April 19, 2004

Almost One Half of China's Global Biochemical's Profits in 2003 Derived from Its Lysine Business

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The global shortage in lysine supply in 2003 resulted in a sharp rise in prices. The average lysine sales price in 2003 of Global Biochemical, one of China's major local lysine producers, reached RMB20,000 per ton, a 25% increase over 2002. Lysine sales contributed to 35% of the company's total revenue and 45% of total profits in 2003.

Global Biochemical's Co-Chairman Liu Xiaoming expects the supply of lysine will continue to be competitive this year. He conservatively estimates average sales price of its lysine products to continue to increase in 2004 by 10% to RMB22,000 per ton.

Liu believes that Global Biochemical's lysine production will be further aided by the forthcoming reduction and eventual revocation of China's agriculture tax. Farmers planting soybean or corn will receive subsidies of RMB100 per hectare. As corn is a major ingredient in the production of lysine, this change in government's agriculture policy would help keep the price of corn to the benefit of the company's lysine production business.