Agricultural Products in China

Industry Profile

Reference Code: 0099-2000 Publication date: September 2008

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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market Value The Chinese agricultural products market grew by 6.8% in 2007 to reach a value of $427.5 billion. Market Value Forecast In 2012, the Chinese agricultural products market is forecast to have a value of $621.6 billion, an increase of 45.4% since 2007. Market Volume The Chinese agricultural products market grew by 7.5% in 2007 to reach a volume of 1,075.5 million tons. Market Volume Forecast In 2012, the Chinese agricultural products market is forecast to have a volume of 1,465.4 million tons, an increase of 36.3% since 2007. Market Segmentation I Fruit, vegetables and roots form the largest segment in the Chinese agricultural products market, generating 51.4% of the total value. Market Segmentation II China generates 53.1% of the Asia-Pacific agricultural products market's value.

China - Agricultural Products Datamonitor (Published September 2008) Page 3

CONTENTS

TABLE OF CONTENTS

EXECUTIVE SUMMARY CHAPTER 1

1.1 1.2 1.3

3 7
7 7 8

Market Overview

Market Definition Research Highlights Market Analysis

CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 CHAPTER 7

7.1 7.2 7.3 7.4

Market Value Market Volume Market Segmentation I Market Segmentation II Competitive Landscape Leading Companies

9 10 11 12 13 16
16 19 21 23

Carrefour S.A. Beijing Hualian Hypermarket Co., Ltd. Lianhua Supermarket Holdings Co., Ltd. Metro AG

CHAPTER 8
8.1 8.2

Market Forecasts

25
25 26

Market Value Forecast Market Volume Forecast

CHAPTER 9

Macroeconomic Indicators

27

China - Agricultural Products Datamonitor (Published September 2008) Page 4

CONTENTS
CHAPTER 10
10.1 Methodology 10.2 Industry Associations 10.3 Related Datamonitor Research

Appendix

29
29 30 30

China - Agricultural Products Datamonitor (Published September 2008) Page 5

CONTENTS

LIST OF TABLES
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: China Agricultural Products Market Value: $ billion, 2003-2007..........................9 China Agricultural Products Market Volume: Tons million, 2003-2007..............10 China Agricultural Products Market Segmentation I: % Share, by Value, 2007 11 China Agricultural Products Market Segmentation II: % Share, by Value, 200712 Key Facts: Carrefour S.A. .................................................................................16 Key Financials: Carrefour S.A...........................................................................18 Key Facts: Beijing Hualian Hypermarket Co., Ltd. ............................................19 Key Financials: Beijing Hualian Hypermarket Co., Ltd. .....................................20 Key Facts: Lianhua Supermarket Holdings Co., Ltd..........................................21 Key Financials: Lianhua Supermarket Holdings Co., Ltd. .................................22 Key Facts: Metro AG ........................................................................................23 Key Financials: Metro AG .................................................................................24 China Agricultural Products Market Value Forecast: $ billion, 2007-2012.........25 China Agricultural Products Market Volume Forecast: Tons million, 2007-201226 China Size of Population (million) , 2003-2007 .................................................27 China GDP (Constant 2000 Prices, $ billion), 2003-2007 .................................27 China Inflation, 2003-2007................................................................................27 China Exchange Rate, 2003 .............................................................................28

China - Agricultural Products Datamonitor (Published September 2008) Page 6

MARKET OVERVIEW

CHAPTER 1

MARKET OVERVIEW

1.1

Market Definition
The agricultural products market consists of cereals, roots and tubers, sugarcrops, sugars and sweetners, oilseeds, fruit, vegetables, vegetable oil, treenuts, beans and pulses, spices, coffee, tea and cocoa. It does not include forage products. In addition, products consumed at a subsistence level are not given a market value, although they are included in market volumes. Also, any part of production that is wasted has been disregarded. Market values are calculated at retail selling price (RSP) for those products that are sold to consumers in their original form. However, where products have been processed into other forms of foodstuff, values have been calculated at producers selling price. Any currency conversions included in this report have been calculated using constant 2007 annual average exchange rates. Market volumes reflect domestic supply of agricultural products. The players shown in the leading companies section of this report are all agricultural products retailers. Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and Taiwan.

1.2

Research Highlights
The Chinese agricultural products market generated total revenues of $427.5 billion in 2007, representing a compound annual growth rate (CAGR) of 8.1% for the period spanning 2003-2007. Fruit, Vegetables and Roots sales proved the most lucrative for the Chinese agricultural products market in 2007, generating total revenues of $219.6 billion, equivalent to 51.4% of the market's overall value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 7.8% for the five-year period 2007-2012, which is expected to drive the market to a value of $621.6 billion by the end of 2012.

China - Agricultural Products Datamonitor (Published September 2008) Page 7

MARKET OVERVIEW
1.3 Market Analysis
Following a period of strong yet fluctuating growth since 2003, the Chinese agricultural products market is expected to continue such trends with only a moderate deceleration expected for the forecast period to 2012. The Chinese agricultural products market generated total revenues of $427.5 billion in 2007, representing a compound annual growth rate (CAGR) of 8.1% for the period spanning 2003-2007. In comparison, the Japanese and Indian markets grew with CAGRs of 1.9% and 7.3%, respectively, over the same period, to reach respective values of $83.1 billion and $231.3 billion in 2007. Market production volumes increased with a CAGR of 6% between 2003-2007, to reach a total of 1.1 billion tons in 2007. The market's volume is expected to rise to 1.5 billion tons by the end of 2012, representing a CAGR of 6.4% for the 2007-2012 period. Fruit, Vegetables and Roots sales proved the most lucrative for the Chinese agricultural products market in 2007, generating total revenues of $219.6 billion, equivalent to 51.4% of the market's overall value. In comparison, sales of Cereals generated revenues of $76.2 billion in 2007, equating to 17.8% of the market's aggregate revenues. The performance of the market is forecast to decelerate, with an anticipated CAGR of 7.8% for the five-year period 2007-2012, which is expected to drive the market to a value of $621.6 billion by the end of 2012. Comparatively, the Japanese and Indian markets will grow with CAGRs of 3.5% and 8.2%, respectively, over the same period, to reach respective values of $98.8 billion and $343.5 billion in 2012.

China - Agricultural Products Datamonitor (Published September 2008) Page 8

MARKET VALUE

CHAPTER 2

MARKET VALUE

The Chinese agricultural products market grew by 6.8% in 2007 to reach a value of $427.5 billion. The compound annual growth rate of the market in the period 2003-2007 was 8.1%. Table 1: China Agricultural Products Market Value: $ billion, 2003-2007 RMB yuan billion 2,382.3 2,662.2 2,856.6 3,049.6 3,256.2

Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

Source: Datamonitor

$ billion 312.7 349.5 375.0 400.4 427.5

% Growth

11.80% 7.30% 6.80% 6.80% 8.1%

DATAMONITOR

Figure 1:

China Agricultural Products Market Value: $ billion, 2003-2007

$ billion 450 400 350 300 250 200 150 100 50 0 2003 2004 2005 $ billion

% Growth 14.0% 12.0% 10.0% % Growth 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 9

MARKET VOLUME

CHAPTER 3

MARKET VOLUME

The Chinese agricultural products market grew by 7.5% in 2007 to reach a volume of 1,075.5 million tons. The compound annual growth rate of the market volume in the period 2003-2007 was 6%. Table 2: China Agricultural Products Market Volume: Tons million, 20032007 Tons million 852.1 934.4 955.3 1,000.4 1,075.5 % Growth

Year 2003 2004 2005 2006 2007 CAGR, 2003-2007:

Source: Datamonitor

9.70% 2.20% 4.70% 7.50% 6.0%

DATAMONITOR

Figure 2:

