September 1, 2011

China Agri-Industries Holdings Limited, a Hong Kong-listed member of COFCO Group, posted a 48.1% rise in turnover to HKD33.6 billion (US$4.31 billion) for the first half of 2011, despite domestic price fixing on edible oil.

The company's first-half net profit gained 21% on-year to HKD1.6 billion (US$205 million). Operating profit rose by 14.7% to HKD2.64 billion (US$339 million) but the operating profit margin slid to 7.9% from 10.2% a year ago.

Oilseed processing business remains to be the biggest contributor to turnover. China Agri-Industries Holdings posted HKD21.8-billion (US$2.80-billion) turnover and HKD1.9-billion (US$244-million) net profit in first-half oilseed processing, up 70.3% and 18.3% on-year respectively. The turnover covered 64.9% of the total. The company sold 1.24 million tonnes of edible oil and 1.94 million tonnes of oilseed meal in the first six months, up 33.2% and 29.4% on-year.

As one of the largest edible oil and oilseed producers in China, China Agri-Industries Holdings sells soyoil, palm oil, rapeseed oil and oilseed meal. The relatively tight global supply of soy in the first half forced soy price to maintain high.

China fixed the prices of some edible oil, which caused a loss in oilseed processing industry. But China Agri-Industries Holdings was little affected as it took favourable chances earlier to procure raw materials and cautiously undertook hedging for these raw materials.

The company had nine oil processing plants in Shandong, Jiangsu, Hubei, Jiangxi, Guangdong and Guangxi as at June 30, 2011 with 8.28 million tonnes of annual pressing capacities and 2.85 million tonnes of refining capacities.

Moreover, the company will put its four oilseed processing facilities underway in Anhui, Hubei and Chongqing and one soy processing facility in Tianjin into production in the second half of 2011. These can bring 2.1 million tonnes of pressing capacities and 1.32 million tonnes of refining capacities.

The company's biofuel and bio-chemical business generated HKD6.1679-billion (US$792-million) turnover and HKD523-million (US$67-million) operating profit in the first half, up 23.9% and 6.3% on-year. The turnover of biofuel rose by 38.1% to HKD2.867 billion (US$368 million) following the increases of ex-factory price of fuel ethanol by the National Development and Reform Commission.

China Agri-Industries Holdings sold 168,000 tonnes of fuel ethanol in the first half, down 9.5% on-year. Its sales of ethyl alcohol and edible alcohol gained 23.7% to 71,000 tonnes.

First-half bio-chemical business's turnover advanced 13.7% on-year to HKD3.3 billion (US$424 million) on corn price hike.