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1. Project Name: Project of Chinese Herbal Medicine and Chinese Herbal Extract Processing, Tieli Farm, Heilongjiang Province

2. Location for Construction of the Project: Tieli Farm Industrial Park, Heilongjiang Province

3. Profile of the Project Principal:

綏化農墾局招商網訊：Tieli Farm is located in a mixed farming and forest area at the south foot of the Lesser Hinggan Mountains. The place neighbors vast woodlands in the east and adjoins fertile plain in the west. The place is surrounded by mountains and waters, forming superior ecological conditions. The local conditions are especially suitable for the growth of northern medicinal herbs. Now the farm owns 15,400 mu of fritillary bulbs, 4,000 mu of milk thistle, 1,500 mu of Chinese magnoliavine, 750 mu of hard-stalk astragalus and about one thousand mu of asarum, pilose asiabell, ledebouriella, indigowoad, etc. About one hundred varieties of wild Chinese medicinal herbs, such as ginseng, eleutherococcus senticosus, astragalus and sophora flavescens are available through purchase on market. The annual output of fresh Chinese medicinal herbs is more than 9,000 tons. Now the planned area of the farm for growing Chinese medicinal herbs has exceeded 30,000 mu. Cities and counties densely scatter around Tieli Farm. The local transport system is well developed. There is a big potential for promotion of the northern medicinal herb planting.

4. Project Construction:

The project is constructed on a land area of 58,000 square meters. The building area is 4,000 square meters for the Chinese herbal medicine workshop, 1,900 square meters for the Chinese medicine extraction workshop, 500 square meters for the boiler room, 4,000 for the warehouse, 1,000 square meters for the offices, 600 square meters for the laboratory. There is one 4000-ton Chinese herbal medicine production line and one Chinese medicine extract production line with processing capacity of 1,500 tons per year.

5. Product Composition, Source of Raw Materials and Market Situation

Product Composition: 4,000 tons of Chinese herbal medicines, such as fritillary bulbs, Chinese magnoliavine, ginseng, indigowoad and balloonflower; and 74 tons of extracts from fritillary bulbs, evening primrose, pueraria root, camptothecin, angelica, red sage root, astragalus, indigowoad, tetrahydropalmatine and other Chinese medicinal extracts.

Source of Raw Materials: Tieli Farm is a big farm in Chinese medicinal herb planting. Now the farm owns 15,400 mu of fritillary bulbs, 4,000 mu of milk thistle, 1,500 mu of Chinese magnoliavine, 750 mu of hard-stalk astragalus and about one thousand mu of asarum, pilose asiabell, ledebouriella, indigowoad, etc. About one hundred varieties of wild Chinese medicinal herbs, such as ginseng, eleutherococcus senticosus, astragalus and sophora flavescens are available through purchase in the area near the farm. The area for growing Chinese medical herbs has reached 200,000 mu in the Administration.

Market Situation: At the same time, when the advantage of this project in production scale in the same trade in the northern regions is verified, the project keeps foothold on the Chinese medicine markets of this province and the Northeast China. At the same time when we continue to develop domestic Chinese medicine market, we also take active measures to develop important markets in KOR, Japan, India and other neighboring countries.

6. Estimate on Investment in the Project

       It is planned to invest 81 million Yuan in total in the project. The project is expected to be completed in 2012. The profit rate of investment will be 31.58%. The payback period for the project will be 3.98 years in terms of before-income-tax or 4.65 years in terms of after-income-tax. The project can provide 815 work vacancies. 

7. Analysis on Economic Benefits of the Project

After this project is put into operation, the product sales revenue can be increased by 265.25 million Yuan, the tax increased by 15.8602 million Yuan and profit increased by 25.5775 million Yuan per year.

8. Patterns of Cooperation: Joint venture or cooperation