China Agricultural Products Market Volume: Tons million, 20032007

Tons million 1,200 1,000 Tons million 800 600 400 200 0 2003 2004 2005

% Growth 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2006 2007 % Growth

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 10

MARKET SEGMENTATION I

CHAPTER 4

MARKET SEGMENTATION I

Fruit, vegetables and roots form the largest segment in the Chinese agricultural products market, generating 51.4% of the total value. Cereals account for a further 17.8% of the regional market's value. Table 3: China Agricultural Products Market Segmentation I: % Share, by Value, 2007 % Share 51.40% 17.80% 13.40% 9.80% 6.80% 0.80% 100.0%
DATAMONITOR

Category Fruit, Vegetables & Roots Cereals Sugarcrops, Sugar & Sweetners Oilcrops & Pulses Spices & Stimulants Nuts Total
Source: Datamonitor

Figure 3:

China Agricultural Products Market Segmentation I: % Share, by Value, 2007

Oilcrops & Pulses 9.8% Sugarcrops, Sugar & Sw eetners 13.4%

Spices & Stimulants 6.8%

Nuts 0.8%

Fruit, Vegetables & Roots 51.4%

Cereals 17.8%

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 11

MARKET SEGMENTATION II

CHAPTER 5

MARKET SEGMENTATION II

China generates 53.1% of the Asia-Pacific agricultural products market's value. In comparison, India generates 28.7% of the Asia-Pacific market's value. Table 4: China Agricultural Products Market Segmentation II: % Share, by Value, 2007 Geography China India Japan South Korea Rest of Asia-Pacific Total
Source: Datamonitor

% Share 53.10% 28.70% 10.30% 4.00% 3.90% 100.0%

DATAMONITOR

Figure 4:

China Agricultural Products Market Segmentation II: % Share, by Value, 2007

Rest of AsiaPacific 3.9%

South Korea 4% Japan 10.3%

China 53.1% India 28.7%

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 12

COMPETITIVE LANDSCAPE

CHAPTER 6

COMPETITIVE LANDSCAPE

Farming practices within China range from small scale family owned holdings to large commercial farming operations. The major buyers of market-ready products, such as fruit and vegetables, are large grocery retailers, whereas the major buyers of products requiring processing, such as cereal grain, are wholesale dealers and food processing companies. The costs of machinery and land required to work a large-scale farm are high and provide a significant barrier to entrance. Furthermore, farmers worldwide are facing increasing operational costs due to the spiraling cost of oil and shortages of phosphate fertiliser. The agricultural products market will be analyzed considering producers, i.e. farmers, as market players, and wholesale importers and exporters, food processing companies and grocery retailers as buyers. Although large co-operative farms exits within the Chinese market, the Chinese agricultural market is highly fragmented compared to western markets. The majority of commercial farmers operating relatively small scale holdings, producing a limited amount of produce for local consumption. However, rapidly increasing food demands are leading to an increase in the extent of large scale farming co-operatives. The customers of such large scale operations are typically food processing companies and supermarket chains. Such large buyers wield their large purchasing power to negotiate minimal prices through bulk purchasing. Overall, buyer power with respect to the Chinese agricultural products market is moderate. Key inputs to agricultural producers include fertilizers and agricultural machinery. Fertilizer products are typically produced and supplied by large chemical companies. High demand for such products allows chemical companies to control prices, which are highly dependent upon the price of inputs into their manufacturing processes. For example, the price of nitrogen-based fertilizers, such as ammonia and ammonium nitrate, has increased dramatically recently in line with the spiraling cost of natural gas. Similarly, a shortage of phosphate worldwide has led to its price to increase dramatically. However, fertilizer products are typically relatively simple chemicals and as such lack differentiation and are available in fairly consistent quality from a larger number of suppliers.

