10:05     COFCO INTL<00506> - Announcement (2)                                

    On 28 February, 2005, the JV Co. was approved by the PRC Approval         
    Authority to increase its registered capital and total                    
    investment by US$9,600,000 (equivalent to approximately                   
    HK$74,880,000) and amend its Articles accordingly, with                   
    Bestfield contributing an amount of US$ 6,720,000 (equivalent             
    to approximately HK$52,416,000) in cash, and ADM China                    
    contributing an amount of US$2,880,000 (equivalent to                     
    approximately HK$22,464,000) in cash, in proportion to their              
    existing interests in the JV Co. Bestfield made its additional            
    contribution on 28 February, 2005. The JV Co. will use the                
    additional capital to finance the construction of cotton seeds            
    husking and delinting and refining facilities and further                 
    financing the construction of a peanut oil factory and the                
    auxiliary project of the peanut oil factory.                              
                                                                              
    The amount of the total investment of the JV Co. has been                 
    increased to US$25,600,000 (equivalent to approximately                   
    HK$199,680,000) from US$16,000,000, and the amount of the                 
    registered capital has been increased to US$22,400,000                    
    (equivalent to approximately HK$174,720,000) from                         
    US$12,800,000. The aggregate amount of financial commitments              
    assumed by Bestfield in relation to the JV Co. has been increased         
    to US$17,920,000 (equivalent to approximately HK$139,776,000)             
    from US$11,200,000. The additional contribution was funded                
    through internal resources of the Group.                                  
                                                                              
    The pro-rata ratios represented by the equity interests held              
    by Bestfield and ADM China in the JV Co. shall remain at 70%              
    and 30% respectively. The profit sharing ratio between the                
    parties and the number of directors appointed by each of the              
    parties to the board of directors of the JV Co. and other terms           
    of the Articles of the JV Co. remain unchanged.                           
                                                                              
    REASONS FOR THE INCREASE OF CAPITAL                                       
                                                                              
    The Group is principally engaged in food processing and related           
    businesses including the production of edible oils through its            
    subsidiaries and associated companies in the PRC, including the           
    JV Co., a non wholly-owned subsidiary of the Company. ADM China           
    is a wholly-owned subsidiary of ADM, an international                     
    agricultural processing company based in the United States of             
    States and a major producer of edible oils.                               
                                                                              
    In view of the high profit margin of edible oils and market               
    potential, the directors of the Company (including independent            
    non-executive directors) consider that the terms are fair and             
    reasonable and the increase of investment in the JV Co. will              
    enable the Group to further expand in this market segment and             
    strengthen its position as one of the leading edible oils                 
    producers in the PRC, therefore it is in the interests of the             
    Company and its shareholders as a whole.                                  
                                                                              
    Each of the directors, including the independent non-executive            
    directors of the Company, confirms that he does not have any              
    material interest in the connected transaction.                           
                                                                              
    INFORMATION ON THE COMPANY                                                
                                                                              
    The Company is an investment holding company. Through its                 
    subsidiaries and associated companies, it is principally engaged          
    in food processing and related businesses which include edible            
    oils, soyabean meal and related products; wineries;                       
    confectionery; trading and flour milling.                                 
                                                                              
    INFORMATION ON THE JV CO. AND BESTFIELD AND ADM CHINA                     
                                                                              
    The JV Co. was established on 12 June, 2003 as a wholly                   
    foreign-owned company with a term of 50 years in Heze,