I Project sponsor: Hubei Lianyi Industrial Group Co.Ltd

II Project Background:

Hubei Lianyi Industrial Group Co.Ltd was found in 1994, as a large-scale logistic enterprise managing purchase and sales of  metal material and steel scrap .It mainly deals with products of several state large-scale steel and iron enterprises such as Wuhan Iron and Steel Co. Ltd and Anshan Iron and Steel Co. Ltd.Its distribution network covers east china,central china ,north china and north west region. The company net assets of 216 million RMB,holding 6 subsidiary companies and 4 branch companies. It is entitle the “AAAA China Company Image ” by Chinese Enterprises Image Approving Committee, “5 –star Agency ” by Wuhan Iron and Steel Co. Ltd， “Fist class Agency ”by Anshan Iron and Steel Co. Ltd.， “AAA credit client” by China Construction Bank Hubei Provincial Branch consecutively .

The Huazhong Steel Processing &Distributing Center to be built is located under Wujin Bank,Baishazhou. It is 4 kilometers to No.3 Yangtze River Bridge,500meters to 107 state highway, 2000meters to Yangtze River deep water freight dock. There are railway private sidelines through the center. Therefore, It is an ideal large-scale logistic base with easy transportations and hard ware facilities.

III Project Contents:

Huazhong Steel Processing &Distributing Center occupies 176088 square meters(approximately 264mu) including floorage of 25396 square meters and open depot of 15000 square meters. The supporting facilities up to now are : 2 private sidelines,2 20 tons ternary cranes,1 16 tons mobile Crane  ,6 benzene jar of around 900 cube meters,1 carbinol jar of around 150 cube meters,1 dynamotor group of 180W and 1 50-ton electronic weighbridge. The total investment is 2.14billion RMB with intangible assets of 90 million RMB, investments on fixed assets of 1.16billion RMB and current capital of 8 million RMB.

The project is to build:

1 8 iron cutting processing lines including 4 hot ,cold rolling production lines.The workshop is to occupy 12400 square meters with a total investment of 33.81million RMB.

2 2 steel member production lines. The workshop is to occupy 4000 square meters with a total investment of 9.4million RMB.

3 2 stainless steel production lines.The workshop is to occupy 4000 square meters with a total investment of 9.4million RMB.

4 The workshop is to occupy 4000 square meters with a total investment of 9.4million RMB.

5 The storage area is to occupy 110000 square meters including indoor area of 10000 square meters and open depot area of 100000 square meters. The total investment is 9.45million RMB.

6 The distributing area is to occupy 10000 square meters with a total investment of 15million RMB.

7 Office and residential area is to occupy 10000 square meters with a total investment of 9.4million RMB.

8 The total investment in public area is 6.2million RMB.

The project will be completed in three phases ,the first phase project is under planning.

IV Predicted economic profits

Upon the accomplishment of this project, its holding capacity could reach 1.5million tons/year, iron processing capacity could reach 0.8millioin tons/year, steel member production could reach 0.1 tons/year, and stainless steel processing capacity could reach 30000 tons/years. There will reach the annual revenue of 7.5 million RMB,annual cost of 47.47million RMB, retained profits of 47.18million RMB,annual tax of 37.58million RMB, and total pre-tax profit of 84.77million RMB. The payback period of investment is 3.55 years with invest profit rate of 22%

V Approach to Cooperation: cooperation , lease , investment on single project.