Ⅰ. Project Name: Annual Slaughter of 1 Million Livestock and Integrated Meat Processing
  Ⅱ. Industrial Category: Farm Produce Processing
  Ⅲ. Type of Construction: New Construction Project
  Ⅳ. Construction Period: 2 year
  Ⅴ. Construction Scope and Scale
  ⅰ. Main construction scope includes one comprehensive production workshop, one comprehensive use workshop, one livestock awaiting slaughter workshop, one urgent slaughter workshop, one office building, one dormitory building, one boiler house, one wastewater treatment station and associated structures. Equipments include photoelectric Anaesthesia, flat conveyor, suspension automatic conveyor, pig-washing machine, pig-unloading machine, hydraulic pressure dehairer, pre-decorticate conveyor, horizontal decorticater, lifting machine, pork halves automatic convey system, bridge splitting saw, pig’s head hair shaver, paw hair shaver, gut washing machine.
  ⅱ. Capacity：To slaughter 1 million livestock annually and to develop integrated processing for meat.
  Ⅵ. Project Site: Farm Branch No.8, Hengxian Liangqi Farm, Nanning
  Ⅶ. Construction Conditions:
  ⅰ. Transportation Conditions：
  （ⅰ）Highway ：The Project site is 14km away from the intersection --Liujing toll station-- of two expressways (Guilin to Beihai, Nanning to Guangzhou), 65km away from Nanning. The highway from Liujing toll station to Hengxian secondary road is passing through Liangqi Farm new residential area，and the Project site is 500m away from the secondary road.
  （ⅱ）Railway：The Project site is 15km from Xianggui Railway Luchun Station, 18km from Liujing Station, and 3km from Liqin Railway.
  （ⅲ）Waterway：The Project site Liangqi Farm possesses an exclusive quay beside the Yujiang River, a trunk stream of the Pearl River, and the quay is 10km away from the Farm. The Yujiang River is navigable for 1000t ships throughout the year, upstream to Nanning, Baise, and downstream to Guigang, Wuzhou, Guangzhou and Hong Kong.
  ⅱ. Raw Material Supply Conditions：
  （ⅰ）Principal Material Supply：The Project needs 1 million live pigs annually. Yongxin Animal Husbandry of Guangxi State Farm Co., Ltd., a stock company, is a professional group company of Guangxi State Farm Bureau. Currently it has the biggest farm of original breed pigs, 4 large-scale lean-meat pig farms, which can fully ensure the supply of live pigs to the Project.
  （ⅱ） Fuel Supply：Based on the production needs, the Project will be equipped with a 2-ton boiler. Coal or fuel oil can be selected as fuel. Considering oil is expensive but with little pollution and small consumption, therefore, fuel oil boiler is chosen for the Project. The annual amount of fuel oil consumed is 250t, and the oil is transported through highway.
  Ⅷ. Total Investment and Capital Composition：
  The total investment is RMB 79.14 million, of which, investment in fixed assets is RMB44.65 million, circulating funds takes up RMB 34.49 million. Of the investment in fixed assets of RMB44.6546 million (including interest during construction for RMB 642,200), civil works investment takes up RMB 16.779 million, machine equipment investment takes up RMB 12.7458 million, installation project investment takes up RMB 4.3027 million, other expenses take up RMB 10.8271 million. After the Project is completed and put into operation, the annual circulating fund is RMB34.4842 million for normal years running with full capacity.
  Ⅸ. Capital Source:
  State investment RMB10million, self-financing RMB10million, and inviting funds RMB59.14million
  Ⅹ. Pattern of Cooperation: Sole investment, co-operation
  Ⅺ. Analysis on Market and Anticipated Economic Benefits
  ⅰ. Analysis on Market
  With social development and improvement of the living standard, people’s demand for meat is growing. Meat and related products present diversity and high additional values. Primary processing of pork develops from fresh warm pork processing to chilled pork processing. “Segmentation + refrigeration” is the main trend of development. According to analysis, currently when production of primary-processed products (fresh warm pork) reaches 50% of the design capacity, the profit rate is only about 1%, while chilled pork profit rate is 2 to 3%, the profit of fine-processed pork products is 8 to 10%. Products with high additional value plus brand and market operation enable such products to have more room for profits. With the presence of chilled meat appearing in big and medium cities in recent years, a meat consumption structure in China presents the situation of “fresh meat spreading around the world, frozen meat competing for the world, and chilled meat leading the world”. Today when people pay more attention to food safety, chilled meat can lead the world alone by itself and has attracted more and more consumers. An industry study conducted by Minglue Market Scheme (Shanghai) Co., Ltd. demonstrates that in developed cities in China where people have high income, chilled meat has taken up 10% to 15% of the per capital annual consumption of meat and this figure has gone up to 50% to 60% in some small scope in Hangzhou City zone.
  Statistical data indicates that the monthly per capita meat consumption reaches 2.59kg in Guangxi, ranking the first place in China. The population in Nanning is 2.4 million, with a floating population of about 0.3 million and every day 1800 to 2300 pigs are slaughtered. Supplies to the market in Nanning is mostly fresh meat, covering 95% of the total. Chilled meat is mainly provided to schools, public institutions and departments as well as restaurants. The Project can supply to the markets in Nanning, Liuzhou, Beihai and nearby markets with chilled meat. Moreover, because advanced production technique and management approach are adopted and special vehicles are employed to deliver products, the product quality is guaranteed. A total of 14625t of chilled meat will be produced annually after the Project is completed, with an average supply to market of 40t per day (one year is calculated as 365 days).
