1 Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Biomass fiber digestible polysaccharides refer to the use of polysaccharide components in biomass fibers to convert them into digestible polysaccharide forms through enzymatic hydrolysis or other biotechnological means. This polysaccharide not only has a high digestibility, but can also replace some traditional feed components in livestock and poultry breeding, thereby reducing breeding costs and improving feed efficiency.

Single cell protein (SCP), also known as microbial protein or bacterial protein, is a protein resource obtained by large-scale cultivation of single celled organisms such as bacteria, yeast, microalgae, and simple multicellular organisms such as molds using various industrial and agricultural waste and other nutrients. It can be directly added as a protein source for humans and animals to human animal feed.

The production of single-cell protein feed has the following characteristics: abundant raw materials that can turn waste into treasure, such as various organic waste, waste liquids from the brewing and starch processing industries, pulp, molasses, etc. can all be used as raw materials; The production equipment is relatively simple, the production cycle is fast, and the efficiency is high. Under suitable conditions, bacteria can multiply in one hour, yeast in three hours, and microalgae in six hours.

The construction site of the project is located in Meihekou City, using agricultural and forestry residues such as straw as raw materials to produce biomass fiber digestible polysaccharides and single-cell proteins, achieving comprehensive recycling and reducing feed enterprise costs.

1.1.2 Market prospect

(1) The situation of China’s industrial feed market

The development speed of feed intensification and scale in China is getting faster and faster. According to the Feed Association, from 2018 to 2023, China’s total feed production increased from 237.63 million tons to 321.627 million tons.

Due to factors such as the optimization and adjustment of pig production capacity and the failure of livestock product consumption to recover to expected levels, feed production has experienced a high-level decline. The total output of industrial feed in China was 145.39 million tons, a year-on-year decrease of 4.1%. Among them, the production of compound feed, concentrated feed, and additive premixed feed decreased by 4.0%, 10.8%, and 0.7% year-on-year, respectively.

The raw materials required for the production of feed in the feed industry include bulk commodities such as corn, soybeans, and fish meal, which are the main components of feed product costs. Therefore, the price fluctuations of upstream main raw materials have a significant impact on costs.

In the first half of 2024, the prices of major feed ingredients such as corn and soybean meal saw a significant decline. The average purchase prices of corn and soybean meal for feed enterprises were 2524 yuan/ton and 3680 yuan/ton, respectively, a year-on-year decrease of 13.2% and 17.0%. Driven by the price comparison effect of meal types, the prices of cotton meal and rapeseed meal were 3746 yuan/ton and 2841 yuan/ton, respectively, a year-on-year decrease of 10.1% and 14.6%. Affected by the fishing suspension in Peru in 2023, the price of imported fish meal remains high, with an average purchase price of 14697 yuan/ton in the first half of the year, an increase of 8.6% year-on-year. The amino acid market is mainly on the rise, while vitamins and mineral elements are running weakly.

(2) China’s straw feed market

China is the world’s largest livestock producer and also the largest demand for feed grains. To ensure food security, it is necessary to ensure both food security and feed security. In recent years, the import volume of grain has remained high and prices have continued to rise, posing a serious threat to China’s feed and grain security.

The Report of the 20th National Congress of the Communist Party of China proposed that we should consolidate the foundation of food security in an all-round way to ensure that the Chinese people’s jobs are firmly in their own hands. With the gradual improvement of the living consumption level of Chinese residents, their consumption of grains is gradually decreasing, but their consumption of meat, eggs, and milk is increasing year by year. At present, the basic food security in our country lies in the safety of feed and food. At present, the main feed materials for aquaculture are corn and soybean meal, with over 90% of imported corn and soybeans used as feed each year. When the supply of corn and soybean meal is insufficient and prices are too high, grains such as wheat and rice will be used as substitutes, posing a threat to the food supply. Therefore, ensuring the safety of feed grains is the key to ensuring agricultural and food security.

China’s total grain output has remained stable at over 650 million tons for several consecutive years, but the proportion of grain used for feeding is relatively large. In 2023, China’s consumption of grain for animal feed will be 395 million tons, accounting for 48% of the total grain consumption, significantly higher than 33% of grain consumption and 17% of industrial consumption. According to the forecast of meat, egg and milk consumption demand in 2035, the demand for corn and soybeans mainly used for feed in China will increase to 344 million tons and 138 million tons respectively, with a feed supply gap of over 76 million tons. Due to the limitations of China’s national conditions and resource endowment, domestically produced corn and soybeans cannot meet the demand due to factors such as cultivated land area and yield per variety. In order to address the food security risk of high dependence on imported soybeans and corn in China’s animal husbandry industry, the Ministry of Agriculture and Rural Affairs has proposed action plans for “low protein feed” and “reduced substitution of corn and soybean meal” for livestock and poultry farming.

As a major producer of grain crops, China has abundant straw resources, which contain a large amount of usable nutrients such as fiber and crude protein. Straw is a good coarse feed resource for herbivorous animals such as cattle and sheep. For example, corn stover has a neutral detergent fiber content of 69.1% -82.5%, an acidic detergent fiber content of 37.2% -47.1%, a crude protein content of 4.9% -8.7%, and a crude fat content of 1.4% -1.7%. They are all essential “grains and cereals” for cattle and sheep. If scientifically processed to improve their nutritional quality, they may even replace high-quality forage as the “main food” for herbivorous animals.

Straw feed conversion has become an important agricultural method for straw, playing an important role in filling the gap of high-quality forage, ensuring the supply of livestock products, and promoting the efficient integration of planting and breeding industries. In 2023, the national straw production will be 1.05 billion tons, with a collectable amount of 737 million tons. The annual utilization of straw for feed will be 186 million tons, accounting for 20.7% of the total utilization.

The crude fiber content in crop straw is very high, generally above 65%. Its composition mainly includes three main components: cellulose, hemicellulose, and lignin (among which cellulose and hemicellulose are similar to starch and are also polysaccharides composed of various reducing sugars such as glucose and xylose). These three components will be twisted into a network structure to resist degradation by natural microorganisms. Therefore, the reducing sugars contained in straw are difficult to be biologically utilized.

At present, the utilization of straw is mainly achieved by physically crushing it into different particle sizes and directly adding it to feed as raw material, with extremely low biological utilization efficiency. In monogastric animals, due to the lack of lignocellulosic enzymes, they cannot be utilized, and only a small portion is utilized by microorganisms in the hindgut. Due to the presence of cellulase in the rumen of ruminants, it can be partially utilized. However, due to the dense anti degradation structure of straw, even in the rumen of ruminants, the degradation efficiency is very low, generally not higher than 30%, and the bioavailability is still very low.

The project uses agricultural and forestry residues such as straw as raw materials, and adopts biomass esterase technology, high protein strain breeding, and high solid continuous fermentation technology to produce biomass fiber digestible polysaccharides and single-cell proteins, which can achieve comprehensive recycling, reduce feed enterprise costs, and have a broad market prospect.

1.1.3 Technical analysis

The project integrates the biomass esterase technology (enzymatic hydrolysis and conversion technology for straw structure) and high protein strain breeding and high solid continuous fermentation technology developed by Tianjin Institute of the Chinese Academy of Sciences, and solves the problem of utilizing agricultural and forestry waste such as straw through pre-disposal processes such as explosive harvesting, enzymatic hydrolysis, and fermentation. It establishes an advanced technology system for the production of biomass fiber digestible polysaccharides and single-cell proteins based on agricultural and forestry straw residues.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The Guiding Opinions on the Comprehensive Utilization of Bulk Solid Waste in the 14th Five-Year Plan proposes to vigorously promote the comprehensive utilization of straw and improve the quality and efficiency of the straw comprehensive utilization industry. Adhere to prioritizing agricultural use, continuously promote the utilization of straw as fertilizer, feed, and base material, and give full play to the functions of straw farmland conservation and the combination of planting and breeding.