China - Agricultural Products Datamonitor (Published September 2008) Page 13

COMPETITIVE LANDSCAPE
Alternatives include the use of animal and human waste as fertilizer, or organic farming practices, which eliminate the use of artificial fertilizer products. Strong growth in farming worldwide has led to burgeoning demand for agricultural machinery, which enhances the supplier power of agricultural machinery manufacturers. Overall, supplier power with respect to agricultural products market players is moderate. The majority of the population of China is still relatively rural in nature and a high proportion of people are still involved in agriculture, either for self-sufficiency or commercial purposes. The majority of farming in China is undertaken within small scale family owned farms, which often act collectively within co-operatives. Given the small scale of most Chinese farming operations combined with the existence of cooperatives, players can enter on a small scale relatively unhindered. However, in order to start a competitive large scale farming operation, the significant cost of machinery and land may pose significant barriers to the entrance of new players. In recent years, some foreign players have started operations within China, attracted by the abundance of low cost highly fertile land and a burgeoning market for food in the country. For example, in 2006, the Japanese companies Asahi Breweries, Itochu Trading Corp. and Sumitomo Chemical Co. leased 100 hectares of land for an annual fee of US$1,500 per hectare from 800 local farmers in Chinas Shandong province to produce arable crops and fruit and vegetables to be sold locally. Furthermore, the increasing demand for food within China is increasingly attracting foreign companies to enter the market through the importation of agricultural produce. Overall, the threat of new entrants is moderate. The agricultural products market encompasses a wide variety of products, for which the threat of substitution varies considerably. For example, many fruit and vegetables and cereal products, most notably rice, form staple dietary components for which the threat of substitution is low. The method of production compared to traditional methods, is also of relevance to substitution within this market. Organically certified produce is increasingly being favored in recent years due to the supposed health benefits of avoiding the use of chemical fertilizers and the more environmentally friendly image of organic production. On the negative side, such produce is considerably more expensive for consumers. However, the cost of organic farming in comparison to intensive methods is declining as dramatic increases in fuel and fertilizer prices negatively impact upon non-organic methods. Overall, the threat of substitutes is defined as moderate, but the inability of this model to reflect the differences of the large range of agricultural products should be appreciated.

China - Agricultural Products Datamonitor (Published September 2008) Page 14

COMPETITIVE LANDSCAPE
Players within the Chinese agricultural products market range from individually owned farms to large consolidated farming corporations. It should be appreciated that the latter has a distinct advantage through their scale economies of mass production. With the exception of produce quality, there is typically a lack of differentiation between produce from different producers and producers are typically highly similar, which enhances rivalry. Overall, rivalry within the agricultural products market is moderate.

China - Agricultural Products Datamonitor (Published September 2008) Page 15

LEADING COMPANIES

CHAPTER 7

LEADING COMPANIES

7.1

Carrefour S.A.
Table 5: Key Facts: Carrefour S.A. 26 quai Michele,TSA 20016,92695 Levallois Perret Cedex,FRA 33 1 55 63 39 00 33 1 55 63 39 01 www.carrefour.com December CARR Paris
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Carrefour is one of the world's leading distribution groups which operates 15, 000 stores in 30 countries. This number includes 1,086 hypermarkets, 1,702 supermarket chains, 4,823 hard discount stores, and 295 convenience stores and cash and carry outlets. The group is the world's second largest retailer and the largest in Europe. It operates through four grocery store formats: hypermarkets, supermarkets, hard discount and convenience stores. Other channels of distribution include cash and carry foodservice stores, an online virtual supermarket Ooshop.com and a non-food retail website Boostore.com. Carrefour operates in three primary markets: Europe, Latin America and Asia. The group operates its stores under several brands including hypermarkets (Carrefour), supermarkets (Champion, GB, GS, Norte) and hard discount stores (Dia)). Carrefour procures a substantial portion of supplies from local sourcing through long-term partnerships with small and medium scaled enterprises (SMEs). Local sourcing has helped in the development of group owned brands that offer regional products such as the Reflets de France (France) and Terra d'Italia (Italy). The Carrefour group is primarily organized by geographic region: France, Europe excluding France, Asia and Latin America on the first level. The group also classifies its operations based on store formatshypermarkets, supermarkets and hard discount stores.