  In the international market, with China’s entry to the WTO, the European Union will open 5% of its total meat demand market to the third world nations like China. Tax reduction and easing of policy restriction will provide a good opportunity for our country to earn more foreign currency through meat export. On the other hand, for some third world nations with heavy demand for imported meat and related meat products, we can export out product to their markets with our advantages in low price, special flavor and unique packing. Hong Kong is going to forbid entry of live pigs, and in the future slaughtered lipg and frozen pork should be frozen to 0℃～4℃ before they are allowed to be exported to Hong Kong. Therefore there is certain sales room in Hong Kong and Macao markets for the products of the project.
  ⅱ. Anticipated Economic Benefits：
When the Project is completed and put into operation, product sales income will reach RMB 341.32million yearly, with an annual value added tax amount of RMB 24.63 million, a sales tax and surtax of RMB 1.97 million, the enterprise income tax of RMB 6.15 million, and the annual profit of RMB 18.6341. The investment profit rate is 23.55%, with an investment tax rate of 57.16%, capital profit rate of 38.18%, and an investment recovery period of 5.78 years (after tax). The various indexes of the Project are fairly good with high return rate. Meanwhile, the Project will bring along development in related industries.
  Ⅻ. Progress of Preparation Work: The Feasibility Study Report and the Designation of Site have been completed.
  XIII. Project Competitive Advantages
  ⅰ. The project owner has a good base for breeding lean-type pigs with pollution-free standard. Since 1980, Guangxi State Farm has bred foreign-origin lean-type pigs, in accordance with standards for pollution-free Farm Produces (animal husbandry) standard in production organization and the production has passed random inspections and overall checks and acceptances by the relevant provincial departments. The practice of selection of boar, self-breeding, self-raising, and feedstuff processing is honored in the production. In accordance with pollution-free production standard, a set of completed pollution-free production line is established through employing modern administrative process and supporting technology, and fixed production process.
  For many years, a portion of live pigs have been supplied to the markets in Hong Kong and Macao by the project owner and Guangxi Entry & Exit Inspection and Quarantine Bureau has kept a record of the enterprise qualified for supply of fresh and frozen slaughtered pigs to Hong Kong and Macao. The supplied live pigs and frozen meat that satisfy the standard of supply to Hong Kong.
  ⅱ. There are many modern large-scale pigs breeding farms. Various farms of Guangxi State Farm Group have over 50 years of experience in herd breeding of pigs and scaled pig breeding enterprises have been established on the farms. International and domestic advanced technology of intensivism pig breeding is well digested by the group in their production. Guangxi State Farm Group is a system with the most modern farms, and the highest level in specialization and industrialization in pig raising technology and management in Guangxi, with principal production technical index in keeping with advanced level of that of the world developed nations. The Group has rich and extensive practical experience in hoar selective breeding, facility construction, breeding administration, epidemic disease prevention and cure, and feedstuff production. It has attained 16 scientific research achievements, of which 11 are of provincial and ministerial level, 5 are of prefecture and departmental level. Good economic and social benefits are achieved through promotion and application of high quality breeds. The Group establishes twelve feedstuff plants producing annually an amount of assorted feedstuff of 200,000t, feedstuff used by the Group base + farmer households is all provided by these plants, thereby ensuring feedstuff safety. Every year 60,000 live pigs are supplied to Hong Kong and Macao.
  ⅲ. A sound high-quality breed reproduction system has been established with modern advanced supporting technology. Yongxin pig breeding farm, an affiliated company of Guangxi State Farm Group, is a pig farm established in accordance with the standards by the Ministry of Agriculture and modern pig breeding process for livestock breeding. A total of 85,000 pigs are bred annually, and the number of live pigs at the end of the year is 38,000, of which 4500 are sow breeds and 2369 are full-blooded original breeding sows. In order to satisfy the market demand, 247 pigs of SPF genuine breed were introduced from Canada in 1998. 78 pigs of SPF genuine breed were introduced from Denmark in 2001, a total of 315 pigs of SPF genuine breed were introduced. Yongxin breed pigs have the remarkable characteristics of good shape, growing fast, good reproduction performance, high use of feedstuff, high rate of lean meat. Breed pigs are sold to Hainan, Guangdong, Hunan, Guizhou, Yunnan and various areas in Guangxi.
  Guangxi State Farm Group plans to breed 1 million lean meat foreign breed pigs by the year 2005 and supply more than 30,000 lean meat full-blooded pigs to Guangxi market every year. With a strong market competitive power, the lean meat pigs produced by Guangxi State Farm Group are becoming more and more popular with foreign buyers and there is a bright prospect for the sale with smoother sales channels.
  XIV. Project Owner
  Guangxi State Farm Yongxin Animal Husbandry Co., Ltd., an affiliated company of Guangxi State Farm Bureau, was founded in December 1997. It is a large-scale state-owned share holdings legal entity contributive by 9 shareholders. The Company’s registered capital is RMB46.82 million with the total assets of RMB190million.
  The Company integrates self-breeding, self-raising, and breeding, feedstuff processing and sales of breed pigs and commodity pigs all in one operation. It is currently the biggest animal husbandry enterprise in Guangxi, with 0.3 million heads of commercial pigs and 30,000 heads of breed pigs annually, and a feedstuff plant with an annual process capacity of 20ton. The Company’s total sales income exceeds RMB300million. In 2003, the total sales income of the company was RMB210million, with a profit of RMB10.29 million. In 2004, the total sales income was RMB320 million, increasing by 152% as compared with that of 2003, with a profit of RMB20 million, increasing by 194% as compared with that of 2003.
  XV. Contact
  Contact Person：Huang Yongqian
  Tel ：86-771-7350177