Construction Project of White Goods Manufacturing Base in Dehong Area of China (Yunnan) Pilot Free Trade Zone

Name

中国（云南）自由贸易试验区德宏片区白色家电制造基地建设项目

Construction Project of White Goods Manufacturing Base in Dehong Area of China (Yunnan) Pilot Free Trade Zone

Industry Involved

Advanced equipment manufacturing

Site

Import & Export Processing and Manufacturing Base, Ruili Industrial Park, Dehong Prefecture

Project Description

As an important gateway opening up to the southwest of China, Ruili has superior geographical location and regional traffic conditions. Taking advantage of the advantages of urban development and surrounding mineral resources in Ruili City, the project takes the construction of "the Belt and Road Initiative" as an opportunity, takes South Asia and Southeast Asia as the hinterland of the market, and uses preferential policies of taxation and foreign exchange management to build a white goods manufacturing base in Ruili City based on the import & export processing and manufacturing base of Ruili Industrial Park. Upon completion, it will become a white goods manufacturing base of China to the markets in South Asia and Southeast Asia.

Content

Construction scale: The project has a planned land area of 360 mu and a total floor area of 265,000 square meters, integrating such supporting functional zones as comprehensive office area, production area, warehouse area, staff quarter and canteen. Among them, the comprehensive office area, the production area, the warehouse area and the supporting area cover areas of 17,000 square meters, 210,000 square meters, 30,000 square meters and 80,000 square meters respectively.

Construction period: expected to be 2 years.

Supporting Conditions

1. The project is 445km away from Mandalay, 670km from Naypyidaw, 1,138km from Yangon and 866km from Kyaukpyu. It is 116 km from Ruili Nongdao to Bhamo, Myanmar. The product from Ruili, after a journey of about 1,000km via Lashio and Mandalay, can be directly exported to such ports as Yangon Port and Kyaukpyu without passing through the Strait of Malacca, thus entering the Indian Ocean.

2. Ruili is the core city of China's trade with Myanmar. In recent years, Ruili has given full play to its port economic and trade advantages and strengthened its trade with Myanmar. At the same time, it has coordinated the development of internal economy and optimized the structure of economic development, so that its overall economic development has stepped to a new level.

3. The park guarantees the timeliness and safety of electricity, water and road use of the project. Generally, the industrial electricity price is CNY 0.47/kWh, the industrial water price is CNY 2.65/ton, and the industrial gas price is CNY 2.59/m3. Labor force: According to DRSF [2013] No.69 document, it belongs to the second category (CNY 1,130). It, enjoying the advantage of special border port, is adjacent to Muse and other cities in Myanmar where labor resources are abundant with low prices.

4. Ruili and surrounding cities and counties as well as Myanmar are rich in mineral resources. Many production raw materials can be purchased locally or from surrounding cities and counties, and thus the cost of raw materials is relatively low.

5. Ruili has the dual advantages of abundant domestic production materials and consumer markets in Myanmar and Southeast Asia. Building a household electrical appliance processing factory at the frontier of the port can save production costs, with obvious advantages.

Investment Estimate and Fund Raising

The total investment in the project budget is CNY 774.44 million, including CNY 424.44 million in fixed assets, CNY 50 million in working capital and CNY 300 million in equipment and facilities.

Fund raising: Self-raising by enterprises, bank loan, etc.

Preferential Policies Applicable

In addition to the national western development policy, the project can also enjoy the support policy of Dehong Pilot Free Trade Zone. The Trial Measures for Investment Promotion in Dehong Area of China (Yunnan) Pilot Free Trade Zone guarantees the production of enterprises from various aspects such as industrial support, talent support and investment factor guarantee, and strongly promotes the project construction.

Market Prediction (Analysis)

The project has broad market prospects, and both domestic and foreign markets are the core markets for the development of white goods. The increasingly rational and quality consumer demand in the domestic market is forcing home appliance enterprises to accelerate the innovation in products, services and marketing modes, and the sales promotion war is spreading from middle- and low-end products to high-end products. Southeast Asian countries are basically in the development stage, and white goods manufacturing is still in the development stage. However, due to the continuous improvement of economic level, the demand for white goods is rising. The Southeast Asian market may be in short supply, which indirectly makes the Southeast Asian market an important market for development.

Profit Model and Preliminary Benefit Analysis

After completion, the main income will be obtained from the sales of white goods. It is estimated that the main business income will be CNY 435 million, the return on investment will reach 14.35, and the investment payback period of the project will be seven years (including the construction period).

Risk Analysis

The project may face certain risks in terms of policy, construction, market, interest rate (exchange rate) and operation, so possible preventive measures should be formulated.

Cooperation Pattern

Joint venture, cooperation, equity participation, PPP, etc.

Contact Information

Contact Unit: Investment Promotion Bureau of Ruili City

Contact Person : Yao Chenghu

Tel.: 13988252077

Fax: 0692 -4141253