Corporate Presentation January 2009 1 Agenda Business Updates - - PowerPoint PPT Presentation

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Corporate Presentation January 2009 1 Agenda Business Updates - - PowerPoint PPT Presentation

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Corporate Presentation January 2009 1 Agenda Business Updates 2008 Interim Results & Analysis Appendix 2 Corporate Information Global player in lysine business Pioneer in using corn as raw materials for the production

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1

Corporate Presentation

January 2009

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2

Agenda

  • Business Updates
  • 2008 Interim Results & Analysis
  • Appendix
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Corporate Information

  • Global player in lysine business
  • Pioneer in using corn as raw materials for the

production of polyol chemicals

  • Major vertically-integrated corn-based biochemical

and corn-refined products manufacturer in Asia

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Corn Price Movement in China

Source: eFeedlink. Based on average price from northeast regions (Jilin, Dalian, Shandong)

1,250 50 1,300 00 1,350 50 1,400 00 1,450 50 1,500 00 1,550 50 1,600 00 1,650 50 1,700 00 1,750 50

Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 RMB / mt

  • 4Q 08 – corn price ↓ approx 12%
  • Abundant supply: 2008 harvest of approx. 156 million mt (↑11% yoy )
  • Continue cost control: purchase corn during harvest season to

maintain lowest corn cost

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2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 2008

R M B / m t

Amino Acids – Price Trend

Lysine Protein Lysine

Source: eFeedlink

  • 4Q 08 – lysine price ↓ approx 10%
  • Demand remains stable
  • End users maintain low inventory, impacted by food and economic

issues

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1H 2008 Amino Acids Turnover Breakdown

Lysine 39% Protein Lysine 58% Others 3%

Amino Acids – Detail Breakdowns

1H 08 Quantity (mt) YOY change Export volume (mt) YOY change Lysine 60,150 13% 34,900 1% Protein Lysine 159,750 25% 42,800 36% Others 3,400 (39%) 920 49%

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Lysine Business Overview

  • Remain one of the global players position; market shares:
  • Global: ~35%
  • PRC: ~75%
  • 2009 market environment
  • Sensitive market price
  • Sustainable volume
  • Challenging environment to small players
  • Cost & production control
  • Stable income with GP margin of 20+
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Corn Based Polyol Chemicals

Corn Starch Glucose ((C6H10O5)n + H2O) Sorbitol (C6H14O6)

Hydrogenation Reaction Chemical reaction with catalysts

Polyol chemicals mixture (or product: Resin):

Ethylene Glycol (C2H6O2) Propylene Glycol (C3H8O2) Glycerin (C3H8O3) Butanediol (C4H10O2)

Distillations / Separations Saccharification

Products: EG / PPG Sales & Marketing – anti-freeze, plastics, textiles industries, etc.

Polyol – a collective name for a group of chemicals

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Polyol – Sales & Marketing

Intermediate Materials

Polymeric polyol Polymers Polyester

Adhesive Plastics Coatings Footwear Films Glasses Fiberglass Coolant Lubrication Solvent Detersive Fibre Textile

Applications Raw Materials EG PG Glycerin Resins

GBT’s products

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  • Production facilities :
  • Pilot Plant (for R&D purposes): 10,000 mtpa
  • Commercial Plant : 200,000 mtpa
  • Readily markets:
  • Chemicals demand/consumption in PRC: 5 – 6 million mt
  • Over 70% demand relies on imports
  • Petroleum-based chemicals vs green products
  • Breakeven: Corn Price RMB1,400/mt VS Oil Price US$40/barrel
  • Production schedule and target volume / margin alter according to

market sentiment

  • Future expansion plan’s schedule altered in view of market sentiment

Polyol – Business Overview

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Future Development

Phase 1: 1 million mtpa Corn Refinery Phase 2: 500,000 mtpa Polyol Chemicals Phase 3: 700,000 mtpa Corn Refinery Phase 4: 500,000 mtpa Polyol Chemicals 2010 2011 2009 2008

2H 1H 2H 2H 2H 1H 1H 1H

  • New production base: Xinglongshan
  • Vertically integrated facilities:
  • Corn refinery: 1.7 million mtpa
  • Polyol chemicals: 1.0 million mtpa

Phase 1: 1 million mtpa Corn Refinery Phase 2: 500,000 mtpa Polyol Chemicals

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Capex 2008 - 2009

200 400 600 800 1000 1200 1400 1600 2008* 2009* 2008 2009 HK$ (million)

Maintenance

* Original plan in 1Q 08 Latest schedule Corn Refinery & supporting facilities Polyol chemical facilities Corn Refinery & supporting facilities

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Designed Capacity

Designed Capacity (mtpa) FY2008 FY2009 FY2010 Upstream Corn Refinery 2,400,000 3,400,000 3,400,000 Downstream

  • Amino Acids

450,000 450,000 450,000

  • Modified Starch

80,000 80,000 80,000

  • Polyol Chemicals

210,000 210,000 210,000

  • Corn Sweeteners

Global Sweeteners Holdings Limited 1,220,000 1,510,000 1,510,000

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2008 Interim Results & Analysis

