May 24, 2004

China Soybean Crusher Eyes IPO In Hong Kong

China's third largest soybean crusher, Heilongjiang Jiusan Oil and Fat, is eyeing a listing in Hong Kong in 2005 to raise around 500 million yuan ($60 million), the company's president said on Saturday.

Jiusan, based in the northeastern Chinese city of Harbin, has set up a working group based in Shanghai to prepare for the offering, Tian Renli said.

"Our initial estimates are that we'll raise 500 million yuan," Mr Tian told a news conference. "We'll apply for the listing next year and list then too."

Proceeds of the offering would be used to diversify into beauty and health products, pharmaceuticals and clothing, he said.

"Our company is already big enough - we don't need to expand anymore. Soybeans are going to replace cotton one day in making clothing," he added.

The company made is expecting profit to almost double to 200 million yuan in 2004 on a likely revenue increase of 75 percent to six billion yuan he said, helped by rising international soy bean prices. It already produces vitamins and other health products, and is in talks about cooperation with Japan's Sumitomo, Tian said without providing further details.

The company only uses non genetically modified soybeans and has a capacity to process two million tonnes of the commodity a year.

Mr Tian said their use of non-GM soy was an added bonus when developing their nascent export market, which at present only accounts for some two percent of sales. us."