Name of the Project: Project on Inviting Investment in Bamboo Flooring and Bamboo Decorative Planking
Contractor: Lin’an Zhejiang Tea Industrial Corporation
Legal Representative of the Project: Zhu Xiande (M.D.)
Total Investment Amount: (RMB in million) 7.877
Investment Recovery Period: 2.96 years
Foreign Capital Involved: (RMB in million) 4.00　

Lin’an is renowned as “ The Town of Bamboo” in China. According to the 9^th Five-year Plan and Development Program in 2010, as far as secondary industry as concerned, Lin’an will stress on developing resource-processing industry and enhancing agricultural development level so that agriculture and resource-processing industry will adapt to each other.　

Established in 1980’s, the bamboo processing industry in Lin’an plays an important role in consuming the local bamboo resources and raising the price of raw bamboo. Once the project is implemented, it will consume 640,000 poles of bamboo, bringing an annual revenue of 7.68 million yuan to the farmers and creating 250 vacancies for workers.　

After a year’s survey and practice, the corporation is ready for going into operation. With plenty of talents in technology and management, the corporation has laid a solid foundation for enlarging its production scale and improving the technological level and efficiency.　

The supple of raw material is abundant in Lin’an. Besides, Jiangxi, Fujian, Anhui Provinces and the neighboring counties also actively supply raw bamboo.

PART TWO
THE CONTENT OF THE PROJECT

After the implementation of the project, the corporation will achieve an annual capacity of 100,000 square meters of bamboo flooring and bamboo decorative planking, enhance the ability to develop new products and new specifications, strengthen technological reserve and thus become a leading bamboo processing enterprise that is integrated in science, industry and trade.　

The total investment amounts to RMB7,877,000, including RMB4,827,000 of fixed assets for production, RMB 130,000 of new product development and research equipment, RMB2,500,000 of current capital and RMB420,000 of deferred assets and unforeseeable expenses. The foreign party will invest RMB4,000,000 of equipment and current capital while the Chinese counterpart will offer RMB3,877,000 of plant and land.

From December, 1999 to February, 2000 will be the construction period. The corporation will start production in early 2000, reaching a capacity of 150,000 m² with 90,000 m² bamboo flooring and 60,000m² of bamboo decorative planking. 　

In 2000, the corporation will achieve a sales revenue of RMB10,150,000, making a net profit of RMB1,198,000. From 2001 on, the sales revenue, net profit and profit tax will reach RMB20,300,000, RMB2,736,000 and RMB5,404,000 respectively.

Some important data are as follows:
Static investment recovery period: 2.96 years
Dynamic investment recovery period: 3.21 years
Internal rate of return: 31.46%
Break-even sales value: RMB4,158,000
Break-even composite average unit price:
      Bamboo flooring: RMB147.8/m²
      Bamboo decorative planking: RMB183.5/m²
Annual tax levied: RMB2,668,000
Worker's wage: RMB2,067,000 per annum
Raw material paid to bamboo farmers: RMB7,680,000 per annum
Bamboo planking processing expenses paid: RMB 1,950,000 per annum
Number of employees: 250

This project fits for the resource conditions in Lin’an and comply with the state industrial policy. Since it enjoys a sound foundation in the present production technology and the orders from other countries exceeds the production capacity, it has a bright market perspective.