Hong Kong, Mar 25, 2009 AEST (ABN Newswire) - During the financial crisis, Fufeng Group Limited (HKG:0546) remains in a strong position in their financial profile and continue to maintain their leadership in MSG and Xanthan gum market. There are significant growths in company revenue (rising from FY2007 RMB 2,445 million to FY2008 RMB 3,585 million) and Earning per share (rising from FY 2007 RMB 2.8c to FY 2008 RMB 17.75c).
Mr Gong suggests that the growth for his company was driven by the following factors.
Fufeng Group enjoys a larger market share in 2008 due to the industry consolidation happened in 2007. During 2007 there is a significant increase in raw material costs, many of the competitors were then forced out of business. Fufeng Group was able to ride out of the storm due to its solid financial background and leadership in the industry.
Apart from the increase in revenue due to their increased market share, there is also a significant increase in their profit margin. The profit margin jumped from 10.2% in FY2007 to 18% in FY2008. Mr Gong pointed out that there is an increase in MSG and Xanthan Gum price globally during the 2nd quarter of 2008 and there is also a decrease in raw material cost in the 4th quarter of 2008. These result in a more favourable trading condition for the company for FY 2008 and FY2009.
Mr Gong also stated that the company was able to achieve a greater manufacturing synergy by moving a part of their factory to their IM (Inner Mongolia) plant. With the lower production cost in its IM plant, the Group will further expand its Xanthan Gum's annual production capacity.
When asked about the company future growth and strategy, Mr Gong suggests that, the Group will continue its expansion plan in their IM facility. The new extension will give the Group more R&D and production capacity for their new products to come out at the end of 2009. Base on his understanding and research of the market, Mr Gong believes that the Group will easily continue its rising trend through to 2010.
About Fufeng Group Limited
Fufeng Group (
HKG:0546) is the world's largest producer of MSG, xanthan gum and a major supplier for a series of bio-fermentation products. The main products of the Group are food additives, animal nutrition, colloid and high-end amino acids. In fiscal 2016, Fufeng generated sales of approximately RMB11.2 billion and profit attributable to shareholders of about RMB1.09 billion. For more information, please visit our website www.fufeng-group.com
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