China - Agricultural Products Datamonitor (Published September 2008) Page 16

LEADING COMPANIES
Carrefour hypermarkets offer a wide range of competitively priced food and non-food products. The group has about 194 hypermarkets in France, 399 in European countries outside France, 255 in Latin America, and 238 in Asia. Besides providing an assortment of products, the hypermarkets also offer services like insurance, financial services, home computer support, travel and entertainment reservations and mobile phones. The group operates approximately 2,708 stores in nine countries under the banners Champion, Norte, GS and GB. Carrefour has about 604 supermarkets in France, 957 in European countries outside France and 141 in Latin America. The supermarkets offer a wide selection of mostly food products. The supermarkets primarily operate under trade names. For instance, it operates under the Champion banner in France and constitutes the second largest supermarket network in the country; Carrefour Express in Spain, Poland, Turkey and Brazil; Champion Marinopoulos in Greece; GB in Belgium and GS in Italy. Carrefour ranks third in Europe in the hard discount store segment. The group operates about 840 hard discount stores in France, 3,136 in the European countries excluding France, 572 in Latin America and 275 in the Asian region. In addition to grocery products, the group offers basic health and cleaning products. Half of the products in the hard discount stores are sold under the Dia brand name. The other activities of the group comprise store formats such as convenience stores, cash and carry foodservice stores and e-commerce. Under these formats, Carrefour operates 61 stores in France, 229 stores in other European nations and 5 in Latin America. Convenience stores offer a range of products covering all food requirements under the banners Shopi, Marche Plus, 8 a Huit, Proxi and Sherpa in France; Carreffour Express in Belgium; Di per Di in Italy; and 5' Marinopo ulos, Smile Market and Ok in Greece. These stores offer a range of services such as home delivery, dry cleaning, 48-hour photo development, ticket distribution, photocopying, stamps, newspapers and more. Cash and carry foodservice stores provide wholesale and retail self-service mainly intended for businesses. The group operates cash and carry foodservice stores under the trade name Promocash. Carrefour operates 20 cash and carry stores in Italy under the banners, Docks Market and Gross Iper. The group operates an online grocery store, Ooshop. Ooshop is a leading French online supermarket in terms of sales. It allows customers to shop on the Internet, and select from product listings including fresh and frozen items at the same price as they would pay in Carrefour's hypermarkets, with the added benefit of home delivery.

China - Agricultural Products Datamonitor (Published September 2008) Page 17

LEADING COMPANIES
Carrefour France's hypermarkets launched a non-food website, Boostore. This website offers products such as leisure products (DVDs, games, software, music, books and more), audio and video, household electrical goods, as well as music downloads and even flower and bicycle delivery. Key Metrics Table 6: Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees Key Financials: Carrefour S.A. 2003 2004 2005 101,323.2 2,164.7 2.1% 63,285.1 50,442.0 436,474 2006 108,021.1 3,327.8 3.1% 65,039.3 47,584.9 456,295 2007 112,405.9 3,145.8 2.8% 71,059.9 56,469.4 490,042

96,447.8 99,433.5 2,378.2 2,064.8 2.5% 2.1% 53,450.9 57,858.3 40,275.3 46,925.4 402,256 409,964

Source: Company Filings

DATAMONITOR

Figure 5:

Revenues & Profitability: Carrefour S.A.

Revenues 120,000 100,000 US$ Millions 80,000 60,000 40,000 20,000 0 2003

Net Income

Profit Margin 3.5% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Profit Margin (%)
Page 18

3.0%

2004

2005 Year

2006

2007

Source: Company Filings

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008)

LEADING COMPANIES
7.2 Beijing Hualian Hypermarket Co., Ltd.
Table 7: Key Facts: Beijing Hualian Hypermarket Co., Ltd. 1 Fuwai Street Sichuan Building,East Tower Xicheng District,Beijing 100037,CHN 86 10 88363718 N/A www.beijing-hualian.com December 600361 Shanghai
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Beijing Hualian Hypermarket is principally engaged in commodity retailing, as well as supermarket and department store operation. It is mainly engaged in hypermarket and fresh-food market chain operations with total varieties of merchandises of over 60 thousand. The company primarily operates in the China. It is headquartered in Beijing, Republic of China.

