3.  PRODUCTS AND SERVICES

At present, TCCC is Thailand's largest producer of compound chemical
fertilizers. The company operates 2 large and international-standard
plants, located at Amphoe Phra Samut Chedi, Samut Prakan province, with
total annual capacity of 850,000 metric tons, and at Nakhon Luang, Phra
Nakhon Si Ayutthaya province, with total annual capacity of 350,000
metric tons, having the combined total capacity of 1.2 million metric
tons a year. TCCC manufacturing plants are capable of producing chemical
fertilizers of same standard quality as imports. The chemical
fertilizers produced consists of basic chemical nutrients being Nitrogen
(N), Phosphate (P2O5), Potassium (K2O) and secondary nutrients such as
magnesium (MgO), Sulphur (S) and other supplementary nutrients such as
Boron (B) which promote healthy growth of crops, both in quantity and
quality. Chemical fertilizers produced by TCCC have been granted the
Certificate of Industrial Standards (TIS 75-2527) by the Thai Industrial
Standard Institute, Ministry of Industry, and TCCC’s “OX” brand products
are very popular amongst farmers throughout the country.

In addition, the factory complex at Samut Prakan province has a storage
capacity of 120,000 metric tons, with the wharf facility features a 310
metres long jetty, a spacious channel with a draft of 27 feet (9 meter
depth) which can simultaneously accommodate two 20,000-25,000 DWT ocean
going vessels, and unloading equipment to offtake as much as 6,000
metric tons of raw materials per weather working day.

(1) PRODUCT CHARACTER OR PRINCIPAL SERVICE

The character of the products is chemical fertilizer for agricultural
use by farmers in increasing the productivity in crops like paddy,
upland crops, fruit tree, vegetables and flowers, and plant protection
products to control and to protect crops from insects and diseases. The
chemical fertilizer is normally packed in 50 kilograms plastic woven bag
bearing “OX” brand. Most of the chemical fertilizers contain 3 major
primary plant nutrients, namely Nitrogen (N), Phosphorus (P₂O₅), and
Potassium (K₂O), and some grades contain secondary plant nutrients such
as Magnesium (MgO) for certain crops.

+-----+-----------+---+-----------------------------------------------+
|     | Crops     | F |                                               |
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+-----+-----------+---+-----------------------------------------------+
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+-----+-----------+---+-----------------------------------------------+
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+-----+-----------+---+-----------------------------------------------+
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+-----+-----------+---+-----------------------------------------------+
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+-----+-----------+---+-----------------------------------------------+
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+-----+-----------+---+-----------------------------------------------+
|     | J         | - |                                               |
|     | ute/Kenaf | 1 |                                               |
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+-----+-----------+---+-----------------------------------------------+
| Veg |           |   | -   13-13-21, 15-15-15, 20-10-10, 12-24-12,   |
| eta |           |   |     9-24-24                                   |
| ble |           |   |                                               |
| and |           |   | -   12-12-17+2 MgO, 16-11-14, 16-16-16,       |
| Fr  |           |   |     8-24-24, 25-7-7                           |
| uit |           |   |                                               |
| Tr  |           |   |                                               |
| ees |           |   |                                               |
+-----+-----------+---+-----------------------------------------------+

Apart from producing and marketing chemical fertilizer, TCCC also handle
crop protection products (agro-chemicals) for farmers to control and
protect pest and diseases. Product ranges include insecticides,
herbicides, fungicides and hormone & plant regulators.

Principal Services are to disseminate agricultural knowledge on the
correct usage of chemical fertilizers and agro-chemical products to the
farmers, aiming at educating farmers to help preserve the environment
from the use of chemical fertilizer and agro-chemical products.

BOI Promotion Certificate

TCCC has been granted promotional certificate from the Board of
Investment (BOI) since its inception, and lately on August 9, 1996,
obtained promotional privileges to produce chemical fertilizer at an
annual rate of 350,000 metric tons at the new location in Amphoe Nakhon
Luang, Phra Nakhon Si Ayutthaya province, which is TCCC's second
fertilizer plant.

