1. Market Prospects:

"Tianbao Anise Oil" produced by Debao County is world famous, and most of the products are for export and the products are in short supply in the market. The supplies of geranium oil, pepper mint and anise camphor with freezing point of 21 0C cannot meet the great demands both in the domestic and foreign market. After expansion, Debao Spice Factory can surely broaden the market with its quality products and prestige.

2. Construction Scale and Contents of the Project:

Planting 7,000 hectares of star anise, 700 hectares of pelargonium roseum and 700 hectares of American No.39 pepper mint, with annual production of 1,000 tons of anise oil, 200 tons of anise camphor with freezing point of 21 0C, 56 tons of geranium oil and 150 tons of pepper mint.

3. Construction Conditions:

The land for planting base is available and the local peasants have the technique and experiences in planting; the transport is convenient with highways connecting the county, townships and villages; the factory is a large exporter of spice and has advanced technology and experience; water and power supply can meet the need of the project expansion; the factory is only 2 km away from the county, convenient of access.

4. Total Investment: USD 12,000,000.00, of which USD 5,000,000.00 is foreign capital to be used.

5. Mode of Cooperation: Equity joint venture

6. Expected Returns:

--- Construction time: 7 years for planting and 1 year of production

--- Internal returns on investment: 25%

--- Period for recovery of investment: 11 years

7. Construction Place: Debao County, Guangxi

8. Progress of the Project Preparations: The written project proposals having been worked out.

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

9.1 Those who reclaim waste mountains to construct production base of spice and essence can be exempted from the specialty tax for 3 years from the harvest year, and the paid transfer of their development project is allowed. The investors should pay the land rental of 450--750 yuan a hectare, the tenancy being over 30 years.

9.2 The enterprise will be exempted from the town state-owned land-use fees for 3 years dating from the day the approval is given and exempted from half the fees for the next 5 years.

9.3 The enterprise will be exempted from the regulation tax of the investment orientation and get a reduction of 30% of the basic price for the town or municipal construction ancillary fees.

9.4 40% of the enterprise value-add tax (of the part retained by the county or city) will be refunded by the county or city financial department for 5 years for the enterprise to pay off the loan or expand the reproduction.

9.5 The enterprise will be refunded all of its paid income tax for the first 3 profit-making years and exempted from half the income tax for the next 2 years.

9.6 The enterprise has the right to choose the specific methods of depreciation and the depreciation can be 20% higher than the standard stipulated by the State Council and Guangxi Zhuang Autonomous Region.

10. Project Sponsor's Conditions in Brief:

Project sponsor: Debao Spice Factory

--- Registered capital (USD): 50,000.00

--- Original value of fixed assets (USD): 1,500,000.00

--- Net value of fixed assets (USD): 550,000.00

--- Factory coverage (m2): 10,000

--- Number of staff or workers (person): 47

--- Number of technical personnel (person): 23