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Chongqing Changlong to Invest 50 Million Yuan in Sweet Potato Cultivation; May Enter Energy Sector “The company’s senior management did announce plans to invest 50 million yuan in growing sweet potatoes and establishing facilities for their further processing in areas such as Wanzhou and Zhongxian in Chongqing. However, the aim at that time was to provide raw materials such as pharmaceutical ethanol and pharmaceutical starch for the group’s biopharmaceutical companies.” It is now possible that it will be used to supply raw materials for the ethanol (alcohol) gasoline production line that Chongqing is about to invest in building. ” Yesterday, a person from the office of Chongqing Changlong Industry (Group) Co., Ltd. (hereinafter referred to as “Changlong Company”) confirmed this to The First Financial Daily. Under its three-year investment plan, Changlong Company will cultivate sweet potatoes on an area of 550,000 mu; it is also the first pharmaceutical company in China to announce its intention to enter the energy sector. According to an informed source in Chongqing, Changlong Company’s move is aimed at addressing the current situation of tight international crude oil supplies and high oil prices; the two projects in Chongqing that are intended for the production of ethanol gasoline are both awaiting approval from the National Development and Reform Commission. Ethanol, commonly known as alcohol, is fuel ethanol produced from grains and various plant fibers. When this fuel ethanol is mixed with regular gasoline in a certain proportion, ethanol gasoline is created. According to calculations, the net profit margin from sweet potato cultivation is 20%, while for investment in drug development, the profit margin is only around 5%, plus the investment period is much longer. However, the aforementioned individuals denied the question of whether the group is shifting from the pharmaceutical industry to the energy sector as a result. “The pharmaceutical industry has consistently generated substantial profits for the group, and it still does so today; therefore, it is premature to conclude that the group is shifting its core business focus. ” Pharmaceutical analysts believe that Changlong already had plans to grow sweet potatoes, which is also part of the company’s agricultural operations; taking advantage of Chongqing’s initiative to conduct trials with ethanol-based gasoline makes it easy to understand why they entered this field. In fact, domestic pharmaceutical companies are turning to other areas in order to find new sources of profit; Changlong is not the first one to do so. In 2007, the profit growth for many listed pharmaceutical companies came from these non-core business areas.