I. Project Background

1. Project Name: Jilin Jurun Biotechnology Co., Ltd’s functional soy protein peptide project (annual capacity 100,000 tons)

2. The Necessity of the Project: China is a nation with large population, as a result, a big producer of cultured animals and feed. However, due to the limited land, seed and labor resources in China, both the livestock breeding and feed processing enterprises face the shortage of raw feed materials especially high quality protein materials. Therefore, to set up this functional soy protein peptide project has a profound influence on the livestock breeding and feed processing enterprises, corn and soybean deep processing enterprises and grain security.

(1). Increase Farmers’ Enthusiasm in Planting Soybeans and Their Income

China is the cradle land for soybeans and Northeastern China is called the golden zone for soybean for it is the most appropriate region to plant soybean. But the US and Brazil has become the biggest producer and exporter of soybeans for recent years while China has become the biggest importer. Due to the impact of imported transgenosis soybeans, the local soybeans became cheaper. Therefore the soybean planters have become less enthusiastic and planting area and output of local soybeans has decreased a lot.

The main deep processing products of soybean are soybean oil and soybean meal. Thus the demand and price of these two products determines the purchase price of soybeans. If we increase the ways of usage and demand of the soybean meal, we can raise the purchase price of soybeans. Therefore the functional soy protein peptide project can increase farmers’ enthusiasm in planting soybeans and their income.

(2). Promote Healthy and Stable Development of Livestock Breeding

The development of breed and breeding technology determines the development of livestock breeding while the utility of feed determines the development of breeding technology.

Energy and Protein are the most important nutrition materials that form the feed. The protein feed is especially scarce. Soybean cake and meal are the main protein resources for the feed. Currently many domestic soybean meal producers are cutting their productions or even going bankruptcy because that soybean oil crushing enterprises are under the control of oversea grain and oil production corporations and especially because of the output reduction of the soybeans planted.

In order to reduce the instability of the livestock breeding enterprises and feed processing enterprises caused by the fluctuation of the raw material prices and sustain a healthy development of China’s breeding companies, the functional soy protein peptide will be developed and utilized which will be critical for the development of livestock breeding and even aquiculture.

(3). Ensure the safe and healthy development of feed industry

Feed industry is the pillar for livestock breeding industry and has experienced the quickest development ever since the reform and opening up of the country.  We have to solve the following two issues in order to ensure the continuous development of feed industry. One is raw material industry, the other one is safety construction. Raw material is the base of feed industry, while there are three aspects concerning feed safety:

①Antibiotics, growth promoting agents and chemosynthesis antibacterial drugs are adopted in the feed processing industry 

② By-products of animal slaughtering and processing are adopted too.

③ Zoonosis

The first one is about the pollution in livestock products and the drug fastness caused by the residual antibiotics and chemosynthesis antibacterial drugs. People are now looking for the substitutes of those chemicals. The second one can be solved by reinforcing management and public health. The third one involves raw material. Animal protein material is palatable and high-usage but is a great threat to the animal and human’s physical condition. We can find the direct proof of this statement-the BSE. BSE which was identified in 1960s, but its direct cause has not been found until 1998. The leftovers in the slaughtering and processing of ox and sheep are processed into the feed. Such kind of feed can lead to cerebella malfunction.

Since then, the international world began to consider if it is not right to use the leftovers in animal slaughtering and processing to make feed. At the same time, series of laws were adopted to prevent leftovers being used. In order to avoid the safety issue caused by BSE, many nations issued laws to forbid the leftovers in animal slaughtering and processing being used to feed the specific animal. Meanwhile the animal diseases in China were getting more and more severe. After the highly pathogenic blue ear pig disease spread in 2006, Chinese People began to be aware of the negative effects of the animal protein used in the feed and people in the south region where livestock breading is quite developed, started to oppose the feed with animal protein.

Therefore, developing plant protein is destined to start in order to ensure food safety. Concerning the specific condition in China, the soybean is the priority choice for it is sufficient in quantity, wide in area and cheap in price. Besides, fermented functional soy protein peptide is easier to be digested and is the preferred substitute for animal protein.

In conclusion, functional soy protein peptide project has a profound influence on the livestock breeding and feed processing enterprises, corn and soybean deep processing enterprises and grain security.

Jilin Province is the important commercial grain production base in China. Siping City where this project will be developed is the third largest city in the province. It is located in the transportation hub and a region with abundant grain production and appropriate climate for livestock breeding. The implementation of this project will transfer Jilin Province from a grain production base into a meat, egg and milk production base and form a industry chain from graining planting to final processing. By then, farmers’ income will be increased and their living standard will be improved. A recycling economic industry chain will be developed covering grain planting and processing, feed production, livestock breeding, and subsidiary food production and sale.

II. Construction Scale and Production Plan

Project Components
	Table 6-1
No.	Name	Unit	Quantity	Storey
1st	Main Production Items
1	Ferment Workshop	m2	2880	2
2	Compounding Workshop	m2	3240	6
3	Solid Ferment Workshop	m2	7200	4
4	Drying Workshop	m2	3284	2
2nd	Assistant Production Items
1	Raw Material Warehouse	m2	2000	1
2	Final Product Warehouse	m3	2000	1
3	Package Warehouse	m2	300	1
4	Packaging Workshop	m3	200	1
3rd	Infrastructure
1	Boiler Room	m2	1480	1,part 2ndfloor
2	Substation	m2	180	1
3	Pump House	m2	60	1
4	Fire Control Cistern (underground)	m3	500
5	Daily Use Cistern (underground)	m3	20
6	Recycling Cater Cistern	m3	2×350
4th	Construction in Plant Area
1	Process in the Whole Plant Area and the Outer Heating Pipe	m	2800
2	Power Supply and Lighting	m	4200
3	Water Supply and Drainage; Fire Control Pipe Network	m	1800
4	Waste Water Treatment System	m3/d	53.06
5th	Pilot Plan and Transportation
1	Platform Scale	ton	60
2	Dispatcher’s Office	m2	25	1
3	Main Gate and Bounding Wall	m	2080
4	Road	m2	21500
5	Hardened Ground	m2	3000
6	Forestation (2%)	m2	2000
6th	Service Facility
1	General Administrative Office	m2	3000	5
2	Laboratory	m2	2000	3
3	Apartments for Shift Workers	m2	1800	3
	Accumulated Construction Area	m2	29649

Target

This project can replace the animal protein with plant protein and guarantee food safety from the very beginning.

III. Market Analysis and Economic Benefit Forecast

The calculated annual revenue after launch is 643500 thousand Yuan; and annual profit is 56656.4 thousand Yuan. Paid tax totals 34150.3 thousand Yuan, in which value added tax totals 18169.2 thousand Yuan, turnover tax 1817 thousand Yuan and income tax 14164.1 thousand Yuan.

This is the basic project for the 300 million per year pig breeding project. Once the project gets launched, 1000 people can be employed, 10 thousand farmer families around the project base can develop real safe livestock breeding. This will certainly promote the rise of economy in Siping City as well as Jilin Province.

Therefore, this project is feasible for economic and social benefits it creates.

IV. Total Project Investment and Financing Arrangement

1. Total Investment

The total investment of the project is 200007.2 thousand Yuan, among which 178387.9 thousand Yuan are construction investment cost, 958.8 thousand Yuan are interest on money and 20660.5 thousand Yuan are circulating fund.

Details on construction investment:

Construction engineering cost: 38284.4 thousand Yuan

Equipment purchasing cost: 85570 thousand Yuan

Installation cost: 12085 thousand Yuan

Other cost: 33968.4 thousand Yuan

Basic reserve cost: 8480.1 thousand Yuan

2. Financing

Total investment 200007.2 thousand Yuan

We plan to apply for 9950 thousand Euro loans from Nordic Investment Bank and establish self-loaded fund for the rest.

V. Cooperation Ways

There are many possible ways. Details can be discussed face to face.

VI. Foreign Investment and Constitution

There are many possible ways. Details can be discussed face to face.

