The mission of CAON is to maximize the shareholder value by becoming a leading green architectural products manufacturer in China, in terms of production capacity, operating efficiency and selected regional market dominance.

To achieve this, we plan to adopt the following business strategies:

(1) strengthen our market position in our key regional market through capacity expansion and leverage its strengths to increase its market share in other selected markets.

We intend to strengthen our position in our key regional market through the strategic expansion of production facilities and to extend our sales network in key market. We also plans to leverage our existing market positions and experience in a number of key cities and provinces in China by entering into profitable markets at an early stage, as we have done in developing our key markets, the Harbin City.

We plan to construct new production lines through investment, centralize our procurement processes, establish sales networks and production facilities located in close proximity to one another and leveraging our "SF Synthetic Material'' brand name to promote product sales. We plan to construct two formwork production lines with a total annual capacity of [ million] tons in Inner Mongolia Autonomous Region Region and Tianjin Municipality in 2008 and early 2009 respectively. In addition, we also plan to construct two formwork and pallet production lines with a total annual capacity of [ ] million tons in Guangdong and Hainan provinces in 2010.

(2) Increase sales and marketing activities and strengthen our distribution network

CAON’s sales and marketing activities are focused on increasing our market presence and share in selected key markets and developing strong relationships with its customers by delivering high quality architectural products.

We plan to enhance the efficiency of our sales network by recruiting more sales personnel, increasing the number of retail outlets that sell our products and expanding the geographic coverage of our sales network.

We plan to strengthen our long-term relationships with major customers by continuing to offer personalized services, including frequent visits to customers to collect customers' feedback, promptly responding to customers' inquiries and providing attentive after-sales support. In addition, we endeavor to further strengthen our "SF Synthetic Material” brand name and our reputation for providing high-quality green architectural products in our target markets.

(3) Improve operational efficiency in our production process and reduce production cost

We intend to improve our operational efficiency by ensuring the thorough integration of our purchasing, sales and marketing, accounting and management functions throughout the various production facilities of ours to reduce costs and improve synergies.

We seek to further enhance our production process technologies and increasing the utilization rates of our production facilities and continue to expand our operations at a lower level of capital investment.

We will continue our efforts to reduce our raw material costs through recycling of our own product and leveraging our economies of scale to increase our bargaining power over wasted plastic and [coal] suppliers.

(4) Continue to upgrade CAON’s product quality in order to meet customer preferences through further product and process development

As part of our commitment to continue to produce high-quality products to meet the stringent demands and needs of our customers, we intend to increase our focus on product and process development with a view to reduce operational costs and increasing efficiency in the production process. We plan to develop new product offerings like pallet and tubes based on market research, customer feedback and analysis of competitors’ product offerings and pricing structures.