November 17, 2008

Luzhou Bio-Chem Technology Ltd said its net profit for the first nine months fell 13.9 percent to RMB 31.9 million, mainly due to higher raw material costs, which rose during the Olympics.

Group revenue rose 33.7 percent to RMB 2 billion, thanks to higher sales across all of the Singapore-listed company's business segments, in particular corn starch and by-products, which saw sales rise 92.3 percent and 57.6 percent to RMB 187.8 million and RMB 510.1 million, respectively.

Revenue from corn sweeteners grew 13.9 percent to RMB 1.2 billion in the 9 months, Luzhou said in a statement. Revenue from the food and beverage industries grew 13.9 percent to RMB 1.2 billion, Luzhou said.

Fermentation industry sales remained flat, but sales from other industries rose 82.2 percent to RMB 590 million thanks to greater demand for animal feed and other by-products.

"Higher prices of animal feed, coupled with an increase in the number of animal feed produce manufacturers looking at alternatives to reduce cost, have led to stronger demand for the group's by-products, which are mainly sold to animal feed produce industries," the statement said.

Meanwhile, export revenue grew 34.8 percent to RMB 274.6 million, accounting for 13.6 percent of total revenues in the first 9 months. For the third quarter, revenues rose 19 percent to RMB 696.8 million, Luzhou added.

It said its plans for capacity expansion remain on track. Luzhou's new production lines for sugar alcohol and corn oil started production in the third and fourth quarters, respectively.

The group is set to start producing amino acids in the first quarter next year. It added that it expects the prices of corn, its key raw material, to remain stable or drop slightly in the near-term.

US$1 = RMB 6.83 (November 17 2008)