Company Study of Angel Yeast Co., Ltd, 2009

Yeast is mainly applied for food ferment, seasonings and feedstuff additive. In China, the market capacity is about 250,000 tons annually, while the output is only about 90,000-100,000 tons per year, less than 1/3 of the potential demand. With the increasing growth of fermented food consumption such as bread, and the growth in the demand for deep-processed products like yeast extract, the potential of yeast market will get developed, and the output of yeast companies will be further expanded.

The world s largest yeast manufacturers, Lesaffre, AB Mauri, Angel Yeast and DSM, the output capacity of which respectively is 250,000 tons, 200,000 tons, 90,000 tons and 90,000 tons (after reconstruction), and the total output capacity accounts for more than 60% in the world. However, Angel Yeast has accounted for over 50% of output capacity in China s total, and its yeast output CAGR was 25.5% during 2001-2008.

Angel Yeast has six production lines in China, respectively located in Yichang, Yili Xinjiang, Chifeng Inner Mongolia, Binzhou Shandong, Sui County Henan, and Congzuo Guangxi. Currently, Congzuo production line is under reconstruction, and expected to be completed in July, 2009. Considering such factors as the distance between plant and raw material producing area, export convenience, income tax policy in processing area, it has increased its output capacity in Yili and Congzuo recently.

With the output capacity growth, the sales revenue of Angel Yeast has increased yearly, while the growth margin of net profit is slower than that of revenue. In 2009, its procurement cost of raw materials (mainly sirup) increases and preferential tax policies will decrease after 2010, both of which will impact on its profitability. According to the market demand, it is likely to expand output capacity (via setting up new plants or acquisitions), or invest to establish plants in foreign countries. In addition, it will continue to enlarge export.

Based on the data from authorities like the Ministry of Agriculture, Guangxi Economic Commission, Nanning (China- ASEAN) Commodity Exchange, and financial statements of key companies, the report makes an in-depth analysis on the status quo of global and China s yeast industry, rivals of Angel Yeast, as well as the market position and advantages disadvantages of Angel Yeast in China.