During 2007, GLG achieved many important milestones in the pursuit of our mission to become
the leading provider of high-grade stevia in the global marketplace. We are pleased to report
that we had a positive year of growth and solid execution, which has uniquely positioned GLG
for the emerging stevia market. As the sweetener environment evolves and consumer trends
move towards health and wellness in the search for an all natural calorie free alternative, stevia
is increasingly becoming a popular choice.
For GLG, 2007 was a year of building foundations as we committed our energy and focus to
further developing our vertically integrated stevia supply chain. As a result of our eff orts, our
operations now include seed development and breeding, propagation, harvesting, processing,
extraction, refining and formulating capabilities. Furthermore, we are dedicated to our research
and development program to continue to improve the quality of our stevia as well as search for
new product opportunities.
We closed fi scal year 2007 having made significant progress within our short and long-term
We closed fi scal year 2007 having made significant progress within our short and long-term
goals. The year included the following achievements:
- Five year renewable supplier agreement signed with Cargill, Inc. for the supply of high grade stevia
- 10-year agreements signed for the exclusive growth of stevia and the exclusive construction of refining facilities in the two best stevia growing provinces in China
- Agricultural High Tech Developments Limited acquired, a seed base operation with patent pending seeds and proprietary refining technology
- Construction on a new 500 metric ton refining facility in Qingdao, China
- Construction completed on a new 6,000 metric ton leaf storage warehouse in Qingdao, China
- Construction initiated on a 10,000 metric ton leaf processing facility in Mingguang City, China
- New subsidiaries Chuzhou Runhai Stevia High Tech Company, Ltd. and Anhui Bengbu Huinong Stevia High Tech Development Company, Ltd. established for leaf processing operations and GLG seed base operations
- Successful listing on the TSX main board achieved
- Private placement completed$34.5 million
In addition, 2007 was a year of strong financial performance for the company with total revenue
reaching $9.2 million, an increase of over 500% compared to $1.4 million in 2006 and EBITDA
topping $1.5 million, a 654% increase against 2006 fi gures. Most notably revenues from stevia
surged by nearly 1,000% over last year to reach $8.2 million. Procurement revenue from the
supply of health products to YHT chain stores was also strong and rose significantly in 2007 as
the number of store locations grew to over 1200.
Outlook for 2008
Looking forward, we expect the global market for stevia to continue to grow. The obesity
epidemic, diabetes and other health concerns associated with over-consumption are key driving
forces that are shaping consumer habits. Stevia is an emerging and revolutionizing new product
category that has the potential to replace the use of sugar and artifi cial sweeteners in soft
drinks, bakery goods, candies and more. This potential makes the market opportunity for this
non-caloric, natural sweetener very considerable.
As we move into 2008, significant industry developments have made stevia attractive for some
of the world's largest food and beverage companies, investors and consumers alike. GLG is in
an excellent position to capitalize on this changing environment and to be the fi rst and only
company able to provide a quality, cost-eff ective and commercially viable stevia product with
superior taste.
Our forward capital expenditure program is dedicated to expanding capacity from 200 to 1,500
annual metric tons of refining capability to meet anticipated demand. The company's competitive
advantages include vast stevia growth areas, patent-pending seedlings, proprietary processing
technology and favorable labor costs. An already strong existing customer base positions GLG
to thrive as this next generation of sweetening solutions continues to expand.
Further, we have just signed a multi-decade supply agreement with Cargill to be its exclusive
supplier of stevia in China and to supply a minimum of 80% of its global stevia extract
requirements for the fi rst fi ve years of the agreement. The contract's estimated valued in the
fi rst three years approaches $200 million and provides a solid foundation for our future growth.
As an integral component of Cargill's rebiana supply chain, we look forward to a very successful
partnership.
Foremost, GLG's key stakeholders - our customers, partners, employees and shareholders -
remain at the center of our strategy. We are focused on creating value for all stakeholders as we
deliver high-quality stevia to our customers and successfully deliver growth within our highly
effi cient vertically-integrated platform.
On behalf of management and the Board of Directors, we thank you for your continued support
of GLG Life Tech Corporation.
Dr. Luke Zhang
Chairman & President