China - Agricultural Products Datamonitor (Published September 2008) Page 19

LEADING COMPANIES
Key Metrics Table 8: Metric Revenues Net Income Profit Margin Total Assets Total Liabilities
Source: Company Filings

Key Financials: Beijing Hualian Hypermarket Co., Ltd. 2003 106.8 15.6 14.6% 53.5 38.2 2004 113.4 23.5 20.7% 55.1 38.0 2005 128.2 3.1 2.5% 58.8 40.0 2006 156.4 4.0 2.6% 80.1 43.3 2007 179.0 4.9 2.7% 92.7 52.9

DATAMONITOR

Figure 6:

Revenues & Profitability: Beijing Hualian Hypermarket Co., Ltd.

Revenues 200 US$ Millions 150 100

Net Income

Profit Margin 25.0% 20.0% 15.0% 10.0% Profit Margin (%)

Page 20

50 0 2003 2004 2005 Year 2006 2007

5.0% 0.0%

Source: Company Filings

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008)

LEADING COMPANIES
7.3 Lianhua Supermarket Holdings Co., Ltd.
Table 9: Key Facts: Lianhua Supermarket Holdings Co., Ltd. 11-15th Floors,1666 Sichuan North Road,Shanghai,CHN 86 21 6393 7700 86 21 6393 1318 www.lhok.com.cn December 0980 Hong Kong
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Lianhua Supermarket Holdings (Lianhua Supermarket) is a retail chain operator with retail outlets offering a range of products and services through direct operations, franchises, mergers and acquisitions. The company's other operations include sale of merchandise to wholesalers; logistic services for wholesale business; and sales through internet. The company operates 3,716 outlets (excluding those operated by the company's associated companies) spanning in 20 provinces and municipalities in China. The company operates through three business segments: hypermarkets,

supermarkets and convenience stores. The three retail formats operate under the brand names: Century Mart, Lianhua Supermarket and Lianhua Quik, respectively. Lianhua Supermarket operates 104 hypermarkets, 1,652 supermarkets stores (625 directly operated stores and 1,027 franchised stores) and 1,960 convenience stores (1,114 directly operated stores and 846 franchised stores). Centurymart hypermarkets offers a range of products and also offers various ancillary services such as laundry, banking, pharmaceutical, photo-finishing and shoerepairing services. The segment operates 104 directly operated stores. Lianhua supermarkets offers products and services closely related to daily life. Lianhua supermarkets operates 625 directly operated stores and 1,027 franchised stores. Quik convenience stores operates 1,114 directly operated stores and 846 franchised stores. The Group operates three major distribution centres which provide storage, distribution and logistics services for Lianhua retail outlets in the Shanghai area and Zhejiang regions. The company through franchises provides computer management softwares and personnel training to a franchisee.
China - Agricultural Products Datamonitor (Published September 2008) Page 21

LEADING COMPANIES
The company through Lianhua E-business, operates an on-line supermarket, www.lhok.com, and a service hotline 96801 which serves as an alternative shopping channel for the consumers to purchase on-line. Key Metrics Table 10: Metric Revenues Net Income Profit Margin Total Assets Total Liabilities
Source: Company Filings

Key Financials: Lianhua Supermarket Holdings Co., Ltd. 2003 1,218.6 21.5 1.8% 533.3 365.3 2004 1,425.1 28.3 2.0% 631.6 404.7 2005 1,879.0 31.5 1.7% 130.6 670.1 2006 2,158.7 31.7 1.5% 1,168.5 899.2 2007 2,387.6 35.2 1.5% 1,515.3 1,221.4

DATAMONITOR

Figure 7:

Revenues & Profitability: Lianhua Supermarket Holdings Co., Ltd.

Revenues 3,000 2,500 US$ Millions 2,000 1,500 1,000 500 0 2003

Net Income

Profit Margin 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Profit Margin (%)
Page 22

2004

2005 Year

2006

2007

Source: Company Filings

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008)

LEADING COMPANIES
7.4 Metro AG
Table 11: Key Facts: Metro AG Schlueterstrasse 1,Dusseldorf,40235 Germany,DEU 49 211 6886 0 49 211 6886 3759 www.metrogroup.de December MEOG Frankfurt
DATAMONITOR

Address: Telephone: Fax: Website: Financial Year-End: Ticker: Stock Exchange:

Source: Company Website

Metro is the holding company for the Metro Group, Germany's largest retailer. The group also operates in 2,400 locations in 30 other countries including Austria, Belgium, China, the UK, Switzerland and India. The group conducts its operations through five sales divisions: Metro Cash & Carry, Media Markt and Saturn, Real including Extra, Galeria Kaufhof and 'other'. The Metro Cash & Carry division operates in the self-service wholesaling sector with 585 stores across 28 countries. It offers a broad range of food and non food products under the brand names of Metro and Makro to commercial customers and large-scale consumers, including hotel, restaurant and kiosk operators, caterers, small food retailers, hospitals, government agencies and service providers. The Metro Cash & Carry concept is addressed to professional, commercial customers. Cash & carry means that the customers pick the goods themselves, pay cash and transport them with their own vehicles. The Media Markt and Saturn division is one of the largest consumer electronics retailers in Europe and German Market. The consumer electronic centers of Media Markt and Saturn offer customers over 45,000 brand products in the areas of entertainment, electronics, household appliances, new media, telecommunications, computers and photography, including all of the latest products. In addition, the division also provides customer services, including repair work, product delivery and installation. As of March 2006, the group operated 455 Media Markt in 14 countries and 176 Saturn stores in eight countries. Real, including Extra division comprises hypermarkets and supermarkets. The real division operates a total of 374 hypermarkets and the Extra division operated 259 supermarkets in 2006.

China - Agricultural Products Datamonitor (Published September 2008) Page 23

LEADING COMPANIES
Through its stores, the division offers over 80,000 articles, including both food and non food products. In food products, it offers groceries and fresh foods, including fruit, vegetables, cold cuts, meat, dairy products and oven-fresh baked goods. In non food products, the division offers products covering daily needs such as textiles, cutlery and small household appliances or toys. The group runs over 142 Galeria Kaufhof department stores throughout Germany and Belgium. These stores offer modern lifestyle apparels for both men and women under the brand names Mark Adam New York, Miss H, Rover & Lakes and Redwood. Metro also operates the Dinea chain of restaurants and Adler fashion stores. Key Metrics Table 12: Metric Revenues Net Income Profit Margin Total Assets Total Liabilities Employees
Source: Company Filings

Key Financials: Metro AG 2003 2004 2005 2006 2007

73,335.4 73,171.2 76,245.9 81,938.1 88,034.0 678.7 1,268.4 888.0 1,632.4 1,345.1 0.9% 1.7% 1.2% 2.0% 1.5% 36,370.1 38,794.8 39,362.6 43,988.9 46,347.9 30,676.5 32,159.8 32,092.7 35,714.7 37,441.5 252,037 231,841 246,875 263,794 218,874
DATAMONITOR

Figure 8:

Revenues & Profitability: Metro AG

Revenues 100,000 US$ Millions 80,000 60,000 40,000 20,000 0 2003

Net Income

Profit Margin 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Profit Margin (%)
Page 24

2004

2005 Year

2006

2007

Source: Company Filings

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008)

MARKET FORECASTS

CHAPTER 8

MARKET FORECASTS

8.1

Market Value Forecast

In 2012, the Chinese agricultural products market is forecast to have a value of $621.6 billion, an increase of 45.4% since 2007. The compound annual growth rate of the market in the period 2007-2012 is predicted to be 7.8%. Table 13: China Agricultural Products Market Value Forecast: $ billion, 2007-2012 RMB yuan billion 3,256.2 3,510.6 3,786.6 4,082.1 4,397.9 4,734.5

Year 2007 2008 2009 2010 2011 2012 CAGR, 2007-2012:

Source: Datamonitor

$ billion 427.5 460.9 497.1 535.9 577.4 621.6

% Growth 6.80% 7.80% 7.90% 7.80% 7.70% 7.70% 7.8%

DATAMONITOR

Figure 9:

China Agricultural Products Market Value Forecast: $ billion, 2007-2012

$ billion 700 600 500 $ billion 400 300 200 100 0 2007 2008 2009 2010

% Growth 8.0% 7.8% 7.6% 7.4% 7.2% 7.0% 6.8% 6.6% 6.4% 6.2% 2011 2012 % Growth

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 25

MARKET FORECASTS

8.2

Market Volume Forecast

In 2012, the Chinese agricultural products market is forecast to have a volume of 1,465.4 million tons, an increase of 36.3% since 2007. The compound annual growth rate of the market volume in the period 2007-2012 is predicted to be 6.4%. Table 14: China Agricultural Products Market Volume Forecast: Tons million, 2007-2012 Tons million 1,075.5 1,137.9 1,208.2 1,285.4 1,370.6 1,465.4 % Growth 7.50% 5.80% 6.20% 6.40% 6.60% 6.90% 6.4%
DATAMONITOR

Year 2007 2008 2009 2010 2011 2012 CAGR, 2007-2012:

Source: Datamonitor

Figure 10:

China Agricultural Products Market Volume Forecast: Tons million, 2007-2012

Tons million 1,600 1,400 Tons million 1,200 1,000 800 600 400 200 0 2007 2008 2009 2010

% Growth 8.0% 7.0% 6.0% % Growth 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2011 2012

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 26

MACROECONOMIC INDICATORS

CHAPTER 9
Table 15: Year 2003 2004 2005 2006 2007

MACROECONOMIC INDICATORS
China Size of Population (million) , 2003-2007 Population (million) 1291.5 1298.8 1306.3 1314.0 1321.9 % Growth

0.60% 0.60% 0.60% 0.60%

Source: Datamonitor

DATAMONITOR

Table 16:

China GDP (Constant 2000 Prices, $ billion), 2003-2007 Constant 2000 Prices, $ billion 1402.7 1544.4 1697.2 1851.1 2017.8

Year 2003 2004 2005 2006 2007

% Growth

10.10% 9.90% 9.10% 9.00%

Source: Datamonitor

DATAMONITOR

Table 17: Year 2003 2004 2005 2006 2007

China Inflation, 2003-2007 Inflation Rate (%) 1.2 -0.1 0.2 0.2 0.4 % Growth

-111.20% -4.90% 104.50%

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 27

MACROECONOMIC INDICATORS
Table 18: China Exchange Rate, 2003 Exchange Rate ($/RMB yuan) 0.12068 0.12067 0.1219 0.12528 0.13128

Year 2003 2004 2005 2006 2007

Source: Datamonitor

DATAMONITOR

China - Agricultural Products Datamonitor (Published September 2008) Page 28

APPENDIX

CHAPTER 10

APPENDIX

10.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style. Review of in-house databases Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitors in-house databases provide the foundation for all related industry profiles Preparatory research We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources, including: National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

China - Agricultural Products Datamonitor (Published September 2008) Page 29

APPENDIX
10.2 Industry Associations
Asia Pacific Association of Agricultural Research Institutions 39 Phra Atit Road, Phra Nakorn, Bangkok 10200 Thailand Tel: 66 2 697 4371/2 Fax: 66 2 697 4408 http://www.apaari.org

10.3 Related Datamonitor Research

Datamonitor Industry Profiles Global Agricultural Products Agricultural Products in Asia-Pacific Agricultural Products in France Agricultural Products in Germany Agricultural Products in the United Kingdom Agricultural Products in Japan Agricultural Products in the United States Agricultural Products in Europe Agricultural Products in Italy Agricultural Products in Belgium Agricultural Products in the Netherlands

China - Agricultural Products Datamonitor (Published September 2008) Page 30