Our Strategies

We intend to maintain our leading position in the biodiesel industry in China and become a major producer of quality and cost effective alternative energy products. In achieving this, we also aim to maximize shareholder value and pursue a growth strategy that includes the principal components set out below.

Increasing our production capacity and expanding strategically to additional locations in China.
We believe we established the first large-scale production facility for biodiesel in China in 2001. Currently, we have an aggregate annual biodiesel production capacity of 240,000 tons. We target to increase our annual production capacity to 400,000 tons by the end of 2008 with the expansion or addition of new production facilities in Beijing,Shanghai, Hunan and Chongqing.We believe our expansion strategy will enable us to benefit from continued growth in overall energy demand in China as well as to capture a greater market share in the relatively young biodiesel industry.

Strengthening our relationships with key customers and diversifying our customer base.

We intend to strengthen our existing relationships with key customers while further expanding our customer base. We plan to continue providing high-quality and cost-competitive products to our existing strategic locations across China. We plan to increase our sales service personal to further expand our supplier and customer base and to provide increased coverage of the biodiesel market. In addition, we plan to continue our research and development of biodiesel by-products, as well as commercial applications of such by-products, to further expand our customer base.

Focusing on production efficiency and product development.

We plan to continue to enhance the efficiency of our biodiesel production processes through additional investment in our in-house research and development capabilities. We intend to continue improving our production technology to enhance our leadership position in the PRC biodiesel industry. We have established a centralized research and development center to further strengthen our research abilities and develop new products as well as to develop more efficient and lower cost manufacturing processes. In addition, we continue to research the commercial applications of other by-products generated during biodiesel production.

Enhancing marketing efforts
We plan to increase our marketing and branding activities for our biodiesel and other products as well as to increase public awareness of biodiesel as an environmentally friendly alternative to petroleum-base fuels. We intend these marketing efforts to leverage our strong relationships with existing customers, which we believe will give us the ability to market our biodiesel and other products to prospective customers more effectively. We believe our plans to expand our sales and marketing network will provide a key advantage as we expand our geographic presence across China.

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