%

+6.4%

USD Million

126.7

119.0

2003

2004

49.3

46.6

29.5

21.6

9.2

5.3

5.7

3.2

Vietnam

Japan

PRC

ASEAN

Market Analysis

Revenue Growth Across all Markets

Europe

For the year ended 31 December


Major market analysis

61.1% to US$9.2 million

6.4% to US$126.7 million

Major Market Analysis

Vietnam

  • Growth in sales volume and turnover; driven by higher MSG sales

  • Higher sales due to effective nationwide promotional activities and deeper market penetration into rural areas

Japan

  • Main boost came from growing lysine sales at higher price

    ASEAN

  • Sales growth through aggressive and effective market expansion activities

5.7% to US$49.3 million


Major market analysis1

67.8% to US$5.3 million

Major Market Analysis

PRC

  • Contribution from Shanghai Vedan; MSG sales grew at an average rate of 28% per month since July

  • Sales of modified starch enjoyed significant growth

  • Overall prospects remain promising

    Europe

  • MSG and modified starch sales up significantly

36.4% to US$29.5 million


Product analysis

Specialty chemicals

3.0%

Others

2.3%

Cassava starch based products

6.6%

MSG

69.5%

Lysine

14.4%

G.A.

4.2%

Product Analysis

Turnover by Products

Specialty chemicals

2.7%

Others

2.2%

Cassava starch based products

6.4%

MSG

69.0%

Lysine

13.5%

G.A.

6.3%

2004

2003

For the year ended 31 December


Product analysis1

Turnover by Products

USD

Million

156.3

140.6

2003

2004

32.5

27.4

13.1

14.7

12.8

9.5

5.5

6.8

Cassava starch

based products

Specialty Chemicals

Lysine

MSG

G.A.

Product Analysis

+11.2%

+18.6%

+12.9%

-25.4%

+25.2%

For the year ended 31 December


Major product analysis

25.4% to US$6.8 million

Major Product Analysis

  • MSG

  • Rising living standard in Vietnam boosted food processing industry resulting in even stronger eemand

  • Lysine

  • Strong demand from PRC drove prices up significantly in the first half

  • Starch

  • : Native Starch

  • : Modified Starch

  • Strategically reduced sales of native starch to focus on the modified starch market that enjoys a higher margin

  • Specialty Chemicals

  • Industrialization and modernization of Vietnam prompted market demand

11.2% to US$156.3 million

18.6% to US$32.5 million

12.9% to US$14.7 million

44.4% to US$4.9 million

132.2% to US$9.8 million


2004 annual results 15 march 2005

Research and Development

Establishment of a Technology R&D Centre

  • Hired a new R & D director

  • Equipped with new laboratory and facilities

  • To enhance technical expertise and boost research and development capabilities

  • Responsible for the development of new products and new production processes

  • Initial focus on starch and food related areas

  • Diversify source of carbohydrates


Prospects for 2005

Prospects For 2005


Major growth drivers

  • Enhance cost structure by reducing production and raw material costs

  • Further expansion into new markets especially in ASEAN countries and PRC

  • Excellent market potential of new products: r-PGA and high value-added seasonings

Major Growth Drivers

Growth Drivers

  • Continual capacity expansion to capture rising market demand


Enhance cost structure

Enhance Cost Structure

Cost Reduction Measures:

  • Expanded GA production facilities: to enhance the scale of production efficiency

  • To set up 2 more starch raw material processing plants in central and central northern part of Vietnam

  • Explore an alternative source of carbohydrates

  • Improve existing processing technology


2004 annual results 15 march 2005

Capacity Expansion

Expansion works, completed in 2004, increases production capacity for 2005:

  • Expanded GA production facilities: increasing annual production capacity from 140,000 tons to 180,000 tons (Dec. 2004)

  • Expanded specialty chemicals production facilities: increase annual production capacity of 100% Caustic Soda from 60,000 tons to 80,000 tons (Dec. 2004)

  • Increased annual production capacity of modified starch from 40,000 tons to 60,000 tons (Mar. 2005)


New product launch

  • Versatile flavor enhancers made from MSG and

  • various natural seasonings

  • Enjoys strong demand due to diverse tastes of

  • Asian dishes

  • Product launch expected in second quarter of

  • 2005

High Value-added

Seasonings

New Product Launch

  • Plant construction delayed due to material storage. Estimated completion is 4th quarter 2005

  • Work underway on application for Sales permit

  • Cooperate with potential sales agent to develop sales and marketing plan

  • Continue to work with clients and research institutions on various industrial applications

r-PGA


New market expansion

New Market Expansion

I) PRC: growth by mergers, acquisitions and strategic alliances

- Shanghai Vedan as base in the central region and Xiamen Mao Tai plant as base in the south to support future expansion into second and third-tier cities

- M & A strategy remained; several targets identified, discussion underway

- Strategic alliance with local GA suppliers to secure raw material supplies

II) ASEAN: a major growth market with total population over 500 million;

comprised of some of Asia’s fastest growing economies

- Explore opportunities for M & A and strategic alliances

III) Europe: a largely unexplored market with high growth potential


2004 annual results 15 march 2005

“To be Asia’s leading manufacturer of

fermentation-based amino acids,

food additive products and

cassava starch based products”

Mission


2004 annual results 15 march 2005

2004 Annual Results

15 March 2005

2004 Annual Results

15 March 2005

2004 Annual Results

15 March 2005


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