BOI has granted rights and benefits under the Investment Promotion Act
B.E. 2520 as amended by the Investment Promotion Act (No. 2) B.E. 2534
under the Activity Type of 6.4 Manufacture of Fertilizers for this
second plants -- whereas the rights and benefits under the Investment
Promotion Act B.E. 2520 for the first plant expired -- as follows:

1. Under Section 25, granted permission to bring into the Kingdom
foreign nationals who are skilled workers, experts and their spouses and
dependents of the said persons in such number and for such periods of
time as the Board may deem appropriate.

2. Under Section 26, granted foreign nationals who are skilled workers
or experts who are permitted to stay in the Kingdom under Section 25 to
obtain work permit for a specific position approved by the Board for the
period of permitted stay in the Kingdom.

3. Under Section 29, granted a reduction of one-half of the rate of
import duties for machinery which is not in the list of reduction of
import duties under the Notification of the Ministry of Finance No. Saw.
Kaw. 13/2533, except the items of machinery which has import duties less
than 10% will not be reduced.

4. Under Section 31, granted exemption of juristic person income tax on
the net profit derived from the promoted activity for a period of 3
years from the date income is first derived from such activity.

The income on which the computation of the net profit derived from the
activity referred to under paragraph one is to be based shall include
income from the sale of by-products such as waste or disposal from the
production process.

In the case where the loss has been incurred during the period receiving
exemption of juristic person income tax under paragraph one, the
promoted person shall be granted permission to deduct such annual loss
from the net profits accrued after the expiration of the period of
exemption of juristic person income tax for a period of not more than 5
years from the expiry date of such period, and he may choose to deduct
from the net profits of any one year or several years.

5. Under Section 34, granted exemption in not having to bring dividends
derived from a promoted activity of which juristic person income tax has
been exempted from computation of taxable income throughout the period
the promoted person receives the exemption of juristic person income
tax.

6. Under Section 37, granted permission to take out or remit abroad
money in foreign currency.

In utilizing the rights and benefits, the promoted persons must comply
with the conditions relating to the rights and benefits so received and
other conditions as follows:

1. will not use or consent the foreign nationals who are skilled workers
or experts, to whom the promoted person has been allowed to bring into
the Kingdom for such promoted activity, to work or act in other duties
beyond the scope of position which has been approved by the Board,
except with the approval of the Board; and must inform the Office of the
Board of Investment (OBOI) within 15 days from the date when any skilled
workers or experts are retired from such position.

2. machinery in the promoted activity must be of modern and efficient
machinery, except having the special reason and approved by the Board,
and

2.1 machinery which has obtained reduction of import duties, must be
imported within 24 months from the date the Promotion Certificate
issued, if cannot be imported within the specified period the approval
for extension of importation time must be obtained from the Board.

In case when the machinery has been imported before the project is
approved, must submit for permission to import the machinery within 6
months from the date the Promotional Certificate issued, and giving
reason necessitating the importation of the machinery before the project
is approved.

2.2 must submit the machinery list required for reduction of import
duties in the forms, method and conditions as laid down by the OBOI to
OBOI for approval within 1 year from the expiration of the importation
time as mentioned under 2.1, beyond such 1 year period, the Board will
revoke the rights and benefits in the reduction of importation duties
for such machinery which is imported and is under the period of using
the bank guarantee to warrant the import duties.

2.3 must use the machinery approved by the Board in the reduction of
imported duties only in the promoted activity, except with the prior
approval of the Board.

2.4 must not mortgage, sell, transfer, lease or allow other persons to
use the machinery on which the reduction of import duties is granted,
except with the prior approval of the Board.

3. must start to undertake, i.e. to start the work of construction of
the factory, and to start the purchase of machinery within 6 months from
the date the Promotion Certificate issued; and when such implementation
has been started, report with evidence must be reported to the OBOI.

