1. Market Prospects:

According to investigations, the output of black sesame paste in China in 1994 was 27,000 tons, only 0.025kg per capita; that in 1995 was 34,000 tons, 0.03kg per capita. Calculated at 0.054kg of black sesame paste consumption per capita in Sichuan in 1995, which was of average sales level by Havle Food (Group) Company, 64,800 tons of black sesame paste may be consumed in China. Calculated at 0.13kg per capita in Beijing, which was of higher consumption level, 156,000 tons of black sesame paste may be consumed in China. The international market has a good knowledge of black food as well.

2. Construction Scale and Contents of the Project:

Annual output of black food: 100,000 tons including newly-increased production capacity of 78,000 tons and existing production capacity of 22,000 tons. To build paste workshops of 12,000m2 and congee and soup workshops of 5,000m2. Introduction of extrusion and swelling equipment and canning equipment from Weivger Company, U.S.A.

3. Construction Conditions:

3.1 Supplies of raw materials and supplementary materials. To support the construction of raw materials base, various ways are adopted by the company such as providing funds, cultivation technology, seeds for the staple raw material supplying bases, and making long-term contracts for purchase and marketing of the products.

3.2 Water supply. When the project is put into production, daily consumption of water is 3,680m3, which is to be supplied by the County Water Works.

3.3 Power supply. The project's installed capacity is 4,231.82kw. Electricity needed is to be supplied by the power network of sub-station of Rongxian Electric Power Company.

3.4 Communications and transport. The factory to be built in the city proper of Rongxian which is located by No. 324 national road and has convenient transport facilities.

4. Total Investment: USD 33,200,000.00, of which USD 16,270,000.00 is foreign capital to be used.

5. Mode of Cooperation: Equity joint venture, cooperation

6. Expected Returns:

--- Construction time: 3 years

--- Internal returns on investment: 20%

--- Period for recovery of investment: 4.8 years

7. Construction Place: Western Suburbs of the County Town, Rongxian County, Guangxi

8. Progress of the Project Preparations: The feasibility study report completed

9. The Local Government's Preferential Policy Applied to the Project:

9.1 The enterprise with an operation period of more than 10 years will be exempted from the enterprise income tax for 2 years and enjoy a reduction of the income tax for another 3 years according to the state stipulations. After the expiration of exemption and reduction periods, the enterprise income tax can be reduced half for an extension of three years upon approval.

9.2 An exemption from local income tax and the regulation tax of fixed assets investment orientation is given.

9.3 Preferential support will be given by the local government to the joint venture in land use, water, power, telecommunications, and labor.

10. Project Sponsor: Guangxi Havle Food (Group) Company

--- Registered capital (USD): 6,780,000.00

--- Original value of fixed assets (USD): 26,830,000.00

--- Net value of fixed assets (USD): 21,460,000.00

--- Factory area coverage (m2): 130,000

--- Factory building floorage (m2): 78,000

--- Number of Staff (person): 3,200

--- Number of technical staff (person): 310

--- Present main products: black sesame paste, black Bazhen, Xianren congee and nutrient food for children.