The company said in a statement it would buy the food and beverage business and agri-industrial business from controlling shareholder COFCO (Hong Kong) Ltd, a unit of State-owned China National Cereals, Oils & Foodstuffs Corp. Analysts said the transfer of assets could improve its earnings.

Once the reorganization is complete, COFCO International will be principally involved in the beverage business, including bottling and distributing Coca-Cola; the wine business, involving the production and sale of red and white wines under the Greatwall, Huaxia and Shaoxing brands; the chocolate business under the brand Le Conte, as well as its core consumer edible-oil business.

Its parent China National Cereals, Oils & Foodstuffs Corp said it will invest more than $1 billion in ethanol projects in line with the nation's plan to develop clean energy.

In the next three to five years the company will spend 10 billion yuan in the ethanol sector to increase the production capacity to 3 million tons, Yue Guojun, general manager of the company's bio-chemical and bio-energy division told China Daily earlier.

As a new business, the company will attach great importance to the development of bio-energy in the future, said its president Ning Gaoning.

Last November it bought a 20.74 percent stake in Fengyuan Biochemistry Company. The Fengyuan project, with a 440,000-ton-per-year production capacity, is its sixth ethanol base.

It also began construction of a cassava ethanol plant in South China's Guangxi Zhuang Autonomous Region, which has an annual production capacity of 400,000 tons.

The plant will be one of the world's biggest fuel ethanol plants using cassava root, and will require a total investment of 1.46 billion yuan.

(China Daily 02/27/2007 page14)

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