The Action Plan for Peaking Carbon Emissions Before 2030 proposes to accelerate the high-value utilization of straw, improve the collection, storage, and transportation system, and strictly prohibit burning and control. By 2025, the annual utilization of bulk solid waste will have been around 4 billion tons, and by 2030, it will have reached around 4.5 billion tons. Strengthen the comprehensive utilization of crop straw and the resource utilization of livestock and poultry manure.

In March, 2021, the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs issued a notice on promoting the reduction and substitution of corn and soybean meal, focusing on the implementation of the Plan for Reducing and Replacing Corn and Soybean Meal in Feed. The key requirement of the plan is to promote the reduction and substitution of corn soybean meal in feed with grains and miscellaneous meal, and to clarify the task division and schedule. It is required to develop the formula before the end of March and set the promotion target before the end of April.

In 2023, the General Office of the Ministry of Agriculture and Rural Affairs issued the Three-Year Action Plan for Reducing and Replacing Feed Soybean Meal, proposing that by implementing the action of reducing and replacing feed soybean meal, a feed formula structure suitable for China’s national conditions and resource characteristics will be basically constructed, and a database system for available feed resources, a low protein high-quality feed standard system, an efficient feed processing and application technology system, and a feed saving policy support system will be initially formed. The conversion efficiency of livestock and poultry feed will be significantly improved, and significant results will be achieved in saving food and reducing consumption in the breeding industry, achieving “one reduction and two increases”. The application of low protein diet technology, precise feed formula and fine processing technology, combined with the use of efficient feed additives such as synthetic amino acids and enzyme preparations, reduces the protein content demand in pig and poultry feed, reduces feed protein consumption, and effectively improves feed protein utilization efficiency.

(2) Location and transportation advantages

Meihekou has prominent location advantages and is an important regional center city in Northeast China. Meihekou is located in the southeast of Jilin Province and is an important transportation hub and commercial port town in the northeast region. It is an important node city in the central and eastern parts of Jilin Province and a regional center city in the southeast. Together with Changchun, Jilin, and Siping, it forms four important nodes in the province, and integrates with more than 10 counties and cities in Jilin and Liaoning provinces, radiating and driving more than 4 million people in the surrounding areas.

(3) Resource advantages

During the 14th Five Year Plan, Meihekou will be granted more autonomy in land use, project approval, and industrial development to the high-tech zone, allowing for early experimentation. And it will focus on enhancing the flexibility of land management, providing ample construction land for project construction.

The grain sowing area in Meihekou City is 109000 hectares, including 28200 hectares of rice, 78100 hectares of corn, 2000 hectares of soybeans, and 700 hectares of potatoes. It can provide sufficient raw materials for the project.

In addition, Meihekou City regards the promotion of comprehensive utilization of crop straw as the focus of developing ecological circular agriculture, focusing on the construction of straw comprehensive utilization mechanism and industrial cultivation, promoting the transformation and utilization of straw into fertilizer, energy, feed, and raw materials, and providing effective guarantees for the construction of projects.

(4) Industrial advantages

In 2023, the total number of livestock and poultry development in Meihekou City will be 8.7447 million, including 203300 live pigs slaughtered and 137100 in stock; 6.2145 million poultry were slaughtered and 2.098 million were in stock; 35900 cattle were slaughtered and 39800 were in stock; there are 7600 sheep slaughtered and 8200 in stock. At the end of the year, the output of freshwater aquaculture was 5986 tons, and the output of fish fry was 392 million. This year, 442 tons of spring fish were released from the pond, and 411 tons of autumn fish were transferred to the wintering pond. This has laid a solid foundation for the construction of the project.

1.2 Contents and scale of project construction

1.2.1 Product scale

After the project is completed, it will produce 300000 tons of biomass fiber, digestible polysaccharides, and single-cell proteins annually.

