Q1. Is Soya meal a substitute to lysine? How does the price of Soya meal affect the price of lysine?

Soya meal is a type of macro-ingredient in feed which contains 8-15% lysine. In contrast, lysine is a micro-ingredient in pure form. In the past, Soya meal had been popular among many farmers supplying lysine in animal diets when the price of soya bean was low and the farmers did not have extensive knowledge on the additive ratio. However, they may need about ten times more to supply sufficient amount with today's lysine prices and this is not cost effective. The side effect of having too much Soya meal is excessive fat, which is not healthy for animals.
It has been observed over the past two years that there was no direct relationship between the price of Soya meal and lysine.

Q2. Who are the customers of lysine?

We mostly sell to agents but the feed producers may also purchase from us.

Q3. What are the differences between lysine and protein lysine?

Both lysine and protein lysine are feed additives which only differ in their lysine content. Lysine is a conventional feed additive that has 98% lysine content, so it is known as 98-lysine. The relatively new product protein lysine contains 65% lysine and the rest is mainly protein. 
The production cost of protein lysine is lower compared to lysine. We enjoy further cost savings in the production process since there is no sewage treatment during production.

Q4. How does the Group regulate the price of protein lysine?

Theoretically the price of protein lysine should be set at 65% to that of 98-lysine according to its lysine concentration. We offered some discounts of around 60% on lysine's price for this product when it was first launched in 2004 to gain acceptance by our clients. The product was quickly absorbed by the market since the feed producers benefited from the lower price with free additional protein. Currently, the product is selling at a price of about 50-55% of the lysine's price.

Q5. What are the raw materials? How does the group source them?

Corn is the key raw material for the Group. Generally from November to March it is cheaper to buy corn from farmers, while from April to October we purchase from the national warehouse at a relatively higher price. We keep an amount of up to three-month to four-month inventory over the past few years, and there is a continuous replenishment for our inventory as it has been used up.

Q6. How many employees does the Group have?

As of 31 December 2019, the Group had approximately 4,300 full time employees in Hong Kong and China. The Group recognises the importance of human resources to its success, therefore qualified and experienced personnel are recruited for the improvement of production capability and the development of new biochemical products. In addition, most of our management are professionals in the industry.

Q7. Why did the Group establish the main production base in the Northeastern part of China?

The main production base is situated in Changchun of Jilin province to take the advantage of the abundant corn supply in the corn gold belt.