Angus Beef Cattle Industrialization Investment Project
Content of project
Introduction
Yellow cattle improvement has been paid high attention by governing sections, and
gets some clear results. At present volume of pure yellow cattle is decreasing. With
yellow cattle improvement, breeding rate after two generations decreases, weight
becomes lower due to low raising standard. Angus cattle has typical beef cattle
figure, earliness and good inheritance ability. Through these years’ experience,
we use Angus cattle mating with other crossings to remedy the above limitation. Sale
of beef market demands good quality beef, good quality beef rests with amount of
fat between muscles (called marble). Marble is the basis of quality grade system,
higher marks the marble gets better the beef is. Angus cattle has best marble, its
beef quality is best in the world.
Through several years’ operation, Yangshi Group Angus Livestock Co. Ltd has
concluded stud cattle feeding, semen freezing, embryos transplantation etc.
advanced technology and developed part of semen natively. With appearance of Angus
crossing cattle, the problem of fund lack becomes clearer and clearer restricting
development of Angus beef cattle industrialization. In order to promote this project
we decided to invest fund 100million RMB for Angus beef cattle industrialization
project.
1. Project title: annually slaughter and produce 20thousand high grade angus
crossing cattle with raising angus cattle, frozen semen breeding, 10-12 months
calves reclaim, high grade focus breeding, slaughtering producing, sale system.
(The following called angus beef cattle industrialization)
2. Total investment amount: 200million RMB.
3. Chinese party offers condition and investment proportion: there’re 1000mu land,
sixty New Zealand pure Angus stud bull and one hundred stud cow, 14 pure Limousine
stud bull and 16 stud cow and relative sheds, playing ground, grassland,
electronic fence, fodder factory, silage vault, vet room, breeding room and
French most advanced semen production equipments and full set of embryos
transplantation technology, total assets and invisible assets almost 100million
RMB. Our company’s assets will be 50% of total investment.
4. Foreign party offers condition and investment proportion: it’s to invest
100million RMB, 50% of total investment, thereinto fixed assets 46.9million RMB,
current fund 52million RMB.
5. Angus beef cattle industrialization belongs to continuous project, needn’t
importing technology and equipments temporarily. It only needs funds at present.
Location and environment
1. Natural environment
Yangshi Group lies in Tieling economic development zone of Liaoning, Tieling Angus
livestock co. Ltd lies in Tuanshanzi farm of Tieling economic development zone, 10km
away from city center, low mountain foothills. In this area, forest coverage rate
is more than 30%, air fresh, water pure, without any industrial pollution. This kind
of natural condition and terrain is the ideal location and suitable for epidemic
prevention.
2. Location and area
Project unit has 1000mu land, mainly with low mountains and foothills, available
area 55%. 550mu land can meet need of project land dispensing with more land.
3. Traffic and transportation condition
Tieling Angus livestock co. ltd lies in Tuanshanzi farm, southeast of Tieling, 10km
away from city center. High way extends in all directions with Tieling outer round
highway, Tiefu highway, national way 102, Shenha Express way, Jingha railway, 70km
from Shenyang Taoxian International Airport, 300km from Yingkou harbor and Dalian
Harbor. Traffic is very convenient.
4. Communication and correspondence
Tieling's communication and correspondence career is very developed. There're China
Telecom and China Mobile, China Unicom cover the whole area, post and telegraph is
in time and accurate.
5. Storage ability
This company has all kinds of storage conditions.
6. Scientific technology ability
Our company has abundant technique force, three senior livestock engineers, 2 senior
veterinarians, 1 senior accountant, 1 senior economic engineer, 1 senior planning
architect, more than 30 middle and junior techniques, more than 20 technique workers.
And we have good cooperative relationship with Shenyang agricultural university and
Liaoning livestock and veterinarian research institute to solve problems and develop
new technology during production.
Production outline
1. Products title and scale
Tieling Angus livestock co. ltd adopts good quality New Zealand stud angus cattle
semen mating with local cows to make angus crossing beef cattle on present basis.
It plans to raise high quality cattle for first project, slaughter and sell
20thousand good quality beef cattle project. Deep production of beef cattle
production, biological medicine, leather, etc for 60thousand cattle is the second
project.
2. Construction scale and period
Construct raising, slaughtering, selling 20thousand beef cattle project and
relative sheds, fodder factory, silage vault, organic compound fertilizer factory
etc. basic facilities. Its construction period is 2.5 years.
3. Resources and raw materials supply
Tieling is an agricultural city. By the end of 2001, the whole's beef cattle came
to more than 700thousand, thereinto, breeding cows about 300thousnad. According to
municipal plan, by 2005 the whole's beef cattle will come to 1.1million, thereinto
breeding cow 400thousnd. Our company makes use of breeding cows sources. For the
first project, use New Zealand stud Angus freezing semen mating with 25thousnd cows.
If survival rate is 80%, the company will reclaim 10-12months 20thousand calves.
Other raw materials can be provided by the market.
4. Producing techniques
Use our company's stud Angus good quality freezing semen mating with local crossing
cows.
Reclaim 10-12months calve, raise them to 18months with weight 480-500km.
Our company's fodder factory produces fattening cattle fodder according to standard.
The standard fat cattle will be slaughtered, cut and sell.
The sheet and urine made by those cattle will be produced into organic compound
fertilizer.
5. Environment protection and fire protection measures
Waste water made by fodder factory and raising farm will be purified through
deposition and be drained out.
Waste air will be checked through scientific disposal and gets to air pollution
standard.
Waste sediment will be recycled and reused.
