2004 Interim Results

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2004 Interim Results Corporate Presentation
2
Highlights
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Summary of Interim Results
Six months ended 30 June, USD million
2003
2004
Change ()
15.5 56.0 19.2 57.9 10.6 57.6
Turnover Gross Profit EBITDA Net Profit Basic
EPS (US cents) Per Share Interim Dividend (US
cent) Per Share
109.4 37.4 31.8 15.7 1.04 0.506
94.8 24.0 26.7 9.9 0.94 0.321
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Continuous Improvementin Profitability

34.2
28.2
37.4M
25.3
30.7M
24.0M
14.3
11.2
10.5
15.7 M
12.2 M
9.9M
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Strong Balance Sheet
As of 31 Dec 2003 (USD million)
As of 30 Jun 2004 (USD million)
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Key Financial Ratio
30 June 2004
31 Dec 2003
2.09 9.0 4.7 (30 June)
2.12 7.4 6.7
Current Ratio (Times) Net Gearing Ratio
() ROE Ratio ()
net debt / equity
7
Business Review
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Market Analysis
Turnover by Geographical Location
ASEAN and other regions 5.2
ASEAN other regions 7.8
Taiwan 3.5
Taiwan 1.8
PRC 10.6
Vietnam 56.0
Vietnam 57.6
PRC 9.3
Japan 23.8
Japan 24.4
2003
2004
Six Months Ended 30 June
Other than Vietnam
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Major Market Analysis

• Vietnam
• 2004 1H economic growth at 7.1
• Operations unaffected by bird flu outbreak due to
  implementation of precautionary measures
• Higher sales due to effective nationwide
  promotional activities and deeper market
  penetration to cover more areas
• Double digit growth in all major products
  including MSG, lysine and starch products
• GA sales lower due to customers switch to buying
  MSG for direct processing

12.0 to US61.1 million
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Major Market Analysis

• Japan
• Main boost came from growing lysine sales at
  higher prices
• MSG sales temporarily down due to stock
  adjustment of a major customer expected to pick
  up again in 2nd half

12.9 to US26.1 million

• ASEAN
• Contribution rising rapidly due to phenomenal
  sales growth of 52 and 138 for MSG and starch
  products respectively
• Identified by the Group as a major growth market
• - comprised of some of Asias fastest growing
  economies with total
• population of over 500 million
• - free trade agreement in place with Vietnam
  

59.9 to US4.0 million
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Major Market Analysis

• PRC
• MSG sales 19.4 higher as peoples dining
  expenditure grew
• Sales of starch products rocketed by over 15
  times due to increased orders from large
  industrial customers as well as new customer
• Price of corn (main ingredient of GA) rose due to
  higher international grain prices which resulted
  in higher production cost

32.1 to US11.6 million
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Major Market Analysis

• PRC (cont)
• Acquisition of Shanghai Vedan Foods
• Multiple benefits
• significant boost in MSG production capacity in
  China.
• establishment of flagship head quarter in most
  efficient manner.
• ready infrastructure and facilities to allow
  speedy set up of new production lines.
• additional brand value from Hoping (??), a
  leading MSG brand in Greater Shanghai area.

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Product Analysis
Turnover by Products
Cassava starch based products 7.8
Others 4.7
Cassava starch based products 5.6
Others 5.4
MSG 66.2
MSG 68.5
Lysine 17.2
Lysine 12.4
G.A. 8.1
G.A. 4.1
2003
2004
Six Months ended 30 June
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Major Product Analysis

• MSG
• Stable pricing environment on the back of solid
  demand
• Significant sales increase in several major
  markets including Vietnam, China, other ASEAN
  countries and Europe. ASEAN and Europe recorded
  an increase of 52 and 40.6 respectively
• Lysine
• Continual strong demand despite bird flu
  resulting in higher prices
• Orders up in Vietnam as well as other markets
• Starch
• Sales of modified starch rose remarkably by 108
• Ability to customize diversified product types
  render increased orders from existing customers
• Secured news customers from China, Europe and
  Australia

11.6 to US72.5 million
60.4 to US18.8 million
63.2 to US8.6 million
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Summary of Performance

• Achieved great leap in turnover due to higher
  sales in MSG, lysine and starch based products
• Reaped significant cost saving benefits from
  switch to natural gas as fuel at Vietnam plant
• Higher efficiencies also contributed to higher
  profit margins
• Penetrated new markets including Europe,
  Australia, Russia and South Africa
• Important progress made in PRC market expansion
• Stronger financial position higher liquidity
  and lower net gearing ratio

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Prospects For 2H 2004
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Favorable MarketEnvironment in Asia
Market outlook in Asia expected to remain
positive
High Economic Growth Forecasts for 2004
Vietnam 7.5
PRC 7.0
Asia 6.1
Strong Demand for Vedans Products

• ASEAN Free Trade Area (AFTA) promotes trade flow
  within the region

• Low per capita MSG consumption in the PRC and
  ASEAN countries presents huge potential

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Boost Sales Capacity Expansion

• Phased expansion in various fast growth
  products

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Lower Costs Enhance Cost Structure

• Energy Source
• Full switch to natural gas implemented in
  Vietnam significant cost saving of at least US4
  million per year

• Materials
• Cassava
• Set up 3 more starch raw material processing
  plants in central part of Vietnam and also near
  border area to Cambodia
• Molasses
• Currently, mostly procured through third party
  trading agents, in the future, will purchase
  directly from large suppliers

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Improve MarginsNew Product Launch

• Wide applications for food, cosmetic,
  agriculture,
• pharmaceutical, environmental and water
• treatment
• Started testing market response since 2003
• through trial production
• Application for patent rights in process
• Commercial production to start by end of 2004 or
  early 2005

PGA

• Versatile flavor enhancers made from MSG and
  various natural seasonings
• Product launch expected by end of 2004
• Successfully innovated 4-5 different products
• Enjoys strong demand due to diverse tastes of
  Asian dishes

High Value-added Seasonings
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Our PRC Expansion Strategy

• Enhance operation of Shanghai Vedan Enterprise
• - Consolidation of brand and marketing
  resources
• - Integration of sales network with Xiamen
  Vedan
• - Recruitment of local talents to support
  expansion
• Merger and acquisition strategy remains
  identify
• suitable targets with considerable brand
  awareness
• and established sales network
• Strategic alliance with local GA suppliers to
  secure raw
• material supplies
• Localization of business invest in local
  talents
• Strengthen sales and marketing network

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Mission

• To be Asias leading manufacturer of
• fermentation-based amino acids,
• food additive products and
• cassava starch based products

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• Q A Session