BEEF CATTLE FATTENING, SLAUGHTERING AND PROCESSING

  1. Contents of the cooperative project
  2. Brief account of the project
  3. Name of the project: Beef cattle fattening, slaughtering and processing.
  4. Total investment: RMBY51427400, there into fixed assets capital of RMBY43860500, basic floating capital of RMBY7566900.
  5. Chinese party shall provide: 10 hectares land, basic establishment for water and electricity supply, partial stockyard, 30% capital in cash of the total investment.
  6. Foreign party shall provide: 70% current capital of the total investment, that is: RMBY36000000(approximately US$4400000).
  7. Selection of factory location and its advantages:

a. Natural environment: the site of the project shall be located in the Heishui Town, Jianping County in the west of Liaoning Province, across the Laoha River, oppositing to the Chifeng City of Inner Mongolia. It has rich resourses of soil and underground water. Jianping County is within the region of continental monsoon climate, with less rain fall---only about 480mm a year. Its annual even temperature is 8.1°C, between the extreme highest of 40°C and the lowest of -28°C.

b. Area of factory occupation: the site of the project shall occupy 10 hectares of flat land, without any pollution sources around.

c. Transportation condition: the site of the factory is only half a kilometer to a highway in the north, 10 kilometers to the nearest railway station and 45 kilometers to the Chifeng Airport.

d. Communication: Jianping County has already been covered by the network of programmed controlling telephone, mobile telephone and internet.

  1. Production program

a. Name of product and production scale: annual output of 12000 beef cattle fattened and slaughtered, there from annually, 3000tonnes beef, 625tonnes cattle by-produce, 10000 sheets of skin, 200 tones bone powder and 20000 tones concentrated fodder for cattle and sheep.

b. Construction scale and period: 1. setting up a fattening stockyard with capacity of 12000 cattle in stock averagely, and a sewage farm with capacity of processing280m³sewage a day; 2. setting up a concentrated feed processing plant with capacity of producing 20000 tones concentrated feed annually; 3. setting up a slaughter and packing house with capacity of slaughtering 12000 cattle and producing 3000tonnes beef annually; 4. setting up a freeze storage with capacity of freezing 15 tones a day and storing capacity of 1000 tones; 5. setting up a bone dust processing factory with capacity of using 600 tones raw material to turn out 200 tonnes bone dust annually; setting up a sewage farm with capacity of processing 92m³sewage daily.

The construction period shall be 1 year.

c. Resources and the supply of raw material and accessorial material: As one of the main grain production bases, Jianping County is a region rich in agricultural and stock raising resources. Its annual grain output hits 400-500 million kilograms, among which more than 200 million tones of maize. Also there are 28600 hectares of artificial pasture. Therefore the supply of fodder and forage grass is adequate. Now there are as many as 2272 feeder farmers with total 170000 cattle in stock. With the rapid development of animal raising, which has been promoted by the local government, the amount of cattle in stock will be increased in future.

The annual water consumption of 145420m³and electricity consumption of 2744000KW for the project can be guaranteed.

d. Production process: 1. raising, the fattering stockyard purchases calves weighing about 350 kg with more than 70% fat for fattening in opened houses. 2. slaughtering and processing shall be seperately carried out in different areas: non-axenic and axenic. The slaughtering process is as following:

Waiting---washing---fainted---hanging on rail---slaughter and letting out blood---cutting off horns,head and hoovies---preparation for skin---pulling skin with machine---sawing the chest---cutting abdomen open---sawing into two halves---finishing---pre-freezing---picking out bones---cutting---packing---freezing---storage

f.Measures of environmental protection: In the feed processing plant, measures shall be taken to get rid of the dust; Desulfurizing machines shall be adopted to treat with the smoke and dust from the boiler; A sewage treatment system shall be used for treating with the manure and sewage in the methods of deposition and sterilization. After filter, adjust, insolate, deposition and sterilization,the sewage starts to be drained out; while the waste shall be piled for fermenting.

g.Technical standards: All the technology and process of production shall be conformed to the <Atmosphere environment quality standards>(GB3095-82), <General sewage standards>(GB8978-88), <Boiler smoke discharge standards>(GB3841-83).

