DISPOSAL OF ASSETS AND CONNECTED TRANSACTIONS CONTINUING CONNECTED TRANSACTION

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1 The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Incorporated in Hong Kong with limited liability) (Stock Code: 606) DISPOSAL OF ASSETS AND CONNECTED TRANSACTIONS CONTINUING CONNECTED TRANSACTION DISPOSAL OF ASSETS AND CONNECTED TRANSACTIONS On 27 June 2008, COFCO Eastbay Oils & Fats Industries (Guangzhou) Co., Ltd. ( Eastbay ) entered into the Eastbay Asset Sale Agreement with Zhangjiagang CPMC Co., Ltd. ( Zhangjiagang CPMC ). On the same date, East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. ( East Ocean ) entered into the East Ocean Asset Sale Agreement with Zhangjiagang CPMC. Under the Eastbay Asset Sale Agreement and the East Ocean Asset Sale Agreement (collectively, Asset Sale Agreements ), Eastbay and East Ocean (collectively, the Vendors ) agreed to sell, and Zhangjiagang CPMC agreed to purchase, certain assets relating to the Vendors business in the manufacture of steel barrels and rectangular cans. Eastbay and East Ocean are both non-wholly owned subsidiaries of the Company. As at the date of this announcement, COFCO Limited ( COFCO ), through COFCO (Hong Kong) Limited and its associates, holds approximately 57.67% of the Company s issued share capital, and hence, COFCO is the controlling shareholder of the Company. As Zhangjiagang CPMC is ultimately wholly owned by COFCO, Zhangjiagang CPMC is therefore a connected person of the Company. Accordingly, the Asset Sale Agreements and the transactions contemplated thereunder constitute connected transactions of the Company under the Listing Rules. CONTINUING CONNECTED TRANSACTIONS On 27 June 2008, Eastbay and Zhangjiagang CPMC entered into Eastbay Lease Agreement, and East Ocean and Zhangjiagang CPMC entered into East Ocean Lease Agreement. From their effective dates, transactions under the Eastbay Lease Agreement and East Ocean Lease Agreement with respect to certain properties leased by the Vendors to Zhangjiagang CPMC constitute continuing connected transactions which are exempt from the reporting, announcement and shareholders approval requirements under the Listing Rules.

2 On 27 June 2008, the Company entered into the Supply Agreement with CPMC (Hong Kong) Limited to purchase steel barrels and rectangular cans from the subsidiaries of CPMC (Hong Kong) Limited, a wholly owned subsidiary of COFCO and a connected person of the Company. From the effective date of the Supple Agreement, the transactions under the Supply Agreement will constitute continuing connected transactions which are subject to the reporting and announcement requirements but are exempt from the independent shareholders approval requirement under the Listing Rules. DISPOSAL OF ASSETS AND CONNECTED TRANSACTIONS Eastbay Asset Sale Agreement Date: 27 June 2008 Parties: (i) Eastbay, as vendor; and (ii) Zhangjiagang CPMC, as purchaser. Principal terms Pursuant to the terms of the Eastbay Asset Sale Agreement, Eastbay agreed to sell, and Zhangjiagang CPMC agreed to purchase, certain of Eastbay s assets relating to its business in the manufacture of steel barrels (the Eastbay Assets ). The Eastbay Assets include (i) machinery and electronic equipment; (ii) inventory; (iii) raw materials; and (iv) existing business contracts relating to the steel barrel business (the Eastbay Business Contracts ). Eastbay must transfer the Eastbay Assets, apart from the existing Eastbay Business Contracts, to Zhangjiagang CPMC, at 10:00am on the day immediately following the date on which all necessary internal approvals from both parties have been obtained (the Eastbay Delivery Date ). The consideration under the Eastbay Asset Sale Agreement is RMB12,458, which is payable in cash in two equal tranches: (1) RMB6,229, before 30 June 2008; (2) RMB6,229, before 31 August Eastbay must procure the counterparty of each of the Eastbay Business Contracts to enter into a transfer agreement with Zhangjiagang CPMC and Eastbay, pursuant to which all of Eastbay s rights and obligations under the Eastbay Business Contracts will be transferred to and assumed by Zhangjiagang CPMC and the counterparties agree, from the effective date of the transfer agreement, to release and discharge Eastbay from the Eastbay Business Contracts. Eastbay must terminate its service contracts with certain employees employed in the steel barrel business within 10 working days after the Eastbay Delivery Date. Subsequently, Zhangjiagang CPMC must enter into service contracts with such employees with terms and conditions satisfactory to such employees and Zhangjiagang CPMC. Eastbay also agree that they will not recruit such employees without prior written consent from Zhangjiagang CPMC. Basis of Determination of Consideration The aggregate consideration of RMB12,458, for the Eastbay Assets was arrived at after arm s length negotiations between Eastbay and Zhangjiagang CPMC. Vocation (Beijing) International Asset