4. must undertake to complete ready to start operation within the period
of not less than 30 months from the date the Promotion Certificate
issued.

5. before starting operation, the company must inform in writing to the
OBOI in advance not less than 15 days for inspection before operation.

6. when operation has been started, the company must report the
operation of the project and the implementation to the OBOI as follows:

6.1 the change of shareholder ratio between the Thai nationals and
foreign shareholders and the changes in shareholding of foreign
nationals every time;

6.2 must report the financial status and the operation report in the
form prescribed by the OBOI annually within June 30 in the following
year.

6.3 The company must report to the OBOI the training of Thai nationals
by the foreign skilled workers or experts who has been imported under
the law on investment promotional in the form and conditions prescribed
by the OBOI.

6.4 other matters from time to time in the form and period as prescribed
by the OBOI.

7. must arrange to have and use the protection and control system to
prevent damages and losses to the environment or endanger or disturb the
neighboring residents with the approval of the Ministry of Industry or
other government units concerned.

8. must continually comply with all the laws on safety including other
relevant safety measures

9. the stoppage of operation within the period of more than 2 months
must obtain permission in writing from the OBOI.

10. must provide convenience and facilities to the officers for
inspection.

11. must have the registered capital of not less than 2,000 million
Baht, having not less than 1,200 million Baht paid up before the
Promotion Certificate issued.

12. Thai nationals must hold shares not less than 51% of the registered
capital.

13. must undertake the promoted project as follows:

13.1 Type of products: Mixed Chemical Fertilizer NPK

13.2 Size of Activity:

having the production capacity of

Mixed Chemical Fertilizer NPK

approximately 360,000 tons a year

(working hours 24 hours/day: 365 days/year)

By product such as waste or disposal from the production process can be
recycle use.

13.3 Production process is in accordance with the proposed project and
approved by the Board.

13.4 must accelerate to train and to support the Thai personnel to be
able to undertake the promoted project to substitute the foreign skilled
workers or experts within the time period as prescribed by the Board.

13.5 must have the size of investment, excluding the cost of land and
working capital not less than 1 million Baht, if the size of investment,
excluding the cost of land and working capital less than 1 million Baht,
the rights and benefits will be revoked.

14. must arrange to have the balance sheet of the promoted activity,
separating from other activity, regardless of whether or not having been
promoted, for the benefit of calculation of the net profit which will be
exempted from the juristic person income tax under Section 31.

15. The quality of the products to be produced or assembled must conform
in accordance with the international standards, if there is any
announcement designating the standards under the law on industrial
standards products, just undertake to obtain licence showing the
standards mark from the Industrial Standards Products Committee.

16. The factory must be located in the area of Phra Nakhon Si Ayutthaya
and the factory location must not be in the restricted area as per the
announcement of town planning of the province and must obtain permission
from the Ministry of Industry or other government units concerned.
Within the period of 15 years from the date of operation, the removal of
factory will not be allowed unless permission is granted by the Board.

17. must inform the removal of domicile of the promoted person to OBOI,
accompanying with the Company Registration Certificate issued by the
Commerce Ministry, otherwise the domicile of the last notice is be
adhered to, and it is deemed that have received all documents,
notifications and other announcement that mailed by OBOI.

18 must obtain consent from the Ministry of Industry on environment
within 6 months from the date the Promotion Certificate issued..

(2) MARKETING

Chemical fertilizer is selling in both cash and credit. Selling prices
in cash will be cheaper than buying on credit. As most of the customers
are in the provincial area, remittance of draft or money transfer with 7
days will also be regarded as cash sales. Selling credit term will rely
on many factors such as competition, seasonal climatic conditions and
fertilizer grades. Since fertilizer is classified under seasonal
products, peak selling period will be in the rainy season, season is one
of the important factors in setting up marketing plan for the company.

(1) Marketing Strategies

Under the marketing principles:

  PRODUCT: The company emphasizes on manufacturing and importing good
  quality products that are well accepted by the farmers and help
  farmers boost up production and income.

