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SCMP Reporter

Global Bio-Chem Technology Group, a Hong Kong-registered but mainland-based corn refiner and processor, is trying to bolster earnings by modelling itself on United States counterparts.

The company is diversifying into higher value-added products with high output in a bid to better meet the demand the country's backward agricultural processing industry has failed to satisfy.

Managing director Liu Xiaoming said China's annual demand for processed and refined corn products reached five million metric tonnes, but the country could only produce 4.8 million tonnes. The shortfall had to be satisfied by imports.

The imports mainly go to foreign-invested food processing and paper-making industries in the mainland.

'The growing awareness of health and environmental protection is making processed corn products gain popularity in the global market,' Mr Liu said.

However, domestic consumption of processed corn products remained at a 'low value-added level'. Mr Liu said most domestic corn processors were making feed for poultry and cattle. The country only began using higher value-added processed corn products in the 1990s.

Basic processed corn products include feed, edible oil and corn starch. Global Bio-Chem further processes the corn into modified starch, corn sweetener and a type of amino acid used for medical purposes.

The reprocessed products can be made into biodegradable substitutes for petrochemical plastic, paper fibre and alcoholic fuel additives.

Mr Liu said US demand for corn-processed biochemical products was projected to grow by 3.4 per cent to US$3.4 billion next year. The US produces about 40 per cent of the world's corn and processes about 25 per cent of its output. China accounts for about 22 per cent of the global corn output but only processes about 5 per cent of national output.

Global Bio-Chem plans to invest 500 million yuan (about HK$468.65 million) to 600 million yuan to double last year's production capacity of 600,000 tonnes to 1.2 million tonnes in three years, as well as to strengthen product research and development and marketing.



Global Bio-Chem takes value- added tack in bid for capacity expansion