3 Assessment Co., Ltd., an independent appraiser, conducted an asset appraisal for the machinery and electronic equipment based on the replacement cost method. According to the appraisal, the values for the machinery and electronic equipment as at 31 October 2007, being RMB3,644,560.00, was lower than the then book values which was RMB6,699, In arriving at the consideration for the transfer of the Eastbay Assets, after considering the fair market value and the values of the Eastbay Business Contracts which comprise part of the Eastbay Assets, both parties agreed to refer to the aggregte amount of (i) the book values of machinery and electronic equipment as at 31 October 2007; and (ii) the book values of the inventory and raw materials as at 31 January The Directors, including the independent nonexecutive Directors, believe that the consideration is fair and reasonable insofar as the interests of the Company and its shareholders as a whole are concerned. Financial Information The table below sets out certain financial information on the Eastbay Assets for the financial years ended 31 December 2006 and 31 December 2007 all prepared in accordance with HKFRS: Attributable to Attributable to Eastbay Assets Eastbay Assets for the year ended for the year ended 31 December December 2007 (RMB) (RMB) Total assets 14,890,60 11,068,357 Profit before taxation and extraordinary items 4,310,401 1,678,904 Net profit after tax and extraordinary items 3,207,769 1,312,983 Based on the consideration and the book value of Eastbay Assets, it is estimated that, upon the completion of the disposal of Eastbay Assets under the Eastbay Asset Sale Agreement, the Group will record a gain of RMB1,007,605 (subject to audit). East Ocean Asset Sale Agreement Date: 27 June 2008 Parties: (i) East Ocean, as vendor; and (ii) Zhangjiagang CPMC, as purchaser. Principal terms Pursuant to the terms of the East Ocean Asset Sale Agreement, East Ocean agreed to sell, and Zhangjiagang CPMC agreed to purchase, certain of East Ocean s assets relating to its business in the manufacture of steel barrels and rectangular cans (the East Ocean Assets ). The East Ocean Assets include (i) machinery and electronic equipment; (ii) inventory; (iii) raw materials; and (iv) existing business contracts relating to the steel barrel and rectangular can business (the East Ocean Business Contracts ). 3

4 East Ocean must transfer the East Ocean Assets, apart from the existing East Ocean Business Contracts, to Zhangjiagang CPMC, at 10:00am on the day immediately following the date on which all necessary internal approvals from both parties have been obtained (the East Ocean Delivery Date ). The consideration under the East Ocean Asset Sale Agreement is RMB19,809, which is payable in cash in two equal tranches: (1) RMB9,904, before 30 June 2008; (2) RMB9,904, before 31 August East Ocean must procure the counterparty of each of the East Ocean Business Contracts to enter into a transfer agreement with Zhangjiagang CPMC and East Ocean, pursuant to which all of East Ocean s rights and obligations under the East Ocean Business Contracts will be transferred to and assumed by Zhangjiagang CPMC and the counterparty agree, from the effective date of the transfer agreement, to release and discharge East Ocean from the East Ocean Business Contracts. East Ocean must terminate its service contracts with certain employees employed in the steel barrel and rectangular can business within 10 working days after the East Ocean Delivery Date. Subsequently, Zhangjiagang CPMC must enter into service contracts with such employees with terms and conditions satisfactory to such employees and Zhangjiagang CPMC. East Ocean also agreed that they will not recruit such employees without prior written consent from Zhangjiagang CPMC. Basis of Determination of Consideration The aggregate consideration of RMB19,809, for the East Ocean Assets was arrived at after arm s length negotiations between East Ocean and Zhangjiagang CPMC. Vocation (Beijing) International Asset Assessment Co., Ltd, an independent appraiser, conducted an asset appraisal for the machinery and electronic equipment based on the replacement cost method. According to the asset appraisal, the value for the machinery and electronic equipment as at 31 October 2007, being RMB3,385,428.00, was lower than the then book value which was RMB8,295, In arriving at the consideration for the transfer of the East Ocean Assets, after considering the fair market value and the values of the East Ocean Business Contracts which comprise part of the East Ocean Assets, both parties agreed to refer to the aggregate amount of (i) the book values of machinery and electronic equipment as at 31 October 2007; and (ii) the book values of the inventory and raw material as at 31 January The Directors, including the independent non-executive Directors, believe that the consideration is fair and reasonable insofar as the interests of the Company and its shareholders as a whole are concerned. Financial Information The table below sets out certain financial information on the East Ocean Assets for the financial years ended 31 December 2006 and 31 December 2007 all prepared in accordance with HKFRS: 4 Attributable to Attributable to East Ocean Assets East Ocean Assets for the year ended for the year ended 31 December December 2007 (RMB) (RMB) Total assets 1,399,705 17,993,834 Profit before taxation and extraordinary items 6,979,203 3,184,953 Net profit after tax and extraordinary items 5,917,893 2,707,881

5 Based on the consideration and the book value of the East Ocean Assets, it is estimated that, upon the completion of the disposal of East Ocean Assets under the East Ocean Asset Sale Agreement, the Group will record a gain of RMB840,727 (subject to audit). Non-Competition Undertakings Under the Asset Sale Agreements, each of Eastbay and East Ocean has undertaken to Zhangjiagang CPMC that, from the execution date of each of the Eastbay Asset Sale Agreement and East Ocean Asset Sale Agreement, (i) it will not engage in any business which competes with the steel barrel and rectangular can business conducted by Zhangjiagang CPMC without its prior written consent; (ii) it will not, solely or jointly with any third parties, directly or indirectly, solicit customers, suppliers or employees of Zhangjiagang CPMC relating to steel barrel and rectangular can business; and (iii) it will inform and offer to Zhangjiagang CPMC any business opportunities it receives relating to the steel barrel and rectangular can business. Reasons for and Benefits of the Entering into the Asset Sale Agreements The manufacture and sale of the steel barrels and rectangular cans is non-core business of the Company. Disposal of assets relating such business will enable the Group to streamline its businesses and focus its resources and management on its core businesses which include, among other things, oilseed processing. The sale proceeds from the disposal of Eastbay Assets and East Ocean Assets under the Asset Sale Agreements would be used as additional working capital to the Group. Listing Rules Implications As at the date of this announcement, COFCO, through COFCO (Hong Kong) Limited and its associates, holds approximately 57.67% of the Company s issued share capital, and hence, COFCO is the controlling shareholder of the Company. Zhangjiagang CPMC, a wholly owned subsidiary of COFCO, is therefore a connected person of the Company. Accordingly, the Asset Sale Agreements and the transactions contemplated thereunder constitute connected transactions of the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios (as defined in Rule of the Listing Rules) for the transactions under the Asset Sale Agreements, in aggregate, is more than 0.1% but less than 2.5%, the Asset Sale Agreements are subject to the reporting and announcement requirements set out in rules 14A.45 and 14A.47 of the Listing Rules but exempt from the independent shareholders approval requirement. The Directors, including the independent non-executive Directors, believe that the terms of the Asset Sale Agreements are on normal commercial terms which are fair and reasonable insofar as the interests of the Company and its shareholders as a whole are concerned. 5

6 CONTINUING CONNECTED TRANSACTIONS Lease of properties As the Eastbay Assets and East Ocean Assets under the Asset Sale Agreements are located in the plants which are owned by the Vendors, Vendors have agreed to lease such plants to Zhangjiagang CPMC for its operations of the steel barrel and rectangular can business. On 27 June 2008, Eastbay and Zhangjiagang CPMC entered into a lease agreement (the Eastbay Lease Agreement ) for a period of two years in order to lease the properties owned by Eastbay to Zhangjiagang CPMC for the production in relation to its steel barrel business. The monthly rental is RMB35, which was determined on normal commercial terms by reference to current market values. The Eastbay Lease Agreement will take effect from the Eastbay Delivery Date. On 27 June 2008, East Ocean and Zhangjiagang CPMC entered into a lease agreement (the East Ocean Lease Agreement ) for a period of two years in order to lease the properties owned by East Ocean to Zhangjiagang CPMC for the production in relation to its steel barrel and rectangular can business. The monthly rental is RMB21, which was determined on normal commercial terms by reference to current market values. The East Ocean Lease Agreement will take effect from the East Ocean Delivery Date. The transactions under the Eastbay Lease Agreement and East Ocean Lease Agreement constitute continuing connected transactions of the Group under Chapter 14A of the Listing Rules. As the applicable percentage ratios (as defined in Rule of the Listing Rules) for the aforesaid continuing connected transactions as calculated in aggregation on an annual basis is less than 0.1%, such lease agreements are exempt from the reporting, announcement and independent shareholders approval requirements under the Listing Rules. Purchase of steel barrels and rectangular cans Before the disposal of Eastbay Assets and East Ocean Assets, certain steel barrel and rectangular cans manufactured by the Vendors were supplied to the Group for its own bulk oil business as oil containers. After the disposal, the Group will continue purchasing such steel barrels and rectangular cans for its use in bulk oil business. On 27 June 2008, the Company entered into a framework supply agreement with CPMC (Hong Kong) Limited (the Supply Agreement ). Under the Supply Agreement, the subsidiaries of CPMC (Hong Kong) Limited shall supply to the Group the steel barrels and rectangular cans at the prevailing market price for a term of three years from its effective date which is the later of the Eastbay Delivery Date or East Ocean Delivery Date. The Supply Agreement was entered into on normal commercial terms which can be renewed by mutual agreement between both parties. The Company will comply with the requirements under Chapter 14A of the Listing Rules when the Supply Agreement is renewed. Prior to the entering into the Supply Agreement, the Group did not purchase any steel barrels and rectangular cans from CPMC (Hong Kong) Limited. Therefore, there is no historical transaction amounts for the steel barrels and rectangular cans supplied by CPMC (Hong Kong) Limited to the Group.