  PRICE: The company has set the policy to sell quality products at
  optimal cost in order to help farmers reduced cost of productions and
  able to compete in the world market.

  PLACE: The company provides distribution channel through out the
  country by appointing sales representative and agent to facilitates
  the customer.

  PROMOTION: Sales promotion has been continuously enforced to increase
  the sales volume and to maintain product’s brand-name to be well
  recognized by customers. The sales promotion at various levels of
  customers includes:

- TV commercial and mass media

- Raffle at various level of customers

- Regular Dealers’ meeting and farmers’ meeting

- Advertising posters and banners

- Coordinating in Technical Meeting/Symposium

  PACKAGING : The company emphasizes on developing strong and attractive
  packaging designed to match with farmers demand and to resist rough
  handling during transportation.

(2) Marketing and Distribution Channels

Pricing and distributing process

Fertilizers are mainly delivered to the customers and farmers by
10-wheel trucks as contracted by the customers themselves to pick up the
fertilizers at the quantity as stipulated in each Delivery Order (D/O)
from the company’s warehouses. Price quotation is quoted by metric ton.
One metric ton will consist of 20 sacks and each sack contained 50
kilograms of fertilizers. The payment methods can be both cash and
credit. With cash payment, customers can obtained lower price than
credit payment. Cash method may include immediate transfer of cash to
the company or make payment within 7- 15 days while selling on credit
the company normally give credit terms 30-45 days. However, some type of
fertilizers may subject to different credit-term depending on season and
market condition.

Selling prices of fertilizers have to be approved by the Ministry of
Commerce under the law on commodity price and service B.E. 2542, which
abolished the law on commodity and anti-profiteering. In addition,
although the company set up standard price, it is not applied for every
region. Selling agent may not sell products at equal price depending on
the marketing condition and the degree of competition in each region.
For region that the company has less market share and price is the
important factor to increase sales volume, price will be lower than
other region.

(3) Distribution Channels

The company has selling agents in every province amounting to around 505
stores throughout the country excluding small retailers who normally
bought products from the company’s selling agent instead of buying
directly from the company, an large manufacturers. The appointment of
distributors will be considered under the following criteria:

  1. No distributor has been appointed in such area or otherwise the
  existing

distributor does not perform well in expanding the outlet.

  2. Marketing area of the distributors must not duplicate each other.

  3. The distributors must have the fair financial status covering the
  business

  volume.

  4. The distributors must not be involved with illegal activities.

  5. Business in the first year must be in cash basis, or having to
  submit Bank

Guarantee for credit terms which has to be approved by the Board.

Distribution Flow Chart:

  (4) TYPE OF CUSTOMERS

  Type of customers and relationship

Customers are mainly local traders undertaking business on any one type
of the following businesses:

+-----------------------+------------------------+---------------------+
| Business Operations   | Agricultural           | Government Entity   |
|                       | Institutions           |                     |
+-----------------------+------------------------+---------------------+
| 1. Chemical           | 1. Agricultural        | 1.  Ministry of     |
| fertilizer and        | Cooperatives           |     Agriculture and |
| agro-chemicals        |                        |     cooperation     |
+-----------------------+------------------------+---------------------+
| 2. Chemical           | 2. Farmers Groups      |                     |
| fertilizer            |                        |                     |
+-----------------------+------------------------+---------------------+
| 3. Construction       | 3. Various Paddy       |                     |
| materials             | Farming Groups         |                     |
+-----------------------+------------------------+---------------------+
| 4. Miscellaneous      |                        |                     |
| goods retailers       |                        |                     |
+-----------------------+------------------------+---------------------+
| 5. Drug store         |                        |                     |
+-----------------------+------------------------+---------------------+
| 6. Agricultural       |                        |                     |
| produce trading       |                        |                     |
+-----------------------+------------------------+---------------------+
| 7. Rice mill operator |                        |                     |
+-----------------------+------------------------+---------------------+

