Amidst the recent economic turbulence in Vietnam, investors are more and more concerned about its impact on publicly listed companies of China who made investments in this country. On 14 June 2008, Sichuan New Hope Agribusiness Co. Ltd (000876) made an announcement regarding the progress of its investments in Vietnam.

The company claimed this round of inflation in Vietnam had posed some difficulties for the production and operation of its Vietnamese subsidiaries. The depreciation of the Vietnamese Dong against the US dollar and exchange rate change of the RMB against the US dollar also has had some negative impact on the profit of the company. In addition, production, logistics and labor costs of the company also have increased, including a price hike in raw materials.

The company announced that it had carried out active measures to curb the surging costs and offset inflation risks. The company now has four projects in Vietnam. Three plants of the company, which had been put into operations, had booked RMB 30 mln in profit in the first five months of 2008. In May 2008 alone, these three plants contributed RMB 9 mln in profit.

The company said it would take effective measures to overcome difficulties brought about by inflation and may explore integration operations in regard to it feed, breeding, slaughtering and processing businesses in Vietnam.

Source: Shanghai Securities News

Date: 14 Jun 2008

CN01/MZ/AR/WH