24 September 2007 - China's Global Bio-chem Technology Group (GBT) has recorded a year-on-year consolidated revenue increase of approximately 32% to approximately HKD 2.7 billion for H1 2007, which was mainly due to additional output of high value-added downstream products.
The company also registered an enlarged sales volume of corn sweeteners and amino acids in H1. As a result, its gross profit of approximately HKD 601 million increased by approximately 30%. Despite pressure from financial costs and income taxes, net profit amounted to HKD 230 million, an increase of 21%, GBT has told FLEXNEWS in a written statement.
“Due to the continual development of downstream products, the internal consumption of corn starch from upstream operation further increased. The sales volume of upstream products to external parties thus dropped by approximately 16% as compared to the same period of the previous year. During the Period, the corn kernel price rose substantially by approximately 16% due to the anticipation that there would be an extensive use of corn kernels to produce oil-related materials such as ethanol in the PRC. With the effective selling price adjustment mechanism, average selling price of upstream products also increased by approximately 21%. At a result, the gross profit margin improved slightly from approximately 13.2% to approximately 13.6%”, said GBT.
Thanks to the support from the firm’s new refinery in Dehui, which commenced commercial production during this year, the reliance of raw materials, (i.e. glucose, supplied from the sweetener division for the production of amino acid products in Dehui) has been reduced.
Accordingly, the volume of corn sweeteners, mainly glucose, available for external sales became larger and matched with GBT’s strategy to expand its sweeteners market share, added GBT.
During the Period, sales of sweetener products increased by approximately 85% as compared to the same period of last year.
GBT also said that, whilst the Dehui factoey was not yet optimal, it took a temporary action to purchase corn sweeteners externally for HKD 122 million.
Joint Ventures
GBT has two joint venture projects with Cargill Inc. and Mitsui Group which are engaged in the manufacture and sales of high fructose corn syrup and sorbitol products respectively.
During the Period, these joint ventures recorded an operating profit and an operating loss of approximately HKD 8 million and approximately HKD 6 million respectively.
“In view of the strong demand of HFCS, stable return from this joint venture is expected. Looking forward, despite of the immateriality to the Group’s performance, the market condition of sorbitol segment is challenging because of the current unfavourable market condition. With the high flexibility in altering our production facilities and schedule, we can shift our sorbitol facilities to produce crystallised glucose instead”, GBT said in the statement.