(5) Structure of Revenue from Sales During the Past 3 Years

+-------------------+------+----+------+----+------+----+------+----+
|                   | 2000 |    | 1999 |    | 1998 |    | 1997 |    |
+-------------------+------+----+------+----+------+----+------+----+
|                   | Mil  | %  | Mil  | %  | Mil  | %  | Mil  | %  |
|                   | lion |    | lion |    | lion |    | lion |    |
|                   |      |    | Baht |    | Baht |    | Baht |    |
|                   | Baht |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Revenue           |      |    |      |    |      |    |      |    |
|  from Local Sales |      |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Chemical          | 6,13 | 9  | 6,56 | 9  | 9,37 | 9  | 7,22 | 9  |
| Fertilizers       | 7.60 | 6. | 0.41 | 5. | 5.32 | 5. | 8.66 | 6. |
|                   |      | 61 |      | 31 |      | 69 |      | 22 |
+-------------------+------+----+------+----+------+----+------+----+
| Agro-Chemicals    | 20   | 3. | 22   | 3. | 25   | 2. | 25   | 3. |
| Products          | 3.21 | 20 | 0.05 | 20 | 5.02 | 60 | 6.18 | 41 |
+-------------------+------+----+------+----+------+----+------+----+
| Total Revenue     | 6,30 | 9  | 6,78 | 9  | 9,63 | 9  | 7,48 | 9  |
|  from Local Sales | 4.81 | 9. | 0.46 | 8. | 0.34 | 8. | 4.84 | 9. |
|                   |      | 81 |      | 51 |      | 29 |      | 63 |
+-------------------+------+----+------+----+------+----+------+----+
| Re                |      |    |      |    |      |    |      |    |
| venue from Export |      |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Chemical          | 1    | 0. | 10   | 1. | 16   | 1. | 2    | 0. |
| Fertilizers       | 2.38 | 19 | 2.49 | 49 | 7.55 | 71 | 7.64 | 37 |
+-------------------+------+----+------+----+------+----+------+----+
| Agro-Chemicals    | 0    | 0  | 0    | -  | 0.15 | 0. | 0    | -  |
| Products          |      |    |      |    |      | 00 |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Total Revenue     | 1    | 0. | 10   | 1. | 1    | 1. | 2    | 0. |
| from Export       | 2.38 | 19 | 2.49 | 49 | 67.7 | 71 | 7.64 | 37 |
+-------------------+------+----+------+----+------+----+------+----+
| Revenues from     |      |    |      |    |      |    |      |    |
| Local Sales       |      |    |      |    |      |    |      |    |
|                   |      |    |      |    |      |    |      |    |
| and Export        |      |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Chemical          | 6,14 | 9  | 6,66 | 9  | 9,54 | 9  | 7,25 | 9  |
| Fertilizers       | 9.98 | 6. | 2.90 | 6. | 2.87 | 7. | 6.30 | 6. |
|                   |      | 80 |      | 80 |      | 40 |      | 59 |
+-------------------+------+----+------+----+------+----+------+----+
| gro-Chemicals     | 20   | 3. | 22   | 3. | 25   | 2. | 25   | 3. |
| Products          | 3.21 | 20 | 0.05 | 20 | 5.17 | 60 | 6.18 | 41 |
+-------------------+------+----+------+----+------+----+------+----+
| Total Revenue     | 6,35 | 10 | 6,88 | 10 | 9,79 | 10 | 7,51 | 10 |
| from Local Sales  | 3.19 | 0. | 2.95 | 0. | 8.04 | 0. | 2.48 | 0. |
|                   |      | 00 |      | 00 |      | 00 |      | 00 |
| And Export        |      |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
|                   |      |    |      |    |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+
| Growth Rate from  |      | (7 |      | (  |      | 3  |      | (8 |
| Sales (%)         |      | .7 |      | 29 |      | 0. |      | .4 |
|                   |      | 0) |      | .7 |      | 42 |      | 6) |
|                   |      |    |      | 5) |      |    |      |    |
+-------------------+------+----+------+----+------+----+------+----+

8.  