7 It is expected that the annual aggregate values of the steel barrels and rectangular cans to be supplied for the three years ending 31 December 2010 under the Supply Agreement will not exceed RMB8,690,000, RMB20,960,000 and RMB24,540,000 respectively, and the aggregate value for the six months ending 30 June 2011 will not exceed RMB13,395,000, assuming the Supply Agreement would be terminated on or around 30 June In arriving at such caps, the Company has considered its existing usage of steel barrels and rectangular cans, the prospective increase of the Group's purchases of steel barrels and rectangular cans and the trend of the market prices of such products. CPMC (Hong Kong) Limited is wholly owned by COFCO and therefore is a connected person of the Company. From the effective date of the Supply Agreement, the transactions under the Supply Agreement constitute continuing connected transactions of the Group under Chapter 14A of the Listing Rules. As the percentage ratios (as defined in Rule of the Listing Rules) with respect to the continuing connected transactions as calculated in aggregation on an annual basis is more than 0.1% but less than 2.5%, the Supply Agreement is subject to the reporting and announcement requirements set out in Rules 14A.45 and 14A.47 of the Listing Rules but are exempt from the independent shareholders approval requirement under the Listing Rules. The Company believes that the arrangement under the Supply Agreement on a continuing basis will be beneficial to the Company and will provide greater certainty to the Company s operations. The Directors, including the independent non-executive Directors, believe that the terms of the Supply Agreement were entered into in the ordinary and usual course of business of the Group and on normal commercial terms which are fair and reasonable insofar as the interests of the Company and its shareholders as a whole are concerned. INFORMATION ON THE VENDORS AND ZHANGJIAGANG CPMC The Vendors, being non-wholly owned subsidiaries of the Company, are limited liability companies established under the laws of the PRC, which are both mainly engaged in the business of oil processing, sale of edible oil and trading. Zhangjiagang CPMC, a wholly owned subsidiary of COFCO, is a limited liability company established under the laws of the PRC, which is primarily engaged in the business of manufacturing and sale of metal containers and packaging materials. CPMC (Hong Kong) Limited, a wholly owned subsidiary of COFCO and 100% equity interest holder of Zhangjiagang CPMC, is a limited liability company established under the laws of Hong Kong, which is an investment holding company. DEFINITIONS Board the board of the Directors COFCO COFCO Limited ( 中糧集團有限公司 ) Company China Agri-Industries Holdings Limited ( 中國糧油控股有限公司 ), a company incorporated on 18 November 2006 with limited liability under the laws of Hong Kong 7

8 Director(s) Eastbay Eastbay Asset Sale Agreement East Ocean East Ocean Asset Sale Agreement Group HKFRS Listing Rules PRC RMB Vendors Zhangjiagang CPMC the director(s) of the Company COFCO Eastbay Oils & Fats Industries (Guangzhou) Co, Ltd ( 中糧東洲糧油工業 ( 廣州 ) 有限公司 ), in which the Company holds a 89.4% equity interest the asset sale agreement entered into between Eastbay and Zhangjiagang CPMC East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. ( 東海糧油工業 ( 張家港 ) 有限公司 ), in which the Company holds a 54% equity interest the asset sale agreement entered into between East Ocean and Zhangjiagang CPMC the Company and its subsidiaries Hong Kong Financial Reporting Standards The Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited People s Republic of China Renminbi, the lawful currency of the PRC Eastbay and East Ocean Zhangjiagang CPMC Co., Ltd ( 張家港中糧包裝有限公司 ), a wholly owned subsidiary of COFCO Limited By Order of the Board China Agri-Industries Holdings Limited Yu Xubo Managing Director Hong Kong, 27 June 2008 As at the date of this announcement, the Board comprises: Mr. Ning Gaoning as an non-executive director and chairman of the Board, Mr. Yu Xubo, Mr. Lu Jun and Mr. Yue Guojun as executive directors; Mr. Chi Jingtao and Mr. Ma Wangjun as non-executive directors; and Mr. Lam Wai Hon, Ambrose, Mr. Victor Yang and Mr. Patrick Vincent Vizzone as independent non-executive directors. 8