VII. Project Construction Venue

The site is located in the Tiedong Economic Development Zone of Siping City and covers an area of 260000 square meters, a flat area in 43°11′ north latitude, 124°20′ east longitude and 664.2 m over the sea level, VI seismic resistance. It is in the triangle area among the Siping outer ring road, Changchun-Shenyang Express Way and west border of the development zone. The farmland to the north of our plant will become greenbelt according to the schedule. South ring road is located 200 meters to the north border. Si-Shan Road is on the east side and Jilin Everyday Food Group is on the opposite side. The farmland to the south of the plant and Dudacheng village which lies 30 meters from the south border will turn to be industrial area. So is the farmland to the west. Laochengzi village which lies 900 meters to the northwest of the plant will become industrial and public facility area. No big polluting site locates near the plant. The surrounding environment is fine. 

VIII. Project Progress

This project continues for two years. In order to save time, we make following arrangements:

Nov. 2008-Apr. 2009: Finish research report and assessment.

May 2009-Aug. 2009: Make engineering design, check and reserve the equipments

Jul. 2009-Jun. 2010: Start civil works, purchase, install and adjust the equipments

Jun. 2010: Trial Production

Dec. 2010: Project launch

Now the accumulated investment is 10.546 million Yuan among which investment on land, civil works, non-standard equipments, imported equipments and other investments cost 7.8 million, 10 million, 26 million , 59 million and 2.66 million Yuan respectively.

IX. Outline of Project Organizer

Brief Introduction of the Host Company:

Jilin Jurun Biotechnology Co., Ltd is the agricultural and biotechnological production base in Northeast China invested by Beijing Jurun Agricultural Technology Group. Jurun Group spares itself no effort to ensure food safety, ecological protection and social harmony. The grand signing ceremony was held on Feb. 23^rd of 2009 in the CCTV Media Center with leaders from Siping City present. It is a major project in the province. The foundation stone laying ceremony was on Apr. 27^th of 2009. The former Governor of Jilin Province, Mr. Han Changfu who is now the Minister of Agriculture attended together with other major leaders from the provincial government. He also listed this project as a major one for the province.

The first phase investment reached 0.31 billion Yuan. We planned to develop a production base with an annual output of 100 thousand tons of functional soybean protein, feeding material, a national agricultural biotechnology research center and an international first-class agricultural biotechnology zone in Siping Tiedong Agricultural Biotechnology Region based on local advantages. We can have 1500 million Yuan’s income each year and realize financing by listing on the stock market. The second phase is the series of projects concerning breeding and processing of the Yehegong Pig. Total investment is 6000 million Yuan. The annual income of the project can be above 20 billion, 3000 people will be employed and 10 thousand farmer families can be trained be engaged in healthy bio livestock breeding. We can set up the very first bio black pig brand-Yehegong Pig. This project can be the pillar force to promote the fast and great economic development of Siping City.

It is a major high tech agricultural project greatly supported by the nation. It will get the beneficial loan of 9.95 million Euro form NIB. All the papers concerning this have been approved ( Document number from National Development and Reform Commission is【2008】2658, response document number is 【2009】2166; Document number from Ministry of Finance is 【2009】4)

Introduction of the Project Team:

Legal representative Mr. Liu Mingzhi was born in 1969; Master of Economy; one of the first batch marketing directors in China; specially appointed professor in senior agricultural MBA class, visiting professor and evaluation expert of agricultural industrialization in Renmin University of China. He is now the chairman of Jilin Jurun Biotechnology Co., Ltd. He is a great success in founding Changchun Dacheng Group (includes two listed companies, biggest agricultural industrialization company in China, biggest corn deep processing company in Asia, biggest amino acid production company in the world). He then founded Beijing Green Weinong Group and Beijing Jurun Agricultural Technology Group. He possessed great knowledge and experience in business establishment, project planning, research and innovation, management, and capital operation etc.

Technological Principal researcher Pan Baohai was born in 1972, Doctor Degree of Animal Nutrition and Feed of Agricultural University of China, researcher in the Feed Department of Chinese Academy of Agricultural Sciences. He is a senior expert and possesses many patents of invention.

Technological assistant Mr. Zhu Jiaming was born in 1977, Doctor of Biological Pharmacy, inventor. He possesses many patents.

Civil works Principal Mr. Song Jiaxiang was born in 1962, Senior Engineer, manager of engineering department of Jilin Jurun Company. He used to be the senior program manager in Changchun Civil Works Group. He is quite experienced and is a practical expert in civil works management.