Noises will be controlled under 70 decibels by noise elimination facility.
6. Technology standard
This project plans to adopt civil and international most advanced technology
standard.
Market forecast
With development of national economy and improvement of people's life, great change
happens to Chinese citizen's consumption structure and diet structure, especially
for meat consumption. There's more demand for beef and beef products and high demand
for quality of beef and taste.
According to international market, Hong Kong, Macao, Taiwan, Russia and middle-east
area has great demand for cattle and cutting beef, especially for Angus crossing
beef. Production cost of Chinese pork beef and mutton is lower than that of
international market, thereinto pork lower than 50%, beef 80%, mutton 54%. China
has extending exportation ability after entering into world trade organization.
High quality beef consumption increased a lot and quickly. The initialization aim
of Chinese high quality beef production is for west food beef instead of import beef
overseas. At present, there's almost no standard enterprise to produce high quality
beef. In civil market 95% beef is imported from other countries about 50thousand
tons beef. The appearance of Angus beef will fill up this field.
Benefit evaluation
1. Investment structure
Former assets and basic facility etc. almost 100million RMB
Newly increased fixed assets 46.9million RMB
Newly increased current fund 52million RMB
2. Analysis on cost
Stud cattle raising 200*4000RMB/Y 800thousand RMB
Calves reclaim 20000*280km*8RMB 44.8million RMB
High grade fat cattle raising 20000*180Y*8RMB 28.8million RMB
Water electricity medicine 600thousand RMB
Transportation fee 60thousand RMB
Dead eliminated cattle 1milion RMB
Slaughtering and producing fee 10million RMB
Selling fee 12million RMB
Management fee 2.6million RMB
Packaging and keeping fresh film fee 2million RMB
Former assets depreciation (without land) 1.23million RMB
Unpredictable fee 2.6million RMB
Rent for beef cattle slaughtering house 1million RMB
Sum: 10.803million RMB
3. Sales income (for civil market)
Annual 20000cattle, average weight 500kg, beef rate 50%
High grade beef 10% 25kg*20000*80RMB 40million RMB
Middle grade beef 30% 75kg*20000*27RMB 40.5million RMB
Low grade beef 60% 150kg *20000*15RMB 45million RMB
Leather 300RMB*20000 6million RMB
Head hoof etc. 200RMB*20000 4million RMB
Sum: 135.5million RMB
4. Tax forecast
Value added tax: 4.4579million RMB
City construction tax 312thousand RMB
Education fee added 133.7thousand RMB
Sum: 4.9036million RMB
5. Total profit
Sale income 135.5million RMB
Total cost 108.03million RMB
Taxes 1.9036million RMB
Profit 22.5664million RMB
6. Profit distribution
This project is according to international investment intention that fund will be
invested once. After production period, annually return 13% of investment until 15
years. Return amount 98.9million RMB* 13% 12.857million RMB.
7. Analysis on economic efficiency
Investment tax rate 27.77%
Investment profit rate 22.80%
Cost profit rate 20.90%
Sale profit rate before tax 20.30%
Sale profit rate after tax 16.65%
Simple (static) investment reclaiming period 5.38 years
8. Analysis on profit and loss
Profit and loss (BEP) 40%
Annually raise slaughter produce 8000 cattle, if annual volume comes to 40%
production ability, the company can get profit.
9. Analysis on sensitivity
According to features of this industry it makes analysis on sale price, operation
cost, production ability usage rate and fixed assets investment. The result shows
IRR of project is bigger than basic income rate.
10. Farmer’s efficiency
This project plans to use 25000 breeding cows mating by frozen Angus semen, annually
produce 20000 calves. The company will provide epidemic prevention, fodder,
technology service etc. production value of each cattle more than two thousand RMB,
reducing raising cost annual profit of each cattle one thousand RMB. The farmers’
annual profit is 20million RMB.
11. Social efficiency
The execution of this project may bring along development of the whole’s beef cattle
industry and create great social and biological efficiency. Development of beef
cattle industry can bring along relative industry such as beef cattle raising,
slaughtering and producing, selling, restaurants etc. a series of whole industry
chain and make the second and third industry develop.
Introduction of Chinese enterprise
Enterprise name: Yangshi group Tieling Angus livestock co. ltd
Establishment time: 1998
Property form: 80% of whole shares belong to Yangshi group
Employees: Tieling Angus livestock co. ltd has 21 persons at present.
Technology power: in Yangshi group there’re three senior livestock engineers, 2
senior veterinarians, 1 senior accountant, 1 senior economic engineer, 1 senior
planning architect, more than 30 middle and junior techniques, more than 20 technique
workers.
Operation scope: raising stud cattle, frozen semen mating, calves reclaiming, fodder,
organic compound fertilizer, slaughtering and producing and selling.
Location: Tieling economic development zone Liaoning
Corporation: Yang Xiqiu
Yangshi group Tieling Angus livestock co. ltd has 1000mu land, sixty New Zealand
pure Angus stud bull and one hundred stud cow, 14 pure Limousine stud bull and 16
stud cow and relative sheds, playing ground, grassland, electronic fence, fodder
factory, silage vault, vet room, breeding room and French most advanced semen
production equipments and full set of embryos transplantation technology etc.
Conclusion
This project is the biggest agricultural industrialization project of Liaoning
province, one of eight industry of Tieling. Through research and argumentation, this
project is feasible, its execution will bring good economic efficiency to investors.
Contact unit: Tieling Angus livestock co. ltd
Contact person: Zhang Shushen Liu Hengfu
Tel: 0410-2210024
Fax: 0410-2210195