We believe that we have the following competitive strengths:-

1. We are an integrated producer of potato starch and potato starch-based products
   
   Our ability to produce our own potato starch, being the principal raw material for the production of our potato starch-based products and by-products, allows us to more efficiently control both the costs and the quality of our products. Furthermore, as an integrated producer, we are able to control production schedules more precisely and to better manage inventory.
   
   We have a diversified product base and are in a more advantageous position than other producers in the PRC which only produce potato starch or potato starch-based products. The diversification of products and product types also enables us to reduce the risk of over-reliance on a particular product or product type.
   
   
   
2. We place strong emphasis on R&D
   
   To stay ahead of our competitors in the business of the production of our products, we need to possess the relevant expertise and in-depth knowledge to keep abreast of the latest changes in the industry, in addition to the latest trends in consumer preferences. As such, our management places strong emphasis on our R&D activities.
   
   We have set up two R&D divisions to carry out R&D activities for the cultivation of imported species of potatoes, development of new potato starch-based products and the improvement of our production technologies. Our R&D department is headed by our Executive Officer, Mr Wu Guolin, who has more than 40 years' experience in the R&D of new species of potatoes and new cultivation technologies.
   
   To tap into the expertise of external professionals and experts, we hold technical collaborations with a university and R&D institutes, namely HLJ August First Land Reclamation University, The Vegetable Research Centre of Beijing’s Forestry and Science Institute and the Potato Research Office of the Agricultural Science Institute of the Heilongjiang Province, to jointly conduct research on the various projects in relation to the R&D of potatoes.
   
   We have successfully cultivated imported species of potatoes with a higher level of starch content and a shorter maturity period resulting in the higher quality of our potato starch and our potato starch-based products. With our R&D capabilities, our Directors believe that we will be able to further enhance our competitiveness by improving our cultivation and production technologies and introducing new potato starch-based products and new potato starch products.
   
   
   
3. We have large-scale production capabilities which allow us to benefit from economies of scale
   
   
   We have made significant investments in advanced equipment and machinery. For instance, the major parts of our potato starch production lines were imported from Holland.
   
   Our Directors believe that our production scale allows us to achieve considerable economies of scale and the unit cost of our products may be lower compared to our competitors with smaller production scales. As such, we believe that we are able to offer more competitive prices to our customers.
   
   
   
4. We have strong brand equity
   
   We are committed to delivering quality potato starch and potato starch-based products and by-products to our customers. We utilise advanced facilities and machinery obtained from overseas in the production of our products. In addition, we have implemented stringent quality control procedures, from the procurement of raw materials to the delivery of our finished products, to ensure that all our food products are of a high quality.
   
   We are recognised for our production of potato starch, and have achieved a number of awards and certifications. Our products are marketed under our own brand names of "碧港", "东北" and "水牛". Through our marketing initiatives, we believe that we have also built up a strong brand name domestically for our potato starch and potato starch-based products.
   
   We believe that our reputation as a producer of quality products and the brand equity which we have built up over the years enable us to maintain our competitive edge over our competitors.
   
   
   
5. Our production facilities are strategically located
   
   We believe that one of our competitive strengths lies in the location of our production facilities. Our production facilities are located in Heilongjiang, and Inner Mongolia, which is situated in the north-eastern part of PRC, and the potatoes that we use are obtained from the local farmers in the surrounding areas. The climate and soil in Daqing, Heilongjiang, PRC are suitable for the growing of potatoes.
   
   Our proximity to our sources of raw materials helps us to minimise our transportation costs for the delivery of our raw materials and further ensures the freshness of our raw materials.
   
   
   
6. We have an experienced management team
   
   We have an experienced management team who is familiar with our business and understands our customers’ needs and requirements. We are led by our Executive Chairman and CEO, Mr Zhao Libin, who more than 13 years of experience in the food industry. Mr Zhao is assisted by the members of our management team who are experienced in the food industry.