Chief scientist of the project: Mr. Li Defa, born in 1953, acquired PhD of Animal Nutrition and Feed Processing of Kansas State University in 1989. His major research topics are monogastric animal nutrition, nutrition and immunity, the biological value of feed and feed processing technology assessment. He advocates in connecting scientific research, personnel training and the actual production together. He is the host of "Nutritional regulation of animal breeding scale and key technology" which is one of the State "10^th 5 years" key programs and the chief scientist of " Nutrient metabolism and regulation of the formation mechanism defined by livestock and poultry meat quality " which is in the category of The National Key Basic Research Programs (973 Program). He has published 350 papers, among which more than 110 articles were recorded by SCI. He has won 1 second award of the national scientific and technological progress, and National Outstanding Youth Fund in 1997, and the national Outstanding Young Expert title in 1998. He was selected as the first and second level experts of the "100 million project" and was preferred talent in "Shennong Plan". He has won the award of outstanding young academic leaders of the "New Century Talents Project" of China Agricultural University in 2000, "China's Outstanding Post-doctoral" award from Ministry of Personnel in 2000, and "2000 Outstanding Teacher Award" from BAOSTEEL Education Fund Council. Number of his papers recorded by SCI in 1999 and 2000 was the biggest among agricultural experts. His doctoral students Song Guolong and Lai Changhua won "National Excellent Doctoral Dissertation" respectively in 2006 and 2007. He was the chief expert won the sponsorship of "Creative Research Groups Fund" in 2001 and 2005. He has 6 patents and 10 published books, 12 doctoral students, 6 master students, 10 graduated post-doctoral students, 49 graduated doctoral students and 38 postgraduates.

Chief Consultant: Academician Mr. Sun, the authoritative expert in biochemical weapon

R & D expert: Mr. Qiao Shiyan was born in 1963, Ph.D. in animal nutrition, professor and PhD supervisor of the China Agricultural University, Associate Director of Feed Center of Minister of Agriculture, and National Feed Engineering Technology Research Center, Associate Director and Vice Secretary General of t Animal Nutrition Branch of Chinese Institute of Animal Husbandry and Veterinary, and member of Agricultural Product Quality Safety Authentication Center. Ever since 1989, he has been engaged in animal nutrition and feed science research, teaching and technology transfer work. In the research, by making better use of veterinary background knowledge, the characteristics of nutrition and feed, closely integrating with actual production, focusing the application of technological advances in basic theoretical research and technology development of aquaculture industry and feeding industry, he carries out the work in intestinal health and efficient feeding resources. He is the winner of National Outstanding Youth Science Fund, the main participant of National Natural Science Foundation of Innovative Research Groups - Animal nutrition and Feed, and the national candidate of “New Hundred Talents Project". For the past five years, he was the host of 8 national level or ministerial level projects including National Natural Science Fund, the National Key Technologies R&D Program of China, leap of agricultural science and technology projects of Ministry of Agriculture, commercialization fund of agricultural research findings. He has published more than 80 research papers published papers, won 1 Second Level National Science and Technology Progress Award, 2 provincial and above level Second Level Science and Technology Progress Award. He was selected by the Central Organization Department, Ministry of Personnel, China Association of Science as the winner of   "Eighth China Youth Science and Technology Award" in 2004.

Mr. Xu Chuncheng: Born in 1965, PhD of Animal Nutrition and Feeding. He has 10 years’ experience of TMR and biological activity animal feed research in Japan. He possesses many patents and awards.

Mr. Zhao Baoquan: Born in 1967, PhD of Pharmacology. He possesses many patents and awards.

Mr. Ma Yongxi: Born in 1971, PhD of Feed and Breeding, expert in pig breeding.

Mr. Sun Tiehu: Born in 1973, PhD of Animal Genetics and Breeding, expert in animal breeding.

Project Strategic Consultants are Mr. Wen Tiejun (Director General of Agricultural Development Bureau of People’s Congress), Mr. Zhang Liyang (Assistant of Wen Tiejun) and one retired leader.

Project Brand Chief Expert: Mr. Wang Hanwu, President of China Brand Research Center, authoritative expert in China.

X. Contact Methods

Mailing Address: No. 1268 of Lishan Road, Tiedong Economic Development Zone, Siping City

Contact Person: Zhang Yufeng  

Tel/Fax: 0086-434-3325999   

Cell phone: 0086-15204400303