临沧市临翔茶叶全产业链建设项目 Tea Industry Chain Construction Project in Linxiang District, Lincang City

Project Overview

1. Project Name

临沧市临翔茶叶全产业链建设项目

Tea Industry Chain Construction Project in Linxiang District, Lincang City

2. Project Industry

Modern Agriculture with Plateau Characteristics

3. Project Site

Linxiang District, Lincang City, Yunnan

4. Project Overview

Relying on abundant tea resources in Lincang City, the project will vigorously develop standardized planting of tea trees, processing of tea products, tea culture tourism, etc. Focusing on middle-stream innovative products such as "pure Pu'er tea" and "tea element food", it will promote the coordinated development of all links in the industrial chain, promote the development of multiple functions of the tea industry, promote the integrated development of the primary, secondary and tertiary industries of the tea industry, form a whole industrial chain of tea industry integrating planting, processing, warehousing, logistics and sales, build a tea industry cluster, and build a demonstration of integrated development of the tea industry in Lincang City.

Project Implementation Background

1. Industrial Policies

1. Notice of the General Office of People's Government of Yunnan Province on Printing and Distributing the Action Plan for Tea Industry Development in Yunnan Province (YZBF [2017] No.120):

We should vigorously develop tea deep processing and tea derivative products such as tea drinks, tea health products and tea daily chemicals, and extend the industrial chain. By 2022, the proportion of tea intensive processing in the province will increase to over 80%, and the total output value of the three tea processing parks will reach over RMB 10 billion.

2. Opinions of People's Government of Yunnan Province on Promoting the Green Development of Yunnan Tea Industry (YZF [2018] No.63):

We should support enterprises to build and expand standardized intensive processing production lines, and guide enterprises to develop Yunnan tea products to increase the processing proportion of fast-selling products, "flowers and fruits" Pu'er tea, small package and other products, expand the extraction and utilization of tea polyphenols, tea polysaccharides, tea pigments and other functional components, strengthen the research and development of tea drinks, tea cream, instant tea, tea seed oil and other products, increase the innovative development of tea health products, tea food, tea household necessities and other products, and promote the diversified development of product structure. By 2022, the proportion of intensive processing products of tea processing enterprises above designated size in the province will reach over 80%.

3. "Ten Measures to Promote the Demonstration of "One County, One Industry" in Lincang and Accelerate the Building of First-class "Green Food Brand" (LZBF [2020] No.52): we should accelerate the construction of characteristic towns such as Bingdao, Xigui and Dianhong, plan to build Pu'er Tea Museum and Black Tea Museum, and build a Pu'er tea cultural display window facing the whole country and even the world.

4. Notice of Lincang Municipal People's Government on Printing and Distributing the 14th Five-Year Plan for National Economic and Social Development of Lincang and the Outline of Long-term Objectives for 2035 (LZF [2021] No.1):

We should accelerate the cultivation of tea industry in the whole industrial chain, promote the construction and management mode of "intensive processing leading enterprises+primary manufacturing institutes+cooperatives+farmers+bases" raw material bases, and promote the gathering of high-quality raw material bases to intensive processing leading enterprises. We should also adopt the parent-child brand model of "public brand+enterprise brand" and uniformly use the public brand logo of "Lincang Tea" to build a well-known Lincang tea brand.

5. The 14th Five-Year Plan for Agricultural and Rural Economic Development of Linxiang Agricultural and Rural Bureau of Lincang (2021-2025) (Draft for Comment):

We should implement Linxiang District tea industry chain extension integration development demonstration park and other projects, build efficient and high-quality ecological tea garden and organic certified tea garden with high-standard and high-quality to encourage and support leading enterprises to build agricultural products processing technology. We should integrate bases and demonstration bases for intensive processing, increase the variety of intensive processing products and the added value of products, promote processing enterprises to expand from small ones to large ones, the degree of processing from initial to deep, processing products from coarse to refined, and form a connected processing system of upstream and downstream products.

6. Implementation Opinions of Linxiang District on Accelerating the Leap-forward Development of Tea Industry (LXBF [2018] No.68):

We should vigorously promote the construction of efficient and high-quality ecological tea gardens, strengthen the protection and development of ancient tea resources, cultivate leading enterprise clusters, create a famous brand of Lincang tea, open up international and domestic markets, build Lincang Tea City, the "No. 1 Tea in the World", and implement the "Five One Project" of tea industry.

2. Upper-Level Plan

N/A

Project Construction Plan

1. Project Site Overview

1. Project Site: Linxiang District, Lincang City

2. Preliminary preparations: the standardized workshop of Western Yunnan Biological Characteristic Industrial Park has been completed, which can meet the conditions for enterprises to settle directly. The main structure of the trading center and tea museum has been built. There are already two enterprises planning to land in Bangdong Township Xigui International Tea Culture Characteristic Town.

3. The project avoids three control lines: the boundary of urban development, the redline of permanent basic farmland protection and the ecological protection redline.

2. Construction Duration

It is mainly based on the actual construction of the project.

3. Investment Estimate

1. Investment Estimate: RMB 2.265 billion

2. Fund Raising: mainly self-raised by enterprises.

4. Project Content

1. Project Positioning:

Overall Positioning: it relies on the basis of Linxiang tea industry in Lincang, starting from planting, processing and circulation. We will build a demonstration base for the development of the whole tea industry chain.

Market Positioning: Based in Yunnan, we will focus on developing the "tea sold to the border area" market, consolidate and upgrade key tea markets such as Guangzhou, Shenzhen, Dongguan and Jinan, open up the national market and radiate the international market.

2. Functional Zoning: planting zone, processing zone, trading zone, etc.

3. Project Content

It will be built according to the planning and construction of "one garden, one center, one tea museum and one town".

Demonstration Park for Rural Industrial Integration and Development

Project Site: suburb of Linxiang District

Project Ideas: According to the principle of government guidance, market leadership and leading enterprises with bases, we will build a 20,000-mu standardized organic tea planting demonstration base in the suburbs of Linxiang District, tap the ecological leisure, tourism, cultural and educational values of rural tea, promote the coordinated development of all links in the industrial chain, promote the development of various functions of the tea industry, form a cluster and network development pattern, promote the integration of the first, second and third industries of rural tea industry, and promote the high-quality development of modern agriculture with plateau characteristics.

Project Content: 20,000 mu standardized organic tea planting demonstration base, tea product production and processing zone, leisure experience tourist zone, etc.

Tea Intensive Processing Center:

Project Site: Lincang Western Yunnan Biological Characteristic Industrial Park

Project Ideas: Relying on the standardized workshop completed in the Western Yunnan Biological Characteristic Industrial Park, we will introduce advanced production technology, take the intensive processing of tea products of Lincang Yanyu Tea Industry Co., Ltd. as an example, accelerate the research and development and production of tea, tea element cosmetics and other products, promote the quality and efficiency of tea, gradually enhance the brand influence of "Lincang Tea" and promote the upgrading and development of the tea industry in Linxiang District.

Project Content: one production line for 500 tons of "pure Pu'er" products and one production line for intensive processing of tea element food and household necessities products.

Large-scale Tea Products Trading Market:

Project Site: Linxiang District

Project Ideas: we will talk about the tea trading market with Dounan Flower Industry Group, and plan to introduce enterprises to build a large-scale tea trading market with unified and standardized quality and safety control, product quality traceability, counterparty trading, auction trading, e-commerce and futures trading based on Asia Microfilm Convention and Exhibition Center in Lincang, and build an online and offline trading platform to enhance the popularity of Linxiang tea brand and push Linxiang tea to the whole country.

Project Content: tea product trading zone, product exhibition center, tea e-commerce platform, tea industry information service system, warehousing and logistics center.

Tea Expo:

Project Site: Linxiang District

Project Ideas: we will take tea culture as the core, and build a reception room of Lincang tea city that integrates features of experience, cultural creativity, green product shopping, mass entrepreneurship and innovation of intangible cultural heritage and other functions. With "Lincang Tea+X" as the core, we will promote the integration of tea with the Internet, capital and cultural tourism, and inject new kinetic energy into the Lincang tea industry.

Project Content: Tea Expo, Tea Finance Center, Science and Technology Innovation Center, Inspection and Identification Center, Cultural and Creative Exchange Center, Tea Life Experience Center, Exhibition Center and Logistics Service Center.

Bangdong Township Xigui International Tea Culture Characteristic Town

Project Site: Bangdong Town, Linxiang District

Project Ideas: Focusing on the theme of Xigui ancient tree tea culture and caravan culture, we will build the brand of "Linxiang Xigui Tea", focusing on Linxiang Xigui Tea, fully excavating the historical culture of Xigui Neolithic Site, Xigui Gali Ferry, etc., integrating science and technology experience technology, integrating various tea categories along the Lancang River, and building a Tibetan teahouse in Yunnan tea brand, forming a conceptual interactive space integrating exhibition, sales, tea ceremony and entertainment.

Project Content: Tea culture exhibition, commercial street, tea factory, tea trading center, tea garden sightseeing, tourist service center, hillside hotel, water entertainment project, etc.

4. Operation Mode: we will build the operation and development mode of "government+association+enterprise+finance+talents".

Project Advantages

1. Industrial Basis/Resource Advantage

1. Industry Analysis:

Upstream: Linxiang District has a wide tea planting zone, high quality and strong tea industry basis, which is the advantage link of the whole industrial chain.

