2. Nature of Business
         The  Company  is a  manufacturer  and  distributor  of frozen 
fruits and  vegetables with the export volume in 1998 of 97.8 % of the 
total sale value.   The manufacture  involves  the  processing  of raw 
materials  of  agricultural  products  to  be  frozen  at  the average 
temperature of -25 celcius degrees.  
     The products of the Company are categorized as follows:
     Frozen vegetabels such as Green Beans, Soy Beans,Carrots, Spinach 
                               and Baby Corns etc.
     Frozen Fruits such as rambutans, Lychees, Mangosteens and Longans 

                The Sale of Products in the Past Three Years
Products                                             In thousand bahts 
                         The Company Only              Consolidated  
               1996         1997          1998            1998       
           Amount    %   Amount    %    Amount     %    Amount     %    
Frozen 
Vegetabels 626,218  99.2 748,676  99.7 1,068,214 100.0 1,128,422 100.0 
Frozen 
Fruits       5,059   0.8   2,354   0.3        26    -         26    - 
   Total   631,277 100.0 751,030 100.0 1,068,240 100.0 1,128,448 100.0
Markets
Overseas   627,697  99.4 745,971  99.3 1,044,514  97.8 1,104,722  97.9
Domestic     3,580   0.6   5,059   0.7    23,726   2.2    23,726   2.1
   Total   631,277 100.0 751,030 100.0 1,068,240 100.0 1,128,448 100.0

         2.1 Nature of Products
         The  received  raw  materials  are  inspected  by the quality 
control staff of the Company. Thereafter, the raw materials are picked 
by size  selection  machine and processed such as head and end cutting 
and  chopping  in  to sections and pieces etc., stored in chill rooms, 
gone through  machines for cleaning with water and sterilized, boiled, 
refrigerated  by  the  dip in water, processed  through  freezers  and 
stored  in  cold  storage  with -25  celcius degrees.  Thereafter, the 
quality of the products are  reexamined, graded, packed  and stored in 
the cold storage for the subsequent distribution.
         2.2 Manufacture or Product Procurement
         There  are  two  plants  at  the Company.  The first plant is 
located at No. 92 Moo 3, Chiangmai-Phrao Road, Tambol Nong Jom, Amphur 
Sansai, Chiangmai Province 50210, Telephone No. (6653) 498-195-8, Fax. 
No.(6653) 498-199.   The  second  plant is  located  at No. 299 Moo 3, 
Chiangmai - Phrao  Road, Tambol  Mae Fag Mai, Amphur Sansai, Chiangmai 
Province 50290, Telephone (6653)848-089-96, Fax. No. (6653) 848-997.
         (1)  Production Capacity and Production Volume
                                                     The Company Only
    
                Description              Units 1996  1997  1998 
    
     Full production capacity            Tons 22,04027,00027,000
     Actual production volume            Tons 15,09215,60718,384
     Capacity usage                       %    68.48 57.80 68.09
     Increase rate of production volume   %    41.36  3.41 17.79
     Increase rate of production value    %    16.67 11.14 24.22
    
         (2) Raw Materials and Sellers of Raw Materials
         The Company purchases the raw materials from the present more
than  20,000  farmers'  families  joining the project and covering the 
eight northern provinces of Chiangmai, Chiangrai, Phrae, Nan, Lampang, 
Phayao, Lumphun and Mae Hong Sorn.   The Company  provides the farmers 
with  planting  seeds,  fertilizers  and  insecticides.   The  Company 
guarantees  the  purchase  prices  of  the  raw materials.  During the 
planting seasons, the  Company  provides  the farmers with the experts 
who are the agricultural promotion staff of the Company to educate and 
advise  the  farmers  in  the  taking  care, fertilization, and use of 
chemical  products  so  that the farmers are able to have good harvest 
and maximum quantity of crops per rai.   When the crops are harvested, 
the  Company  purchases  the  crops  at the guaranteed prices with the 
deduction of the costs of planting seeds, fertilizers and insecticides  
from the purchase prices.
         (3) Manufacture Process
                                                     
                             Raw  Materials 
                            
                                   
                             Quality Control
                            
                 
                  Size Selection Machines and Processing
                  
                         
                         Storage in Chill Rooms 
                           
                 
                  Water Washing and Sterilizing Machines 
                 
                            
                             80 % Ripe Boil 
                            
                             
                              Refrigerated 
                             
                              
                                Freezing  
                              
                         
                         Stored in Cold Storage 
                        
                              
                                Packing                     
                   (Quality Inspection and Grade Selection) 
                 
