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PRODUCT FAQS

1. What are the Company’s operations?

China Food Company, based in Shandong province in the People’s Republic of China, a region with a population of circa 94 million, operates a group of well-established food manufacturing businesses producing a range of cooking and dipping sauces. China Food is the 9th largest producer of soya sauce in China, with a very strong brand for cooking and dipping sauces which are sold through a network of distributors and outlets of supermarket chains in the north-eastern region of the PRC, such as Tesco, Wal Mart, Carrefour and Jialejia.

The animal feed business, Fuss Feed, produces premix, concentrate and compound feedstuffs, and is also based in Shandong, an important province for the production of livestock in China.

2. Is your business strategy confined to driving organic growth or are there plans to target acquisitions? Does the strategy differ between the two sides to the business, condiments and animal feed?

The strategy is for organic growth but does not preclude acquisitions if suitable targets come along.

3. How exposed is the Company to the risks associated with changes in foreign currency rates?

Our operation currency is RMB and reporting currency is GBP. There is minimum impact on the trading as most of the transactions are in RMB. The only impact would arise when converting the Company’s Results in RMB to GBP if there is a fluctuation of GBP:RMB exchange rates.

4. What is the Company’s current cash position?

The Group had cash and cash equivalents of £8.7 million at 30 June 2010.

5. What are the Company’s net assets per share?

The Group’s net assets at 30 June 2010 amounted to 51.4 pence.

6. How much of the Company’s revenues are derived from Fuss Feed and how much from Fu-Rich?

Fu-rich contributes approximately 35% of the revenues but 60% of the profitability.

7. What are the drivers of growth for the Group?

The key drivers for growth are:

  • Brand building
  • Product range expansion
  • Market expansion
  • Food safety

8. How would you describe China Food Company to someone who had no familiarity with your industry?

We are a China-focused consumer condiments company.

9. Please describe the different products you offer?

We offer a range of soya sauces, vinegar and bean paste for our consumer condiments business. For our animal feed, we offer pre-mix, concentrate and compound feed for chicken, partridges, duck and pigs.

10. When and where was the Company incorporated?

China Food Company Plc was incorporated in 2006 as a cash shell listed on the London AIM as Vestpa Plc. The reverse-takeover of Full Fortune was completed in December 2007, after which Vestpa was renamed “China Food Company Plc”. Full Fortune Holdings Pte Ltd is a Singapore incorporated investment holding company. It holds 100% of the operating subsidiaries in China.

Fuss Feed (Weifang) Co., Ltd was incorporated in 1994 (“Fuss Feed”) and Shandong Fu-rich Co. Ltd was incorporated in 2001 (“Fu-rich”). Fu-rich is a 100% subsidiary of Fuss Feed.

11. What awards, if any, has China Food Company won?

2010 Top businessmen in Weifang industries (Lin Qi) 2010 One of the top 8 “Best food production demonstration center”
2009 Shandong best brands – for bean paste
2008 Top 10 Soya Sauce Brands in China
2007 Shandong best brands – for soya sauce
2006 Top 50 brands in the PRC for condiments
2006 Certificate of Recognition – For producing quality product "Fushi Brand Soya Sauce”
2006 "Recommended product" – "Fushi Brand Soya Sauce and Vinegar" in the 2006 Shandong Hotel Purchase Top Ten Recommended Products Forum

12. What is the estimated size and growth rates of the markets the Company currently operates within?

The Company is currently active in only Shandong province, Hebei and Henan with over 1800 retail presences with a combined population of 250 million people where Shandong is approximately 95 milion, Henan is 97 million and Hebei is 66 million. In the next 1-3 years, we aim to expand into Anhui and Jiangsu province which has a combined population of 140 million.

13. Who are China Food’s main competitors in the animal food business? And in the condiment business?

In the animal feed business, the industry is very fragmented. The largest competitor is “Liu He”. For the condiments business, our main competitors are “Qiao Xifu” and “Shinho”.

14. What does the Group consider to be China Food’s unique selling point(s)?

We are the only Chinese condiments company listed overseas. Others are listed in Hong Kong or China. Against the other local brands, we have the advantage of foreign governance and perceived quality.

15. How many staff does China Food currently employ?

China Food employs over 480 people. Taking into account part-time sales/promoters and part-time factory staff, this figure increases to 600 people.

Last updated 02 Nov 2011