9.  INDUSTRY AND COMPETITION SITUATION

10. 

Chemical fertilizer industry is continuously playing an important role
to the Thai economy, since most of the populations are farmers. Due to
the long used of land for cultivation purpose, most of the lands are
lacked of necessary nutrients to promote healthy plant and increase
productivity. The chemical fertilizer is the alternative that help
farmers to restore healthy land. Thus; it is expected that the chemical
fertilizer will be more widely used to obtain higher yield and raise
additional income.

Most of the raw materials used in chemical fertilizer industry have to
be imported such as production machinery and fertilizer raw materials.
Prices of local fertilizer mainly rely on the prices of imported raw
materials, which depend on prices of crude oil and foreign currency
exchange rates.

In addition, chemical fertilizer is known to be the seasonal product.
Agriculture in Thailand is heavily depended on rainfalls, particularly
sufficient rainfalls during the rainy season will help farmers obtain
the optimum yields. In addition to risk from change in season, risks in
fertilizer business are derived mainly from prices of imported raw
materials, which have to be purchased before the planting season.

The keys success factor for the players are to have accumulated
experiences in business for a long time in order to determine the
correct trend of the industry in the world market including price of raw
materials, and finished chemical fertilizers in the world market. In
addition the producers should have expertise in manufacturing process to
minimize cost of production while having adequate marketing information
to launch product and set quotations effectively and could be
tailor-made to fit each region. Nevertheless, the producers should have
continuously improved product quality, packaging, and distribution
channel to facilitate the farmers to be able to access to the company’s
product when required.

  (1) Size, Growth Trend and Industry Development

Under the present available plantation area for agriculture, the
fertilizer requirement should be around 6 million tons a year. However,
the current annual fertilizer consumption of only 3 million tons which
is not adequate to serve the expansion of the industry.

(2) Competition Situation

Number and Size of Competitors

At present, there are 3 large chemical fertilizer factories in Thailand,
having the combined total capacity of about 3.2 million tons, comprising
Thai Central Chemical Public Company Limited (1.2 million tons
capacity), National Fertilizer Public Company Limited (1 million tons
capacity, located at Map Ta Phut, Rayong province) and Thai Fertilizer
Co., Ltd. (1 million tons capacity). Other smaller players include Siam
Cargill with the total capacity of 500,000 ton per year, Rojkasikij
Fertilizer with the capacity of 500,000 ton per year, and others company
with combined capacity of 193,000 ton per year. Thus; the overall
capacity of the industry is around 4 million tons per year.

  Market Share

According to market survey, currently TCCC maintained the market share
of about 35% of total market share, the balance of 65% mainly shared by
3-4 companies.

Competition Status of the Company

The industry witnessed high competition arose from the importers of
finished fertilizer products who tried to maintain and capture more
market shares. All fertilizer companies competed aggressively to keep
pace with the industry in order to match demand with its current
production capability. Therefore, new entrant must have large amount of
capital to enter the business since the trend of the industry is in the
same direction as consumer products

  Opportunities for the Newcomers

Under the present economic and financial situation, it may not be
feasible for the new entrant in establishing the fertilizer factory,
which involves the projected investment of not less than 1,000 million
Baht. Accordingly, business of importer of finished products also
required the large capital investment while facing with the marketing
problem particularly sales and collection. Accordingly, there expected
to have only a few newcomers to enter the business.

Substitute Products

The substitute products of chemical fertilizer will be composted of
natural fertilizer which have many disadvantages such as low plant
nutrients and considered as a bulky product.

Bargaining Power of Buyer and Seller

Under the present keen competition, farmers have more bargaining power
to select fertilizer at the cheaper price from various companies.

