Exceptional Corporate Strengths

Well located plantations with high quality produce and inherent growth potential

The Group's existing plantations, as well as the potential third plantation, are located in areas of the PRC that enjoy a significant amount of sunshine, good levels of rainfall and long frost-free periods each year. The sites of the Group's existing plantations historically have not suffered unusually strong storms or similarly adverse weather conditions.

In addition, the Directors believe that due to the benefits of investment, the US varieties of species used and expert plantation management, the Group's produce is of a higher quality than the majority of oranges produced in the PRC, enabling the Group to maintain higher prices and benefit from stronger demand.

The Group also benefits from inherent growth potential as infant trees at its plantations start to produce fruit and as trees aged between four and ten years increase their production yields.

Over the medium term, the Directors expect production volume to increase as the trees at the Xinfeng Plantation mature.

Strong expected growth in demand for the Group's oranges

The Directors believe that demand for high quality oranges in the PRC currently exceeds supply and that this can be attributed in large part to the significant increases in per capita GDP in the PRC in recent years. The Ministry of Agriculture estimated in 2004 that the PRC's per capita consumption of citrus fruit was then approximately 9 kg per year. The PRC Government forecasts that annual consumption will reach 11.7 kg and 16 kg per person in 2015 and 2030 respectively, based on current consumption trends and growth in consumer purchasing ability.

Consumption in most Southeast Asian nations is similarly low, providing the potential for a period of rapid growth as regional trade barriers are lowered and the expected increases in disposable income across the region materialise.

Significant barriers to entry to new entrants

The Group has spent many years and invested significant capital to acquire its land, develop its plantations and grow its business. A new entrant would require access to a sizeable tract of land in a location suitable for citrus cultivation, which would likely involve lengthy negotiations with numerouslocal government agencies and tenants to secure the leases and land use rights needed to operate a plantation. Moreover, even if a new entrant managed to secure sufficient land suitable for citrus cultivation, the development of a plantation would be a long and expensive process. Finally, after any plantation had been developed and orange tree saplings had been planted, at least a further four years would be required before the trees began producing marketable fruit on a commercial scale. Accordingly, for the above reasons, significant time and capital resources are required to acquire the requisite land agreements and rights and support plantation development through to profitability. The Directors believe that the Group's size and success cannot be easily replicated by potential competitors in the PRC.

Scale advantage over local competitors

The PRC orange market currently is highly fragmented. To the Directors' knowledge, the Group is several times larger than its next closest domestic competitor in terms of both land area under cultivation and production volume. The Directors believe this scale provides the Group with numerous competitive advantages, including the resources to ensure high quality produce and a better ability to provide a secure and reliable supply of oranges to large customers. In addition, the Directors believe that the Group's scale and increasingly nationwide exposure will also support the development of a national brand and yield inherent sales and marketing advantages.

Pricing and cost advantage over imports

The Directors believe that demand for high quality oranges (in particular, US varieties) exceeds supply in the PRC by a considerable margin. At present, the Group prices its products between the cheaper indigenous orange species and the more expensive imported brands. Producers of oranges outside the PRC generally have higher costs than the Group, resulting principally from a disparity in labour costs, transportation costs and taxes.

To protect their orange trees from damage and to help ensure higher quality produce, orange producers, including the Group, generally harvest their oranges by hand. As a consequence, orange plantations require access to large pools of agricultural labour. The amounts paid for labour by plantations is generally lower in the PRC than in more developed countries, where equivalent labour costs are higher.

In addition, because of the significant distance of the PRC from the other major orange producers, the costs that must be incurred to import oranges from the United States, Central and South America and Europe are high, thus placing the Group in a strong competitive position in comparison with importers of similar oranges into the PRC.

Finally, imports to the PRC currently are subject to both a tariff of 11 per cent and VAT of 13 per cent, neither of which, the Group incurs, thus providing it with a further pricing advantage.

The Directors believe that its lower costs provide the Group with a competitive advantage over importers of oranges to the PRC and, potentially, over non-PRC based producers in the worldwide orange market.

Experienced management

The Company's management has proven knowledge and expertise in the agricultural industry. Certain members of senior management have worked for the US fruit juice company which previously operated the Hepu Plantation and have also gained valuable relevant experience in Florida. In addition, given the experience gained at both of the Group's plantations, the Directors believe that the Group's management has the experience and local knowledge necessary for the successful development of the Hunan Plantation.