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Turnover Breakdown

Turnover (HK$‘000) 1H 2008 1H 2007 Change Upstream

  • Corn Refinery

1,511,139 753,544 101% Downstream

  • Amino Acids

1,932,676 1,326,140 46%

  • Polyol Chemicals

697,252 4,205 N/A

  • Modified Starch

91,623 81,016 13%

  • Corn Sweeteners

619,263 569,555 9%

1H 2 2007 T Turnover B Breakdown

Modified Starch 3% Corn Sweeteners 21% Corn Refinery 28% Amino Acids 48% Polyol Chemicals 0%

1H 2 2008 T Turnover B Breakdown

Corn Refinery 32% Modified Starch 2% Amino Acids 40% Corn Sweeteners 13% Polyol Chemicals 13%

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Gross Profit Breakdown

1H 1H 2008 2008 Gros

  • ss Prof
  • fit Breakdow

kdown

Corn Refinery 23% Modified Starch 1% Corn Sweeteners 13% Amino Acids 42% Polyol Chemicals 21%

1H 2 2007 G Gross P Profit B Breakdown Corn Refinery 17% Modified Starch 2% Corn Sweeteners 25% Polyol Chemicals 0% Amino Acids 56%

Gross Profit (HK$‘000) 1H 2008 1H 2007 Change Upstream

  • Corn Refinery

288,242 102,798 180% Downstream

  • Amino Acids

535,905 342,976 56%

  • Polyol Chemicals

269,034 (10,265) N/A

  • Modified Starch

13,597 12,313 10%

  • Corn Sweeteners

158,855 153,215 4%

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Sales Analysis

Quantity (mt) Gross Profit Margin (%) 1H 08 1H 07 % Change 1H 08 1H 07 % Change Upstream Corn Refinery 650,160 425,540 53% 19% 14% 5% Downstream Amino Acids 223,330 186,350 20% 28% 26% 2% Polyol Chemicals 83,723 985 N/A 39% N/A N/A Modified Starch 30,090 33,890 (11%) 15% 15%

  • Corn Sweeteners

276,723 309,378 (11%) 26% 27% (1%)

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Export Breakdown

Turnover Volume US$’000 mt Amino Acids 98,373 70% 78,600 34% Modified Starch 4,769 3% 12,660 6% Corn Refined Products 38,249 27% 137,000 60% TOTAL 141,391 228,260

Export to Total Turnover : 23%

1H 1H E Expor xport T Tur urnove nover B By R y Regi gions

  • ns

Asia 44% Europe 36% Australia 3% South & North America 17% Africa 0%

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Operating Cost Structure

1H 08 1H 07 Raw materials (Corn + Sweeteners) 56% 56% Other chemicals 11% 5% Utilities 12% 16% Labour 1% 1% Depreciation 5% 7% Packaging 3% 2% Production Overhead 1% 2% Selling and Distribution Expenses 7% 6% Administrative Expenses 3% 4% Other Operating Expenses 1% 1%

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Operation Results

2008 1H 2007 1H Change

HK$ million

Turnover 4,852 2,734 78% Gross Profit 1,266 601 111%

  • Corn based biochemical products

977 498 96%

  • Corn refined products

288 103 180% EBITDA 1,111 549 102% Operating Profit 883 381 132% Net Profit to GBT’s shareholders 602 230 162% Basic EPS HK 26.0 cents HK 9.9 cents Interim Dividend Per Share HK 1.5 cents HK 1.0 cent

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Operational Indicators

30 Jun 08 30 Jun 07 Change Gross Profit Margin (%) 26% 22% 4%

  • Corn based biochemical products

29% 25% 4%

  • Corn refined products

19% 14% 5% Operating Margin (%) 18% 14% 4% Net Margin (%) 13% 8% 5% ROE 8% 4% 4%

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Balance Sheet

HK$ million 30 Jun 2008 (unaudited) 31 Dec 2007 (audited) Change

Non-current Assets

9,767

8,732 12% Current Assets

5,557

4,666 19% Current Liabilities

5,093

3,264 56% Cash and Bank Balances

2,439

2,022 21% Shareholder’s Equity

7,311

6,463 13% Interest-bearing Loans

5,583

4,803 16%

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Key Financial Ratios

30 Jun 2008 31 Dec 2007 Current Ratio 1.1 1.4 Quick Ratio 0.8 1.1 Gearings:

  • Total Debt to Total Assets

49% 48%

  • Net Debt to Equity

43% 43% Inventories Turnover Days 73 87 Debtors’ Turnover Days 52 58

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Appendix

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1994 GBT was founded 1996 Established R&D Centre 1998 Corn refinery began 2001 Listed on Main Board

  • f HKEx

2000 Lysine plant began

  • peration

1999 Modified starch & corn sweeteners plants began operation 2002 HFCS JV plant began

  • peration

2004 Protein lysine & polyol pilot plants began

  • perations

2006 Glutamic acid & crystallised glucose plants began operations 2003 R&D on Polyol began 2007 Spun-off Global Sweeteners Polyol plant began operation 2005 Sorbitol plant began

  • perations

1994 1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Corn Feed Manufacturer Corn Refinery Corn-based Biochemical Chemicals

Milestone

2008 Scales up polyol project

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Vertical Integration and Product Diversification

Raw Material

Corn Kernel

Upstream Process

Gluten Fibre Corn Oil Corn Refinery Amino Acids Modified Starch Corn Sweeteners Polyol Chemicals

Downstream Process

Corn Starch Biochemical / Chemical processes

Global Sweeteners Holdings Limited