and Conditions of Undertaking the Project
1.Social and Economic
Background of the Project
Since the beginning of 1980’s, Lin’an has waged a campaign to develop agriculture at a large scale, featuring cultivating bamboo grove and economic forest on gentle slope. After 10 years’ efforts, Lin’an is now renowned as “The Town of Bamboo in China”.
According to “the 9th Five-year plan and Development Program in 2010 on Lin’an’s National Economy and Social Development”, Lin’an will stress on developing resource-oriented secondary industry on the city's northern and southern wings so as to improve agricultural development levels and create industrial groups that combine agriculture and resource-processing.
The bamboo processing industry in Lin'an started in 1980's and plays an important role in consuming the local bamboo resources and raising the bamboo price stably. When the corporation started to manufacture bamboo ware, the price of raw bamboo was only 8 yuan/50kgs, which is now raised and kept above 23 yuan. Therefore, the development of processing industry in turn greatly promotes the advance of farm production and contributes to rural economic growth and social prosperity. Say the annual demand of raw bamboo is 640,000 poles after the implementation of the project, it will bring a revenue of RMB4,800,000 to bamboo farmers.
2. Basic Information on the Contractor
Set up in 1970, Zhejiang Lin'an Tea Industrial Corporation, is one of the few largest tea manufacturers in China.
Lin'an, where the corporation is located, is a satellite city of Hangzhou-capital of Zhejiang Province (the primary tea producing province in China). It lies in the very center of the most important tea growing area, Zhejiang-Anhui-Jiangxi area. As far as green tea is concerned, more than 90% of the tea exported from China and 70% of the international tea market's sales volume is from this large verdant tea plantation.
Standing next to the Hangzhou-Huangshan first-class tourism road, the corporation enjoys a convenient location. It is about 40 km from Hangzhou, 200 kg south-west from Shanghai and almost the same distance west from Ningbo (an important port of the province). As for means of telecommunication, it is just as convenient as that in Shanghai and Hangzhou. Here we present the following data of the corporation:
Being a partnership enterprise, the corporation has lighter financial burden than most state-run factories and enjoys full decision-making rights. If necessary, it can deal with its clients directly without any intermediary and give immediate response to various market demands. Furthermore, its strong productive power, complete ranges of goods as well as extensive network both at home and abroad perfect its service. Therefore, it can assure the clients of punctual delivery, guaranteed quality and quantity with competitive price regarding the quality/price.
On March 1, 1997, the corporation was approved by the Chinese government as the first of its kind in Zhejiang Province to have the right to export tea directly and get the export licence (the tea export market has not been opened to Chinese tea manufacturers so far). As a result, an International Trading Department with several salesmen proficient in English, French, Russian has been set up just opposite the Provincial Government in Hangzhou. Since mid 1997, tea exported directly by the corporation has made its appearance in international market.
In fact, Lin’an Zhejiang Tea Industrial Corporation is not new to international tea market. Ever since 1970, it has been an important tea supplier for China Tea Import & Export Corporation, China TUHSU Shanghai (Zhejiang, Anhui, Guangdong, Yunnan, Hunan) Tea Import & Export Corporation. The total export tea supplied by the corporation has reached over 150,000 tons. In the past three years, the annual sales volume has been over 10,000 tons and the annual sales value has reached 100 million yuan, 90% of which is derived from international market.
3. Market Demand Analysis
The variety of bamboo flooring and bamboo decorative planking, which is mainly for foreign markets, is expanding from South-east Countries to European and American markets. Since only such countries and regions as China and Taiwan produce raw bamboo, the demand for bamboo floorboard exceeds the supply after its acceptance by European and American markets. The main factors on sales are quality and timely delivery. At present, the clients come mainly from Europe and U.S.A. However, with limitation in capital and the production capacity of the present equipment, producers cannot totally meet the quantity needs from clients.
After going into operation, the corporation can manufacture the products as follows:
4. Technology and production Conditions
The corporation has mature production technology. In order to make further improvement on technology, the corporation is going to collaborate with Zhejiang Forestry Institute, Nanjing Forestry University, Bamboo Center of Ministry of Forestry, Taiwan dealers and other foreign clients.
After many year’s experience, the corporation has a lot of talents in such fields as raw material purchase, production operation, marketing and cost control, laying a sound foundation for further enlarging the corporation’s scale and enhancing the technological benefits.5. The Supply of Raw Material and Labor Force
With great development in Lin’an bamboo production bases in recent years, there is sufficient high quality raw material. The corporation has fostered food relations with the producing area. Meanwhile, Jiangxi, Fujian and Anhui Provinces and neighboring counties actively promote the sales of their bamboo plates. Therefore, after investment invitation, there is no problem in the supply of raw material at all.
Regarding labor force, Lin’an is a comparatively economically developed town with high quality people and adequate rural surplus labor force.