  1. Market broadcast
  2. Technology standards, market and developing tendency of this trade:

Alongside the population increasing and the rising of living standrads resulted from the economic development, the demand for beef of high protein and low fat will rise in large scale.

  1. Competitive advantages: There have never occurred epidemic diseases in this region for a number of years, because of the well organized system of prevention and technical services. The beef processing shall be carried out strictly conforming to the state’s technology standards.
  2. Marketing quotient: After the project coming into operation, it produces 300 tones of high-grade intersected beef, 600 tones of qualified intersected beef for exporting to Japan, South-eastern Asia, Hongkong and Macau; 2100 tonnes of general intersected beef and 625 tones of by-products for sale in domestic market.
  1. Evaluation on benefit
  2. Distribution of the investment:

The concentrative fodder processing plant: RMBY11121000;

Fattening farm: RMBY19607300;

Slaughter and packing house: RMBY20699100.

  1. Cost analysis: the annual average total cost: RMBY111568200. Among which, the fodder plant takes 28157600; the fattening farm 36997800; the slaughter and packing house 46412800;
  2. Suggestion on the profit allotment: It is estimated that the annual average sales income shall hit RMBY131170000, annual total cost RMBY111568200, sale tax RMBY7591900, gross profit RMBY12009900, income tax RMBY3963200, net profit RMBY8146700. The net profit shall be alloted according to the proportion of investment after the funds of award, welfare and development being picked up.
  3. Taxation: After the project coming into operation, its annual average value added tax shall be RMBY7591900, its income tax RMBY3962200, totally RMBY11554100.
  4. The results of the evaluation on benefit:

Profit margin of the investment: 17.38%

Profit margin of cost: 10.76%

Profit margin of sale: 9.2%

Profit margin and tax rate of the investment: 28.37%

Interior yield of the total investment: 19.45%

Return period of the investment(static state):

6.3 years

f.Analysis on balance: the analysis on the break-even - point is based on the utility of the productive capacity, that is:

BEP＝annual average fixed cost / (annual average sale income – annual average variable cost – tax)

＝10069500 / (131170000 – 101498700 – 11555200) ＝ 55.58%

It shows that the project can be profitable in case of the 55.58% of the designed productive capacity is reached.

  1. Introduction of the Chinese entrepreneur
  2. Present situation
  3. Name of the entrepreneur: Jianping Sugar Refinery Co.ltd
  4. Founded in : 1979
  5. Ownership: stock company
  6. Employees: 700 persons
  7. Senior or middle ranking technicians: 12;

Junior technicians: 100

  1. Business scope: manufacture and marketing of sugar, edible alcohol, fodder.
  2. Address: Heishui Town, Jianping County, Liaoning , PRC
  3. Equipments possessed: 2 processing line for sugar refinery; 2 processing line for beet dreg grain; 1 processing line for grass grain; 1 processing line for edible alcohol.
  4. Net assets: RMBY30000000
  5. Credit grade: AAA
  1. Introduction of the main products
  2. Products varieties and scale: Sugar 20000tonnes/year

Beet dreg in grain 12000tonnes/year

Alcohol 2000tonnes/year

  1. Marketing region: mainly in the north-eastern part of China.
  1. Conclusion:

A positive conclusion coming from the evaluations and analysis indicates that this project , being in the accordance with the state’s industrial policy and the local plan of development, has some advantages such as better future marketing, applicable technology and designing, adopting advanced equipments and tech. Every financial index of the project is higher than the basic and standarded level, which means the project possesses the ability of getting profit and resisting risks. The implement of the project shall activate the development of cattle raising locally.

  1. Contacts

Entrepreneur: Jianping Sugar Refinery Co. Ltd

Person in charge: Mr. Shi Zhen Hua Mr. Wang Xiao Feng

Tel: 0421-7375003 13704212486 7816819

Fax: 0421-7816819

E-mail: