China Starch Plans Expansion to Increase Production Capacity of Corn Starch and Starch-Based Sweeteners

The proposed expansion would bring growth to the Group, provide a platform for further development and expansion of the Group’s business, increase its overall competitiveness and is in the interests of the Company and its shareholders as a whole.

20 Jan 2010 --- Further to an announcement by the comapny dated 16 December 2009, the board of directors of China Starch Holdings Limited is pleased to announce that as part of the business strategies of the Company and its subsidiaries, the Group is planning to increase its annual production capacity of cornstarch, lysine, starch-based sweeteners from the current 850,000 tonnes, 55,000 tonnes and 100,000 tonnes per annum to 1,650,000 tonnes, 105,000 tonnes and 300,000 tonnes per annum respectively in a span of approximately two years to satisfy and cater for current and future market demands.

The proposed expansion will principally involve a mix of improvements in production technologies and equipment. It is expected that the expansion will be funded by a combination of internal resources of the Group, bank borrowings and/or other financing.

The Group is one of the largest cornstarch manufacturers and suppliers in the People’s Republic of China. Apart from the production of cornstarch, the Group also manufactures other cornstarch related products including lysine, other ancillary corn-refined and corn-based products and starch-based sweeteners, all of which are principal raw materials applied in the production of a wide range of foods, soft drinks and beverages products as well as in the pharmaceutical, textile, chemical and other industries including paper, fermentation, animal feeds and agricultural fertilisers industries. With a well-established based of customers most of which are leading and major players within these industries, as well as advanced production technologies and advantageous production locations in one of the major corn growing provinces of the PRC of the Group, the Directors consider that the Group is well-positioned to benefit from the rapid and continued growth in demands for foods, soft drinks, beverages and other downstream cornstarch related products.

The Directors consider that the proposed expansion would bring growth to the Group, provide a platform for further development and expansion of the Group’s business, increase its overall competitiveness  and is in the interests of the Company and its shareholders as a whole. The Company will keep itsshareholders informed of any development and where necessary, to make appropriate announcement in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.