Jan. 22, 2007 (China Knowledge) – Fufeng Group, China's largest glutamic acid producer, will get a main strategic investor in Value Partners.

Value Partners will buy 80 million shares, or 20%, of Fufeng’s IPO. The Hong Kong-based asset manager has also agreed to not to sell the shares for the next six months.

Fufeng is targeting to raise about HK$900 million from the IPO by offering 400 million new shares at a price between HK$1.72 and HK$2.23. The company is expected to determine the final price on Jan. 31, the same day the institutional and retail offers close. Trading debut is scheduled for Feb. 8.

Proceeds will be mainly used to boost production capacity of glutamic acid over the next few years.

Fufeng Group announced a net profit of RMB 237 million for the fiscal 2006 on turnover of RMB 1.2 billion. Glutamic acid accounted for 58% of turnover. The group's annual glutamic acid production capacity now stands at 280,000 ton following the opening last month of the first phase of its production plant in Hohhot, Inner Mongolia. The other four existing plants are located in Mainland provinces like Shandong, Shaanxi and Inner Mongolia.

Fufeng also produces other food ingredients like monosodium glutamate and xanthan, as well as fertilizers and starch sweeteners.