Segment and Geographic Information

12 Months Ended

Dec. 31, 2011

Segment and Geographic Information [Abstract]

14.	SEGMENT AND GEOGRAPHIC INFORMATION

Business segments

The main products of the Company are cornstarch and glucose, which have almost the same production process. Both are produced from corn as raw materials while the only minor difference is that glucose is further processed from cornstarch by simply mixing up a few auxiliaries. The two products are sold to same type of customers using the same distribution method.

While the cost base is similar for the two products, the selling prices are independently determined by reference to their respective market price, which resulted in a different trend of gross profit margins of the two products as shown in the following table. The economics of scale also contributed to the overall rise of gross profit margins.


	FOR THE YEAR ENDED 31 DECEMBER
	2011			2010
	US$			US$
Revenues
Cornstarch		65,334,349			32,989,848
Glucose		12,766,226			8,934,164
Cost of sales
Cornstarch		58,165,094			28,754,128
Glucose		9,911,053			7,748,407
GPM
Cornstarch		11	%		13	%
Glucose		22	%		13	%

We believe that the deviating of the gross profit margins of the two products as determined by market prices will continue in the future.

With a similar production process and raw materials and the same type of customers and distribution methods, the cornstarch and glucose production are not individually assessed when the Company’s chief operating decision maker reviews the operation results and makes resources allocation. Therefore, it is not practical, with respect to the two products, to separate the assets information and other profit and loss information which are believed to have no relevance to the decision-making of the Company’s economic activities.

Geographical segments

All the revenue is attributed to the revenue from China.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

SMSA Treemont Acquisition Corp 10-K