1. Market Prospects:

Vacuum-dehydrated low-temperature fried food caters for people's modern and high demands for food. At present, there are in China about one thousand small food factories producing fried potato slices and swelling food, which sell well. But at the same time, there is only one factory in Shanghai producing vacuum-dehydrated low-temperature fried products with an annual output of 100 tons, and one in Xi'an with an annual output of 60 tons. These products occupy a very small share in the market now, but as the society and economy develop, this kind of products will have a great market potential in the food consumption in China.

2. Construction Scale and Contents of the Project:

Construction scale: annual production of 4,000 tons of series of vacuum-dehydrated low-temperature fried foods.

Main construction contents: (1) 14,000m2 of new workshops and warehouses; transformation and decoration of 3,880m2 of old workshops, (2) purchase and installation of production equipment and its ancillary equipment.

3. Construction Conditions:

3.1 Raw materials available in Beiliu City; annual supply of fruits: 300,000 tons, annual supply of vegetable: 200,000 ~ 250,000 tons.

3.2 The location of the project is 3km from Grade-A Yulin-Rongxian Highway, 30km from Yulin Railroad Station, 200km from Wuzhou Port, and 120km from Guigang Port, enjoying convenient telecommunications.

3.3 The installed capacity of the project is 442.5kw and annual consumption of power is 600,000kwh. At present, there is one 10kv overhead power transmission line to the cannery, and it is planned that one 10kv step down transformer of 500kva will be installed to satisfy the power consumption of the new project.

3.4 There are 3 deep wells with a water output of 50 tons per hour in the factory now, and the city water pipeline is connected, so the supply of water for production and living is ensured.

4. Total Investment: USD 18,950,000.00, of which USD 9,290,000.00 is foreign capital to be used.

5. Mode of Cooperation: Cooperation

6. Expected Returns:

--- Construction time: 0.75 year

--- Internal returns on investment: 18%

--- Period for recovery of investment: 3.29 years

7. Construction Place: Litchi Farm, Hongniling, Beiliu City

8. Progress of the Project Preparations: The feasibility study report having passed assessment and approval.

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 of 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 for land use, water, power, telecommunications, and labor power employment.

10. Project Sponsor's Conditions in Brief:

Project sponsor: Beiliu Cannery

--- Registered capital (USD): 9,690,000.00

--- Original value of fixed assets (USD): 17,340,000.00

--- Net value of fixed assets (USD): 13,870,000.00

--- Factory area coverage (m2): 1,363,402

--- Factory building floorage (m2): 5,000

--- Number of staff (person): 575

--- Number of technical personnel (person): 45

--- Present staple products: Fruit cans, vegetable cans, juice cans and eight-treasure congee.