(3) PRODUCTION AND PRODUCT PROCUREMENT

Thai Central Chemical Public Company Limited have set up 2 chemical
fertilizer plants which are located at:

1^(st) Plant: 284, Kilometer 17.5^(th), Suksawad Road,

Tambon Pakklong Bang Plakod,

  Amphoe Phra Samut Chedi, Samut Prakan Province 10290

Telephone: 816 1268-77, 463 5572-6, 462 5904

Fax: 816 1276, 463 3713

2^(nd) Plant: 50 Mu 5, Nakhon Luang-Phachi Road,

Tambon Khlong Sakae, Amphoe Nakhon Luang

Phra Nakhon Si Ayutthaya Province 13260

Telephone: (036) 359 011-8

Fax: (036) 359 377

(1) PRODUCTION CAPACITY AND OUTPUT:

  Production, Production Capacity and Output:

  ----------------------------------- ----------- ----------- -----------
  (Unit : Metric Tons)                                        

                                      2000        1999        1998

  Production Capacity                 1,200,000   1,200,000   850,000

  Actual Production (MT)              598,514     659,804     748,665

  Actual Production (%)               49.88       54.98       88.08

  Growth Rate of Production (%)       (13.47)     (11.87)     17.39
  ----------------------------------- ----------- ----------- -----------

  (2) RAW MATERIAL SOURCES OF SUPPLY

Raw materials and main sources of supply:

+---------------------------------+------------------------------------+
| Ammonium Sulphate               | Thailand, Japan, Germany, Russia,  |
|                                 | South Korea, U.S.A., etc.          |
+---------------------------------+------------------------------------+
| Urea                            | Indonesia, Malaysia, Saudi Arabia, |
|                                 | U.S.A., etc.                       |
+---------------------------------+------------------------------------+
| MAP(Mono-Ammonium Phosphate)    | U.S.A., Tunisia, South Korea, the  |
| and DAP (Di-Ammonium Phosphate) | Philippines                        |
|                                 |                                    |
|                                 | and Morocco                        |
+---------------------------------+------------------------------------+
| Potassium Chloride              | Canada, Germany, Russia, Israel    |
+---------------------------------+------------------------------------+
| KAOLIN                          | Thailand                           |
+---------------------------------+------------------------------------+

Almost 90% of raw materials for the production process are imported and
the rest products such as kaolin are acquired locally since raw material
prices are fluctuated to the international market price trend which will
be mainly based on demand and supply of each time interval or each year.
Under the company's policy, the purchases will be based on the
competitive offer from many suppliers, and the raw material prices will
be on FOB prices and shipped on vessels chartered by the company.

  (3) PRODUCTION PROCESS

+----------+-----------------------------------------------------------+
|          | 1.  Store each raw material in its individual warehouse   |
+----------+-----------------------------------------------------------+
|          | 2.  Deliver each raw material by belt conveyor to the     |
|          |     automatic weighing machine                            |
+----------+-----------------------------------------------------------+
|          | 3.  Pass through the crusher and then the mixer which     |
|          |     controls steam and water as prescribed                |
+----------+-----------------------------------------------------------+
|          | 4.  After mixing homogeneously, the product will be       |
|          |     delivered to the Granulator                           |
+----------+-----------------------------------------------------------+
|          | 5.  Deliver the product to the Dryer to control moisture  |
|          |     content in accordance with the fertilizer standards   |
|          |     (3% maximum)                                          |
+----------+-----------------------------------------------------------+
|          | 6.  Fertilizer granules will be screened through mesh     |
|          |     size control. Offsized granules will be recycled      |
|          |     through the process                                   |
+----------+-----------------------------------------------------------+
|          | 7.  Standard granules will be delivered to the Cooler to  |
|          |     make it cool in order to avoid caking                 |
+----------+-----------------------------------------------------------+
|          | 8.  The cooled granules will then pass through the        |
|          |     coating process by spraying coating agent to prevent  |
|          |     moisture absorption                                   |
+----------+-----------------------------------------------------------+
|          | 9.  The processed products will be delivered by belt      |
|          |     conveyor to the Bulk Storage for further packing      |
+----------+-----------------------------------------------------------+

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