The meeting was held on October 19, 2008 at the office of Sao Ta Foods Joint Stock Company with presence of all members of Administration Board.  

- Chairman of the meeting : Mr. Ho Quoc Luc      - The Chairman of Administration Board

- Secretary of the meeting  : Mr. To Minh Chang - Member of  Administration Board

The meeting discusses on following issues :           


          1) Characteristics of situation :

               - The third quarter is the main harvest season of raw material. However, this year volume of shrimps is not so much because weather is unfavorable and shrimp farmers’ investment possibility is limited due to the government’s common money tightening policy. Shrimp sizes are rather uniform, shortage of very big size and smaller size shrimps, that also affects to consumption level. Vannamei shrimps have been developed for aquaculturing, but farmers haven’t been familiar so harvest volume is not so high. It is possible that farmers will be interested in faming this shrimp species in future.

- Crisis and inflation remain to affect heavily to industries of economy that makes buying force not enhance as expected and input expenses of products go up sharply. On the other hand, the harvest of farm-raised shrimps from other countries is very good that makes selling prices decrease continuously from beginning of the year till now. As a result, profit ratio decreases and the Company has to balance stock products matching to reality.

2)      Contents :

+ Operation Outcome of the third quarter of 2008 :

Processing output  :    2,700 MT equal to 123% from same period of 2007

Export volume         :    2087 MT equal to 119 % from same period of 2007

Turnover                 :    VND 335 billion equal to 116% from same period of 2007

Profit                       :     VND 3,1 billion equal to 36 % from same period of 2007

The reason why profit going down as above mentioned is the sharp increase of production expenses and the continuous decrease of selling prices due to global economic status. FMC has given medium buying price of raw material and shrimp farmers got big damages due to low selling prices of shrimps, but it can’t predict that global shrimp prices are too low.

      + Implementation of Vegetable Factory Construction Project:

          Progress of vegetable factory construction is acceptable. However, some items has been changed as per customer’s request and delivery of some equipment is delayed by the supplier, so it is expectedly that the vegetable factory will be came into operation on November 15, 2008, delayed one month from expectation. Negotiation of consumption with customers and establishment of raw material area for the factory have been developing with fairly good results. FMC has concluded contracts with Japanese customers for the first shipment of 1,050 MT of processed vegetables. However, development of dried vegetables with Korean customer is postponed since Korean customer informs that exchange rate of won fluctuates strongly. So, the program must wait untill the effectiveness of business for both parties can be reached. The development of vegetable cultivation will get more advantages when rice price is lowering. FMC will organize a seminar for good farmers on October 21, 2008.

      + Implementation of fish factory project :

                  In the meeting of the first 6 months of 2008, the Chairman has surveyed tra fish business situation in some places and found that total fish processing factories, which are existing, being completed and being constructed, are over 100 factories with capacity of 3 million MT raw fishes (three times higher than that of reality), fish products are in big stock due to slow consumption. On the other hand, global fish prices are not good in compared with produced fish price, so farmers will get big loss. Above difficulties combines with the Company having no available capital (because stocks issued last year wasn’t at good price, not achieved required surplus), difficult capital borrowing and high interest rate….., Thus the Chairman proposed to temporarily stop the project implementation until the situation becomes brighter.  The land plot in Cai Con Industry Zone will be transferred to whom having interest at original price without bank interest, if they can effect payment promptly. Whenever the chance comes, the Company will rent land plot in Dai Ngai Industry Zone and land for farming in Cu Lao Dung district. However, currently Ground Clearing and Compensating Board of Ke Sach district hasn’t completed their works, clean land is not available.  Last week, Industrial Zone Project Management Board invited FMC to transfer the land which hasn’t been cleared completely, but FMC hasn’t received the land because it can’t develop the project in a such circumstance. Therefore, the project of fish factory in Cai Con Industrial Zone is still on paper. Same as other investors, FMC has paid in advance VND 15 billion to Ground Clearing and Compensating Board, damage of bank interest is over VND 2 billion if calculating for whole year, and no one has interest to re-transfer the land at the time being.

+ Direction of year end and next year :

-         Focus on completing vegetable factory and bringing it into operation on November 15, 2008 for timely processing volume of sweet potatoes and okras which have been cultivated. If procurement for processing is not conducted timely, it will cause the loss of farmers’ trust and difficuties for investment next time.

-         Focus on consuming shrimps at year end to enhance turnover and profit for compensating to unreachable ones of the first 9 months. Nevertheless, the remaining time of the year is too short and business environment is still in difficulties, profit level of this year can’t be reached as expected.

-         Pay high attention to shrimp farming investiment to avoid the abuse from farmers who are invested by the Company and prevent creating a bad habit for other invested farmers.

-         Follow up, recover debts timely to use borrowing capital effectively.

-         Constantly take care in financial management, verify money spending, promote saving movement to decrease expenses.

-         Up-grade factory No.4 due to downgraded freezing conveyor which has been installed for 10 years. Replace the conveyor belt to increase productivity, decrease the consume of fuel, expense is about VND 3 billion. Invest additionally the item of standby cool storage for storing raw material in vegetable factory so that raw material quality doesn’t be affected  in peak harvest season.

-         Upload information timely in FMC’s website so that shareholders can catch the situation to invest securely.

All members of Administration board agree 100% of above-mentioned contents.

The meeting finished at 16:15PM of the same day and the contents are read for the members’ hearing.