                        
                         Stored in Cold Storage ----> For Subsequent 
                              Distribution       
         (4) Environmental Effects
         The  waste  water  from the product processing may affect the
environments.   The  Company  processes  the waste water through water
treatment system to have the water comply with the standards set forth
by  Department of  Industrial  Works  before the dispatch to the water
drainage system. As to the raw material refuses from the manufacturing
process,  the  Company  sells them as by products to be used as animal
feeds. This creates no rubbish disposals and causes no adverse effects
to the environments.
         2.3 Marketing
             (1) Marketing Strategy
             The industry of frozen  vegetabels and fruits produces is
the  new  line  of  products  which add more choices to the consumers.  
Formerly, fruits  and vegetable were fresh or refrigerated products or 
were processed for canning or were in form of dry products, which lack 
of freshness and  mixed  with  preservation  materials.  The consumers 
were only able to consume the fresh products in the respective seasons 
and were not able to buy the  same when they were out of seasons.  But 
in case of frozen fruits and vegetables, they are kept fresh and clean 
without  the  reservation  materials and possess significant advantage 
that they are available throughout of the year.
             (2) Distribution and Distribution Channels
             Almost  all  the Company's products are exported overseas 
through the channels of :
             Domestic
             The distribution is done through P.P.Food Supply Co.,Ltd.,
which  accounted  for  the approximate 2 % of the total sale volume in 
1998.
             Overseas   There are two channels:
             1. Direct   distribution   to  the  customers  which  are 
department stores and supermarkets in Japan such as:
                    - Daiei, Inc.            - Ito-Yokado Co.,Ltd.
                    - Aim Co.,Ltd.           - The Seiyu Ltd.
                    - Jusco Co.,Ltd.
             which accounts approximate 82 % of the total sale volume.
             2.  Distribution  through the distributors such as Itochu
Corporation,  a  shareholder  of  the  Company, which accounts for the 
approximate 16 % of the total sale. The Company pays the commission to 
the distributors at the rate of 3 %.
             (3) Nature of Customers 
             Most  customers  of the Company are department stores and 
supermarkets such as  Daiei Inc.,  Ito-Yokado Co.,Ltd.,  Aim Co.,Ltd.,
The Seiyu Ltd., and Jusco Co.,Ltd.,  which maintain good relationships
with the Company. The orders of the products are in form of letters of
credit directly in the name of the Company.
             (4) Undelivered Orders
                 - None -
         2.4 Rights and Limitation of Business
             (1) Promotion Certificate
                 
                                      1st         2nd        3rd 
                                  Certificate Certificate Certificate
Running Numbers of 
Promotion Certificats            1727/SorOr./ 1063/SorOr./  1397/2537
                                     2531        2536

           List                      1st      2nd       3rd      
                                CertificateCertificateCertificate

Plant No.                            1          1          2     
Promotion Certificate date       12/12/1988 28/04/1993  7/07/1994
Business capacity (tons/year)     10,000      5,000      12,000  
Validity of Promotion                7          6          8     
Certificate (years)                                              
Effective dates of Promotion      1/02/1990  1/11/1994  1/03/1996
Certificate                                                      
Expiry dates of Promotion        31/01/1997 31/10/2000 28/02/2004
Certificate                                                      
Distribution-Export (%)             100        30         70     
            -Domestic (%)            -         70         30     
Granted investment promotion        Yes        Yes        Yes    
in the manufacture of fruits                                     
and vegetables                                                   
Type of business                    1.3        1.8        1.8    
  1.3 Food Manufacture or                                        
      preservation                                               
  1.8 Food Manufacture                                           
Exemption from company              Yes        Yes        Yes    
income tax                                                        
Deduction of two times of           Yes        Yes        Yes    
transportation and electricity                                     
fee for ten years as from                                        
income earning commencement                                      
Deduction of assessable income      Yes        Yes        Yes    
of 5 % of the increased income                                   
in preceding year for ten years                                  
After the expiry of Promotion       Yes        Yes        Yes    
Certificate, deduction of 50 %                                   
company income tax for five                                      
years                                                            

             As an investment promoted company,the Company is required
to  comply  with  the  conditions  and  stipulations  provided  in the 
Investment Promotion Certification.
             (2) Other Rights
             - Approval  from   Revenue  Department  as  extraordinary 
               reliable  refunder  of value added tax which allows the 
               Company to refund value added tax quickly.
             - Approval from  Customs  Department as the extraordinary 
               reliable  exporter   No. 424/2540   and   to  use  bank 
               guarantees  as  collaterals  for  the payment of import 
               duty  at  the  rate  of 5 %  of  imposed  duty  for the 
               imported  raw  materials for the export.
             (3) Business Limitations
             The  Company's  raw  materials  are  available seasonally 
             which are subject to the unpredictable weather.
         2.5 Future Projects.
             - In  1999  the  company  will   establish   registration 
investment with Taiwanese which is conjunction with investment project
in Chian by  establishing  "Trading  Company" to represent as sale and
cooperate with clients with registered  capital 500,000 Taiwan dollars
with ratio of investment by 51 %.
             - In 1999 the company shall invest in Princess Foods Co.,
Ltd.,  at  ratio  20 %   of  register  capital  55  million  bahts  in 
manufacturing frozen foods business for export.
             - The  Company  will  proceed applying for promotion from 
office of Board of Investment at CM2  to manufacture frozen fruits and
vegetables., capital amount  investment  about 40 million bahts due to 
the processing machine of first license promotion start declining.
             - The  Company  shall  install the  supplement machine at 
first plant for fruits hiring service. 
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