Middle reaches: There are a large number of tea enterprises in Linxiang District, which are small in scale and have not formed a unified brand. It is urgent for an enterprise with strong investment strength to integrate tea resources and brands. In addition, most of the products are primary processed products, and the tea resources are not fully utilized, and they are in the weak link of the tea industry chain. Developing intensive processing and researching new products have become the development direction that is focused on.

Downstream: At present, the tea consumers and market in Linxiang District are relatively fixed, mainly focusing on "tea sold to the border area", expanding the market and finding new target customers, which is a new channel to extend the downstream of the industrial chain.

2. Natural Resource Advantage: Linxiang District has the most suitable natural conditions such as light, temperature, moisture and soil for tea tree growth.

Linxiang District belongs to the south subtropical monsoon climate, and the three-dimensional climate in mountainous areas changes significantly, with the lowest altitude of 730 meters and the highest altitude of 3,429 meters, the annual average temperature of 16.8-17.7℃ and the annual accumulated temperature of 6,359℃, and there is no obvious cold throughout the year. The sunshine time is long, and the average sunshine hours over the years are 2119 hours. The frost-free period is 289 days throughout the year, with less heavy frost and more light frost. The district has abundant rainfall with distinct dry and wet seasons, with an average rainfall of 1163.9 mm over the years.

The environment, climate, rainfall, soil, and other conditions in Linxiang District satisfy the growing need for tea. Besides, it is located near the Tropic of Cancer in the subtropical zone, which is endowed with a pleasantly warm climate, abundant sunshine, low latitude, large altitude drop, abundant water resources, red soil with a slightly acid PH value. All these factors constitute the most suitable environment for tea tree growth. It has created one of the world-famed original areas for producing teas and the hometown of ancient tea trees in the world.

2. Supporting Conditions

Lincang Western Yunnan Biological Characteristic Industrial Park

Location: The park is located in the downtown area of Lincang, guarding its north gate. It is only 0.4 km east from Lincang Railway Station, 1 km north from Lincang North Exit of Mojiang-Lincang Expressway, and 3.5 km south from the city center.

Scale: The total area of the park is about 588 mu while the building area is about 430,000 m². It has a total investment of approximately RMB 4 billion. The project is planned in two phases. At present, 11 workshops with 100,000 m² in the first phase have been completed, and the remaining 70,000 m² are expected to be completed in the first half of 2022. At present, the second phase (220,000 m²) has also started, and it is planned to be fully completed by the end of 2023. Upon completion, it will become the largest standardized and intensified industrial park in Lincang and even the whole of western Yunnan.

Transportation: The whole park has two municipal service roads directly to the downtown, with Xianglin Highway in the west and Lincang West Ring Road in the north. The outward transportation is very convenient. In the meantime, eight intertwined roads (four vertical and four horizontal) have been built in the park to form a well-developed internal traffic network.

Supporting Industrial Facilities:

Ancient tea tree resources: Linxiang District is rich in ancient tea tree resources, excellent in tea quality, and profound in tea culture. There are many wild and cultivated ancient tea gardens. In particular, Bangdong Xigui Tea is praised as one of the top three famous Pu'er teas in Yunnan (Xigui Tea, Bingdao Tea, and Banzhang Tea); The ancient tea trees in Linxiang District are generally classified into wild type and cultivated type. The commonly seen varieties are Bangdong Black Leaf Tea and Mengku Big Leaf Tea that have been planted in the land covering a total area of about 47,436 mu. Among them, there are about 25,000 mu of wild ancient tea trees, mainly distributed in Nanmei Township and Boshang Town. There are about 22,436 mu of cultivated ancient tea trees, mainly distributed in Bangdong Township, Matai Township, and Mayidui Township. There are 7 tea enterprises above designated size in Linxiang District, 3 provincial-level leading enterprises, 5 municipal-level leading enterprises, 472 primary tea processing factories, and 35 cooperatives. In 2020, there are 51 enterprises with SC certification, 1 enterprise with ISO certification, 5 enterprises with organic tea certification, and 35 professional tea cooperatives.

The project is not located in water source conservation area, public welfare forests, and national nature reserves, which therefore does not interfere with ecological protection redline and basic farmland.

3. Location and Transportation

Location: Linxiang District is 598 km away from Kunming, the provincial capital of Yunnan. The Belt and Road Initiative, the construction of the "Bangladesh-China-India-Myanmar Economic Corridor" and the implementation of the Development Strategy for Yunnan to be A Radiation Center Linking South Asia and Southeast Asia have brought unprecedented opportunities to boost Linxiang.

Linxiang is 154 km away from National Qingshuihe River Port and 1035 km away from Kyaukpyu, Myanmar. It is not only the central node of China's land shortcut to Southeast Asia and Southeast Asia inland, connecting the Pacific Ocean and the Indian Ocean, but also the "window" of Yunnan facing South Asia and Southeast Asia.

