Outlook

What is your current market share and how much do you think you can expand?

Although Asian Bamboo is the largest company in the industry, our plantations only cover around 3% of all bamboo resources in Fujian Province. Therefore, we believe that there are plenty of opportunities for us to expand the size of our plantations.

As regards to the demand side, we believe that demand will rise at least in line with supply. For bamboo trees, the low cost, strength and beauty of bamboo in combination with consumer preferences for renewable resources have led to the increased use of bamboo, particularly as a hardwood substitute. Key areas of growth include flooring, panels and nontraditional furniture. We believe these products, together with pulp and paper and textiles, represent the largest growth opportunities for bamboo. In addition, increasing restrictions on certified hardwood supply create a positive market outlook for bamboo.

For bamboo shoots, the wealth effect and China’s improved infrastructure have led to broader and deeper distribution and increased consumption of bamboo shoots, particularly in areas where they have traditionally not been available.

We expect the total size of our plantations to reach at least 40,000 ha by the end of 2010. Longer term, it is our goal to reach a total plantation size of at least 70,000 ha.


What’s the Chinese government’s attitude towards the bamboo industry?

The central government is concerned with protecting natural resources, improving the ecological balance, boosting economic development in rural areas and increasing farmers’ incomes. Therefore, the government at various levels is supportive of the agriculture industry in general and the bamboo industry in particular through tax incentives and favourable policies.


How important is Mr. Lin to the Company?

Is the founder of the business, Mr. Lin has played a key role in developing the business and he remains heavily involved with the company. As the Company is growing, we are adding professionals to widen the management team and to add specific expertise. Mr. Lin’s focus is on developing an overall strategic direction for the Company and to oversee the operations, whereas most of the day-to-day activities are carried out by other members of the management team.

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