International Small Agricultural Machinery Processing and Trading Industrial Park Project in Dehong

Project Name

德宏国际小农机加工贸易产业园项目

International Small Agricultural Machinery Processing and Trading Industrial Park Project in Dehong

Project

Industry

Advanced Equipment Manufacturing Industry

Project Site

The processing and manufacturing area will be the Ruili Import & Export Processing and Manufacturing Base or the Zhangfeng Special Industrial Area. The exhibition and sales area will be the Dehong Area of China (Yunnan) Pilot Free Trade Zone.

Project Overview

As a large agriculture-based country, Myanmar mainly imports agricultural machinery parts from abroad and assembles them domestically. Compared to other developed agricultural countries, however, the utilization rate of agricultural machinery from planting to harvesting agricultural products is low in Myanmar. This project will give full play to Dehong's advantageous conditions in the manufacturing and sales of agricultural machinery to build an agricultural machinery export and processing base integrating research and development, manufacturing, processing, sales, and service in Dehong.

Project Construction Content

Construction Scale: The project will take the International Small Agricultural Machinery Processing and Trading Industrial Park as the core and two areas (the processing and manufacturing area; the exhibition and sales area) as the support. The product R&D center, intelligent production & assembly workshop, warehousing workshop, logistics and transport workshop, comprehensive office building, and other supporting facilities will be constructed in the processing and manufacturing area. The trade management area, product sales area, e-commerce area, after-sales service area, and product experience & exhibition area will be constructed in the exhibition and sales area.

Land Area: The exhibition and sales area will be about 20 mu, and that for the processing and manufacturing area will depend on the enterprise's demand (ROI will be calculated according to 1,000 mu of land).

Supporting Conditions

1. Project Advantages and Opportunities:

Located at the intersection of China Economic Circle, South Asia Economic Circle and ASEAN Economic Circle, Dehong is an important hub and strategic node for China to implement the Belt and Road Initiative, promote the construction of Bangladesh-China-India-Myanmar Economic Corridor and serve as the radiation center for South Asia and Southeast Asia. As for aviation, the Dehong Mangshi Airport is accessible to 14 domestic and foreign cities including Beijing, Shanghai, Guangzhou, Chongqing, Xi'an, and Kunming in China, and Yangon and Mandalay in Myanmar; the Longchuan General Airport has passed the acceptance inspection and will be put into use in 2020. As for the railway, the Dali-Ruili Railway as the western part of the Trans-Asian Railway will be put into service in 2023. It will cross through Mangshi and Ruili in Dehong and directly connect Myanmar to the Indian Ocean outlet. The Dali-Ruili Railway is constructed in line with the national railway first-class standards and electrified railway standards, and its transport capacity is designed as 12 passenger trains per day and 12 million tons of freight transport per year. As for the road network, Dehong has the Hangzhou-Ruili Expressway, Ruili-Longchuan Expressway, Tengchong-Longchuan Expressway, and G320.

2. Associated Industries:

With open ports, import and export trade is prosperous. Dehong is the doorway of the China-Myanmar International Railway and Myanmar-China Oil & Gas Pipelines. It has three national Class I ports (Ruili, Wanding, and Dehong Mangshi Airport) and two national Class II ports (Zhangfeng and Yingjiang). Among them, Ruili is the largest land port for trade with Myanmar in China, with a total value of import and export of trade with Myanmar accounting for over 70% of the provincial totals and about 40% of the national totals. In 2019, the total value of import and export of Dehong came to RMB 37.028 billion, a year-on-year growth of 17.5%. Among them, the total export reached RMB 18.273 billion, up 3.7% year-on-year, and the exports included communication electronic products, hardware and machinery, household appliances, transportation and electrical products, chemical products, textiles, general merchandise, drugs, and agricultural production; the total import reached RMB 18.755 billion, up 34.9% year-on-year, and the imports included energy, agricultural and sideline products, grain and oil, minerals, aquatic (marine) products, animal by-products, cotton and linen, dry and fresh fruits, and Chinese medicinal herbs.

As there is sufficient labor, labor costs are low. According to statistics, there are about 500,000 rural surplus laborers in Dehong Autonomous Prefecture, including about 140,000 in Ruili City and Longchuan County, with a monthly wage of RMB 2,000 to 3,000. More than 100,000 foreign migrant workers work in Dehong, with a pay scale ranging from RMB 1,200 to 2,500, which is lower than that in Laos, Vietnam, Cambodia, and other countries. There are two junior colleges and a secondary vocational school in Dehong Autonomous Prefecture, with more than 5,000 graduates annually.

3. Early Preparations:

The land required by the Processing and Manufacturing Area can be purchased, stored, and adjusted according to the needs of enterprises; renting existing shops or self-building shops are allowed in the Trade Exhibition Area.

Investment Estimate and Fund Raising

Investment Estimate: RMB 2 billion.

Fund Raising: Self-raised by enterprises, bank loans, and other ways of financing.

Preferential Policies Applicable

Project investment can enjoy the preferential policies introduced by the governments of the State, Yunnan Province, and Dehong Autonomous Prefecture, as well as the preferential policies for investment attraction introduced by the governments of Ruili City and Longchuan County, and the Dehong Area of China (Yunnan) Pilot Free Trade Zone.

Market Prediction (Analysis)

Currently, the agricultural machinery products in China are mainly tractors, grain harvesters, corn harvesters, and rice harvesters. Various data of agricultural machinery in 2019 suggested that there were 40,020 large-sized tractors in 2019, down 1.12% year-on-year; 237,535 medium-sized tractors, up 11.13% year-on-year; and 340,071 small-sized tractors, up 3.13% year-on-year. Southeast Asian countries are important export markets for China's agricultural machinery, with a total export volume of agricultural machinery accounting for 40% of the national totals. Multiple countries like India, Bangladesh, and Sri Lanka, which are the key supportive targets of the Food and Agriculture Organization of the United Nations, are in great demand for various agricultural machinery products. In the future, the demand for agricultural machinery in Myanmar and other parts of South Asia and Southeast Asia will only see an increase but no decrease. Hence, if enterprises can combine the local market preferences with their own product advantages, they will be able to seize plenty of business opportunities.

Profit Model and Preliminary Benefit Analysis

After the project is completed, products can be sold in both domestic and overseas markets, and the income will mainly depend on agricultural machinery sales, technology transfer, and import and export trade. According to the current price of agricultural machinery, the annual income of the main business is expected to reach RMB 1.285 billion, with a payback period of about 6.3 years.

Risk Analysis

The project may face certain risks in terms of policy, construction, market, interest rate (exchange rate), and operation, so effective measures should be formulated for risk prevention and control.

Cooperation Pattern

Sole proprietorship, joint venture, cooperation, etc.

Contact Information

Contact Authority: Administration Committee of Longchuan County Industrial Park

Contact Person: Han Chunman

Tel.: 18988212477