1.2.2 Construction contents of the project

The project covers an area of 200 acres with a building area of 11000 square meters. It mainly constructs the production plant, warehouse, and purchases related production equipment.

1.3 Total investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of the project is 380 million yuan, including the construction investment of 304 million yuan and current funds of 76 million yuan.

1.3.2 Capital raising

Self-financing by the enterprise

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales revenue will be 445 million yuan, its profit will be 63 million yuan, its investment payback period will be 8.1 years (after the tax, including the construction period of 2 years) and its return on investment will be 16.6%.

Note: “10 thousand yuan” in the table is in RMB.

1.4.2 Social evaluation

Through the construction of the project, biomass fiber can be used to produce digestible polysaccharides and single-cell proteins, which can effectively replace corn and soybean meal. At the same time, it increases the ways of recycling agricultural and forestry residues such as straw, which is an important measure to promote the green and sustainable development of animal husbandry. It also has a great promoting effect on increasing farmers' income and employment.

1.5 Cooperative way

Joint venture or cooperation, and other methods can be discussed face-to-face.

1.6 What to be invested by the foreign party

Funds, and other methods can be discussed face-to-face.

1.7 Construction site of the project

Meihekou City, Jilin Province

1.8 Progress of the project

It is attracting foreign investment.

2. Introduction to the Partner

2.1 Basic information

Name: Management Committee of Jilin Meihekou New and High-tech Industrial Development Zone

Address: 555 Kangmei Road, Guangming Neighborhood, Meihekou City, Tonghua City, Jilin Province

2.2 Overview

The predecessor of Jilin Meihekou New and High-tech Industrial Development Zone was Meihekou Economic and Trade Development Zone established in February, 2002, covering an area of 5 square kilometers. In December, 2019, it was designated as a provincial-level high-tech zone by the provincial government, with a total planned area of 29.82 square kilometers. Ranked first in the comprehensive evaluation of provincial-level development zones in the province, and second in the comprehensive evaluation of provincial-level development zones in 2020, it has successively won honorary titles such as “National Torch Meihekou Modern Traditional Chinese Medicine Characteristic Industry Base”, “Jilin Province Pharmaceutical New and High-tech Characteristic Industry Base and Pharmaceutical Health Industry Characteristic Park”, “Jilin Province New and High-tech Industry Agglomeration Zone”, “National Best Investment Environment Industrial Park”, and “China’s Most Promising Industrial Park”.

Meihekou New and High-tech Zone has deeply implemented the “4+3” industrial system, planned the industrial development pattern of “Five Parks, One City, One Center”, and built a pharmaceutical and health industry park, a health food industry park, a modern logistics industry park, a construction and supporting industry park, a chemical industry park, a special medical food city, and a Northeast Asia nut distribution center. It has successfully introduced leading enterprises in industries such as Sihuan Pharmaceutical Co., Ltd., Buchang Pharmaceutical Co., Ltd., Tianheng Pharmaceutical Co., Ltd., Lunan Pharmaceutical Co., Ltd., Luzhou Laojiao, and Chuanhua Logistic Co., Ltd.. Since the 13th Five-Year Plan, a total of 42 billion yuan of fixed assets investment has been completed, and 3778 registered enterprises have been added. It has successively won honorary titles such as the National Torch Traditional Chinese Medicine Characteristic Industrial Base, the National Industrial Park with the Best Investment Environment, and the Industrial Park with the Most Development Potential in China. It has ranked among the top 2 in the comprehensive strength assessment of the provincial development zones for four consecutive years. By 2023, the total output value of enterprises above the designated size have reached 10.33 billion yuan, accounting for 77.9% of the city’s total.

2.3 Contact method

Postal code: 135000

Contact person: Zhang Yizhen 

Tel: +86-13630716007

E-mail: mhxqjhj@163.com 

Contact method of the city (prefecture) where the project is located:

Contact unit: Meihekou Bureau of Commerce

Contact person: Mu Zhanyuan

Tel: +86-15643552255

+86-435-4326686

E-mail: 4965278@qq.com