Ⅰ.Project Background

SPF is the abbreviation of Specific Pathogen Free. SPF chicken are the chicken flocks that are raised in barrier system or isolator, with basically stable genetic character, the qualified blood test, favorable capability of growth and reproduction, as well as specific pathogen free and healthy breeder flock. This kind of breeder flock neither carry specific pathogenic microorganisms nor have a history of epidemic disease, hence they are healthy flock in the real sense. The eggs produced by such a flock are called SPF hatching eggs. SPF chickens are popular in the world for the important function that SPF breeder flock, SPF chicks, especially SPF chick embryos perform in producing bacteria.

China is a large eggs and meat producer in the world, ranking the first or second. The domestic market is becoming saturated gradually, so the export has become an important factor affecting the development of poultry farming. At present, China’s total production of meat is more than 12 million ton, but the export amount is only 0.4 million ton, with the proportion of 3%. The main cause that China’s eggs and meat could not share more market proportion is the problem of epidemic disease and immune defense.

The total amount of poultry of China ranks the first in the world; therefore the need for poultry vaccine also ranks the first in the world, hundreds of billions of portions each year. The quality of vaccine becomes the most important thing. Most poultry vaccines are made of chick embryos. Therefore, high quality poultry vaccines can not be produced without clean chick embryos which are the basis of producing and developing poultry vaccine. In terms of this point, compared with Britain, US, Japan etc., China has been fallen behind nearly 15 years.

In June, 2002, the Ministry of Agriculture made No. 202 Proclamation which formulated the enforcement of veterinary drugs GMP from 1 January, 2006. The Veterinary Bureau of Ministry of Agriculture inspects live poultry vaccines according to GMP, which formulates that the manufacturer must use SPF eggs to produce vaccines. The manufacturers of animal biological products will need about 400 million of SPF hatching eggs. At present, there are 7 companies producing SPF hatching eggs. Their maximum production is 12.45 million. However, market has openings of 27 million of hatching eggs. Constructing more SPF poultry farm, increasing the quantity and improving the quality to meet the needs of manufacturers are imminent.

II. Construction Scale and Production Plan

Construction Content: SPF henhouse, storehouse, power distribution room, quality control area.

Construction Goal: 10 SPF henhouses(about 1700㎡), each house with 4000 layer hens and 2500 brooding hens.

Product Plan: 38,000 eggs/day×220days/year=8.36 million eggs (maximum 40,000 hens)

III. Market Analysis and Economic Benefit Forecast

Economic Benefit: when put into operation, sales of the project will reach RMB 58.76 million Yuan, profits RMB 27.40 million Yuan, and tax RMB 5.61 million Yuan.

Social Benefit: the project will produce 8.36 million SPF eggs and 31,865 chickens, which will make a contribution to local economic development. Moreover, the project will bring local people 71 job opportunities and wage income RMB 1.28 million Yuan every year, which will improve local residents’ living condition. In addition, the project will consume feeding stuff 1,561 ton every year, which will promote the local feeding stuff industry and transform grains to industrial products.

Iv. Total Project Investment and Financing Arrangement

Total investment: RMB 103.89 million Yuan, fixed assets investment: RMB 101.46 million Yuan, interest incurred during construction: RMB 1.25 million Yuan, and initial working capital: RMB 1.18 million Yuan.

Financing arrangement: apply for bank loan RMB 36 million Yuan, foreign investment: RMB 30 million Yuan, and self-financing capital: RMB 37.89 million Yuan.

V. Cooperation Ways

Technical cooperation

VI. Foreign Investment and Constitution

Funds

VII. Project Construction Venue

Yushucha Village, Fumin Town, Hunan County, Jilin Province.

VIII. Project Progress

The project has completed 3 henhouses which have been put into production. The breeding work is in good condition.

IX. Outline of Project Organizer

Jilin Zhuoyue Industry Corporation Ltd. is one of the national key leading enterprises in agriculture industrialization, also one of the earlier large enterprises in poultry farming. The company covers an area of 2,000,000㎡ and has a large number of workers. After recent years of market-oriented operation, the company has integrated breeder flock raising, hatching, chicken raising, feeding stuff producing as well as chicken products of development, process, sale and transportation into a system mode of agriculture industrialization. Verified by the Ministry of Agriculture, the company has been defined as one of the demonstration enterprises in processing of agricultural products. The company has passed the authentication of ISO9001 Quality Management System, ISO14001Environment Control System, HACCP Food Safety Management System, Occupational Health and Safety Management System and QS Quality Safety Market Access etc..The major products have passed the test of Development Center of Food and the Ministry of Agriculture, and have been identified as Organic Food, Green Food and Pollution-Free Agriculture Products. With several years of scientific management and key projects construction, the company has fostered a good and healthy image, and has AA credit rank.

X. Contact Methods

Contact Person: Zhang Li (Vice-general Manager)

Tel: 0086-435-6989006