Transportation: In 2020, after Dali-Lincang Railway and Mojiang-Lincang Expressway had been opened, the "five in one" transportation hub based on aviation, railway, and expressway has been comprehensively developed, which, as a result, formally integrate Linxiang into the 4-hour economic circle of Kunming.

4. Future Development Opportunities of the Project

Yunnan is a province favored by a large number of tourists, and Lincang is equipped with the same function that attracts tourists. The tea industry is one of the pillar industries of Lincang's economy, Behind it, there is a profound tea culture with rich factors. Therefore, combining tea culture and local ethnic culture with the comfortable and picturesque natural landscape is one of the directions for Lincang to develop the tourism industry and make a breakthrough, which is also in line with the current mainstream market consumption demand.

Element Guarantees

1. Production Operation Cost

Water Supply Price: RMB 3.45/m³ for residential water under Category 1, and RMB 5.6/m³ for water and industrial and commercial water under Category 3.

Electricity Price for General Industries and Businesses: RMB 0.535/kW·h for non-industrial and general industrial electricity consumption less than 1 kV; RMB 0.525/kW·h for non-industrial and general industrial electricity consumption more than 1 kV and less than 10 kV; RMB 0.515/kW·h for non-industrial and general industrial electricity consumption more than 35 kV and less than 110 kV.

Wage Standard for Labor Force: RMB 2,500/month for accountants, RMB 3,000/month for office clerks, and RMB 2,200 to 2,800/month for salesmen.

2. Raw Material Supply Cost

The tea planting area in Lincang City and Linxiang District is expansive and has a high yield of quality tea, which can provide a reliable raw material base for the project.

Project Policy Support

1. Business Environment Improvement

The optimized business environment in Linxiang District can promote high-quality development.

Ø    Implementation opinions on optimizing the business environment and "ten majors actions" for improving the business environment are formulated;

Ø    The reform of "Streamline Administration, Delegate Power, Strengthen Regulation and Improve Services" will be continuously deepened so as to reduce the institutional transaction costs.

Ø    Major issues will be accepted and handled immediately in order to realize the policy of "handling affairs by one visit only";

Ø    Policies of "Five-in-one Business License with One Social Credit Code", "Integrating Certificates into One, "Permit-License Separation" and "Simultaneous Handling of Business License and Certificate Application" are carried out;

Ø    The enterprise processes and links will be further simplified and optimized and the processing will be shortened. The enterprise registration will be handled within 5 working days;

Ø    The 10% reduction in the average price for industrial and commercial electricity consumption has been effectively implemented, and the power market reform has been continuously deepened.

Ø    The application of "services on one mobile phone" will be further promoted.

2. Fiscal and tax preferential policies at all levels available to enterprises such as provincial/municipal/district/county/park investments

1. Measures to Encourage Investment by Leading Enterprises in the Green Food Industry in Yunnan Province (Trial) (YCG [2018] No.3): For enterprises that newly invest more than RMB 1 billion (included) such as planting, processing, cold chain logistics, etc., Yunnan Provincial Finance Department will give a one-time grant according to 10% of the investment amount.

2. Notice of Lincang Municipal People's Government on Printing and Distributing Preferential and Incentive Policies for Investment Attraction (Trial) (LZF [2020] No. 36): For enterprises that have a new project with an investment amount of more than RMB 50,000,000 (excluding land cost), after the project is completed and put into operation on schedule, Lincang Municipal Finance Department will give a one-time reward of 2% of the investment; New projects with annual actual utilization of foreign capital of more than 10,000,000 to 30,000,000 US dollars and capital increase projects of more than 5,000,000 to 10,000,000 US dollars that are newly built in Lincang will be rewarded by Lincang Municipal Finance Department with 1% of the actual utilization of foreign capital in the current year.

3. Ten Policies and Measures to Support the Development of Industrial Issuing in Lincang (Trial): Enterprises can enjoy fiscal and taxation policies, preferential rent policies, investment incentives, employment subsidies, contribution incentives, and financing discounts.

Benefit Analysis

After the completion of the project, the profit will be obtained from sales and the patent transfer of tea products. After the year in which production reaches design/expected capacity, it is expected that the main business income will be RMB 600,000,000 per year, the total profit will be RMB 420,000,000 per year, the return on investment will be 13.91%, and the total investment payback period will be about 7.19 years.

Investment Promotion Direction

Tea planting enterprises, tea research and scientific innovation enterprises, tea intensive processing enterprises, tea e-commerce platforms, tea supply chain enterprises, etc.

Cooperation Pattern

Sole proprietorship, joint venture and cooperation

Contact Information

Contact Authority: Linxiang District Investment Promotion Bureau, Lincang Municipality

Contact Person: Xu Desheng, Wang Jintao

Tel.: 13529611330, 18988321709

Fax.: 0883-2166339

E-mail: lxzshz2166339@163.com