Dear Ladies and Gentlemen, Good Evening !
It is a great honor to meet all of you here tonight, to attend this Invest and Media Conference , for the licorice project of Gansu Xairui Sand Industry Co, Ltd, which was founded and created and updated , by US Blue Sky Capital, LLC, and Ningxia Xiarui Biotech Company Ltd, on 10-25-2013 , and updated on 09-03-2014 at Gaotai County, Zhangye City , Gansu Province , China. Thank you very much for your nice coming and presence. I wish that you will have a pleasant and
profitable moment tonight!
Now I would like to take this opportunity to speak something about this company:
- We started this licorice project by building our factory on 10-12-2013, and founded Gansu Xiarui Sand Industry Co. Ltd, on 10-25-2013 and updated into US Sino Joint Venture on 09-03-2014, with US Blue Sky Capital, LLC sharing 51% ofstocks and Ningxia Xiarui Biotech Co. Ltd sharing 49% of stocks . Now the updated structure of this company is : Total equity of Xiarui is 150,000,000 shares. Among the total equity, 100,000,000 shares are non-tradable, 51,000,000 shares of which are held by Yu Xiang Min, and 49,000,000 shares are held by Xue Zhi An. There are a total of 50,000,000 tradable shares, 22,730,000 shares of which are held by 37 individual investors (the capital corresponding to 22,000,000 shares has not settled yet). The other 27,270,000 tradable shares are available for sale.
- We have purchased 150 mu land for industrial production at Nanhua Industrial Park, Gaotai County , Zhangye City, Gansu Province China , and have rented for 50 years 50, 000 mu land for agricultural planting licorice on Badan Jilin Desert located at Xusanwan Village, Xinba Town, Gaotai County, Zhangye City, Gansu Province, China. Licorice is the king of all the Chinese traditional medicine herbs , also called Guolao, No. 1 Traditional Chinese Medicine herb.
- We have nearly finished the building of 7 big workshops , one licorice extraction main building , one office building and one dormitory building with restaurant , ete. Ready to finish all buildings , to put in equipment, even if a little funds in. On the 50K mu of licorice planting basis, we have built road of 32 meters, one big dam, two big reservoirs , one big well, get electricity , etc. Ready for planting licorice .
- Our Aims: To Create wealth and resources out of the desert by planting licorice 100K mu land on the desert ; To Create electricity by using solar energy on the desert ! To Change Sand into Gold! To Create Oasis out of the desert!
- Total amount of funds to be invested : 700 Million RMB, including 120 Million for factory completion ; 475 Million RMB for licorice planting ; 110 Million for solar energy generating electricity. At this moment, USD 20Million is needed to make sure that this project begins to make money, to move on to the success .
- 22 Products and twelve No. 1 Items in the world . Gansu Xiarui Sand Industry Co. Ltd has a total of 22 different products. Early Stage Product:
- Qilian nectar – Natural Qilian Mountain Mineral Water Products from Early Processing:
- Licorice Leaf Tea;
- Licorice Drink;
- Licorice chops;
- Products from Deep Processing:
- Ai Sike;
- Hepatitis B Xin;
- Hepatitis C Xin ;
- Licorice lavonoid;
- Glycyrrhizic acid;
- Licorice monosaccharide;
- Glycyrrhetate salt;
- Glycyrrhizic acid ammonium salt;
- Glycyrrhetate potassium;
- Glycyrrhetinic acid;
- Acetyl Glycyrrhetinic acid;
- Glabridin;
- Qilian Mannan(Drinks);
- Licorice Capsules;
- Mildew denaturant I;
- Mildew denaturant Ⅱ;
- Alcoholics;
- Earthworms aquaculture in licorice waste residue.
- Regulate cultivated licorice in fifty thousand mu without pesticides, chemical fertilizers or heavy metals;
- Establish three natural flood storage water reservoirs on fifty thousand mu licorice cultivation base;
- Qilian nectar is the single plant beverage;
- Integrate licorice cultivation of raw materials, industrial extraction and trade sales of industrial integration;
- Perform the technology of planting licorice humic special fertilizer, tracing elements "Cugenbaobusuan", and the amino acid foliar fertilizer to solve the pesticide residues, fertilizer residue and heavy metal residues;
- Being industrialized in roder to reach tons of raw materials extracted ultrasonic technology;
- Extract licorice flavonoids to solve the problem of AIDS prevention and treatment, hepatitis B and C;
- Extract Glabridin to solve global malt worms and green mold Botrytis denaturant;
- Extract from licorice to get Mainz acid whitening solution, enhanced cosmetic effect;
- Extract licorice residue then reuse humic special fertilizer for plant technology;
- Extract licorice residue for production of polymer MDF technology;
- Earthworms aquaculture in licorice waste residue.
- Profit Model .
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Qilian nectar – Natural Qilian Mountain Mineral Water Gansu Xiarui Sand Industry Co. Ltd will produce Qilian nectar – Natural Qilian Mountain Mineral Water, targeting the high end mineral water market in china.
According to market definition, high end bottled mineral water usually has a high-end brand image,and is sold no less than RMB 5 Yuan per 500 ml bottle. Some famous brands of the China high end bottled mineral water market include Evian, Volvic, Perrier, Tibet Spring 5100, Pamir and Laoshan Mineral Water, etc.
Currently the retail price for bottled water in China is approximately 2.5 Yuan/Liter, while the high end bottled mineral water could sell at 10-20 Yuan/Liter. According to market statistics, in 2013 production of bottled water totaled 66,510,000 tons (~66.5 billion Liter), and high end bottled water comprised approximately 10% of the market share. According to the above market size data, we calculate the profitability for Qilian nectar as follows:
- The total production volume for high end bottled water is estimated to be 6.65 billion liter.
- Assume our product could obtain market share of 1% within the high end bottled water industry.
- The total sales amount per year will be 66 million liter. If the water is sold at 10 Yuan/Liter, revenue per year can reach RMB 660 million Yuan.
- The average profit margin for mineral water industry in China is 20% (according to “Report of
- the China Mineral Water Industry” published in 2014). On the other hand, as high-end bottled water sells at a higher retail price, it enjoys a higher profit margin. Within the high end bottled water industry, some companies could reach a profit margin of 50% to 80%. If we use the lower end margin, the company’s annual profit will be RMB 330 million Yuan.
- With initial investment of 22 million Yuan, assume an annual sales growth rate of 5% and a 15% required rate of return for investors, the net present value for this project is RMB 3.3 billion Yuan.
- From another perspective, currently Gansu Xiarui Sand Industry Co. Ltd plans to introduce two production lines. If we calculate according to the full production capacity of 48,000 bottles per hour, our daily production can reach 1.15 million bottles, that is approximately 420 million
bottles annually. If each bottle sells at 5 Yuan and there is 50% profit margin, the total profit of our company could reach 1.05 billion Yuan. With the above stated initial investment, sales growth rate and required rate of return, the project yields an NPV of RMB 10.51 billion Yuan.
Among the above products, Qilian nectar – licorice drink is the single plant beverage; Ai Sike can be used for prevention and treatment of AIDS; Hepatitis B Xin and Hepatitis C Xin are used for treatment of Hepatitis B and C. Each unique product has a huge market potential. In summary, after the construction, the annual production value of the company could reach 42.5 billion Yuan, and annual net profit could reach 15.6 billion Yuan.
- Ways of drawing back investment fund and Profit . At the completion of construction, when this company is in full operation , the investors get 15% annual returns for investment and get cash back by selling shares of stocks when this company goes IPO in Wall Street in about two years.
In the terms of the agriculture and industrial production, Gansu Xiarui Sand Industry Co. Ltd is creating twelve No.1s in the world: