1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

For containing saponins, polysaccharides, proteins, amino acids and other components, ginseng has the activities of regulating body immunity, anti-myocardial ischemia, antioxidant, anti-dementia and anti-aging, which is widely used in traditional Chinese patent medicines and simple preparations, health food, health food, cosmetics and other fields at present, and has the potential for the development of the whole industry chain and unique strategic value.

The project utilizes the ginseng planting resources in the Changbai Mountain Range of Shulan City to produce and process a series of products such as ginseng cosmetics and health food.

1.1.2 Market prospects

1. Development status of ginseng industry

(1) The current development status of the global ginseng industry

Ginseng is known as the "King of Hundred Herbs" and "Oriental Divine Grass" due to its magical medicinal and health benefits. It is a dual-use herb with high medicinal value. In addition to being widely used in formula medicine, it has also entered various fields such as health products, cosmetics, food, beverages, gifts, ginseng cigarettes, ginseng wine, ginseng sugar, ginseng tea, etc. In recent years, global ginseng production has steadily increased. The global ginseng production reached 84,677 tons in 2021, and the global ginseng production reached 97,321 tons in 2023. Currently, ginseng is mainly produced in seven countries including R.O.K., D.P.R.K., Russia, the United States, Canada, Japan, and China. Among them, China accounts for more than 80% of the global production. Data shows that the global ginseng market size reached approximately 46.6 billion RMB yuan in 2023, and is expected to maintain a steady growth trend in the coming years. By 2029, the market size will approach 89.6 billion RMB yuan, with a compound annual growth rate of about 9.6%.

(2) Development Status of Ginseng Industry in China

In recent years, the production and sales of ginseng in China have maintained a growth trend. In 2021, the output of fresh ginseng in China reached 69,850 tons, of which Jilin Province accounted for 56.78%, Heilongjiang Province accounted for 28.63%, Liaoning Province accounted for 7.37%, and the demand reached 70,031.9 tons. From the perspective of price trend, the average price of fresh ginseng in China has gradually declined since 2014. The average price of fresh ginseng in China was 121.4 RMB yuan/kg in 2021, and about 120.6 RMB yuan/kg in 2023.

From 2020 to 2023, the number of ginseng imports in China continued to grow due to the pandemic. The import quantity reached about 90 tons in 2023, a year-on-year increase of 21.8%. The import amount remained stable from 2022 to 2023, reaching approximately 32.29 million US dollars by 2023. From the source of imported products, in 2023, China’s ginseng imports mainly came from Canada, R.O.K. and the United States, of which Canada accounted for about 60%, R.O.K. accounted for about 26%, and the United States accounted for 15%. China is a large producer of ginseng. From the overall situation of China's ginseng import, China mainly imports refined products with high import value, small quantity but high added value. With the increase in domestic consumer income, the quality requirements for ginseng products have risen, which drives the industry's imports. In general, China's ginseng industry has a good import situation. The main competitive pressure comes from the rise of domestic ginseng brands and the improvement of ginseng processing technology.

Table 1 Quantity and Change of Chinese Ginseng Imports from 2017 to 2024 (Unit: ton,%)

From 2019 to 2021, affected by the pandemic, the ginseng export amounts in China continued to decline, reaching a low point in 2021 in recent years. Since 2022, exports have continued to rebound, reaching approximately 2070 tons by 2023, a year-on-year increase of 44%. The overall export value of ginseng shows a W-shaped trend. The amount of 2021 was a recent low point, with an export value of only 240,000 US dollars. The export value continued to rise from 2022 to 2023, exceeding 1.6 million US dollars by 2023, a year-on-year increase of 46%, and returning to the level of 2017. From the perspective of export destinations, the main export destination of ginseng in China was Japan in 2023, accounting for more than 40%, followed by Hong Kong and Taiwan, China, accounting for 23.8% and 16.9% respectively, and other regions accounted for less than 5%. In terms of average export price, the average export price of ginseng from 2017 to 2023 fluctuated within the range of 0.5-0.8 US dollars/kg. The average export price has slightly increased in 2022, reaching approximately 0.85 US dollars/kg in 2023, but overall it remained a relative stable status. In general, the ginseng export amounts in China decreased first and then increased, with a warming trend in 2023. From the perspective of export targets, about 40% of China's ginseng exports to Japan, and the average export price is relatively stable. In the long run, with the research and development of ginseng consumer products by domestic enterprises, the added value of ginseng products exported to foreign countries continues to increase, which is expected to increase the number and amount of ginseng exports in China.

Table 2 Quantity and Change of Chinese Ginseng Export in 2017-2024 (Unit: ton,%)

(3) Development Status of Ginseng Industry in Jilin Province

As the largest province of ginseng production in China, ginseng industry is the most advantageous and potential industry in Jilin Province. There are three main ways to plant ginseng in Jilin Province: forest cutting, under-story planting, and non forest planting. Ginseng in Jilin Province is mainly distributed in four regions: Yanbian, Tonghua, Baishan, and Jilin, namely Dunhua City, Hunchun City, Helong City, Antu County, Wangqing County, Fusong County, Jingyu County, Changbai County, Linjiang City, Tonghua County, Liuhe County, Meihekou City, Ji’an City, Jiaohe City, Huadian City, Panshi City, Huinan County, and more than ten major producing counties. To ensure the quality of ginseng, Jilin Province has successively formulated 15 national standards and nearly 50 local standards in the field of ginseng. At the same time, provide standard and green planting plans for farmers. Like planting grains, ginseng cultivation in Jilin Province has also comprehensively carried out soil testing and product testing and certification. The average yield of ginseng per square meter in the province has increased from 16 kilograms to 20 kilograms, with a high quality rate of over 75%.

In 2023, the ginseng industry in Jilin Province has achieved standardized production, refined processing, and branded sales, forming a cluster development trend of deep integration of primary, secondary, and tertiary industries. The production scale and product quality have steadily improved. According to the Ginseng and Mushroom Office of the Provincial Department of Agriculture and Rural Affairs, in 2023, the planting area of ginseng in Jilin Province was 145,000 mu, with a fresh ginseng yield of 34,000 tons. The planting area of ginseng under the forest was 1.165 million mu, with a fresh ginseng yield of 34,000 tons. The comprehensive output value of the ginseng industry in the province was 70.85 billion RMB yuan, a year-on-year increase of 10.3%, and exceeded 70 billion RMB yuan for the first time.

In recent years, Jilin Province has anchored the goal of building a strong agricultural province, turning the ginseng industry into a billion dollar scale industry, and constructing a new pattern of multi-point support, multi industry development, and diversified development. In places such as Fusong, Ji’an, Jingyu, Tonghua, and Yanji, an industrial belt dominated by ginseng has been formed, and many ginseng production enterprises and ginseng pharmaceutical enterprises have emerged. At present, Jilin Province has developed and produced more than 1,000 products in five major series including ginseng food, medicine, health products, cosmetics, and biological products, realizing the full plant development and utilization of ginseng.

2. Development status and prospects of ginseng health products and cosmetics industry

(1) Ginseng Health Products Industry

Modern research has proved that ginseng contains saponins, polysaccharides, proteins, amino acids and other components, which have the activities of regulating body immunity, anti myocardial ischemia, antioxidant, anti dementia and anti-aging. With the increase of ginseng health product production enterprises, the output and production capacity of the entire industry continue to increase, and domestic companies involved in the ginseng health product industry are generally not large in scale. At present, there are more than 160 ginseng health products that have obtained approval numbers from the State Food and Drug Administration, involving various varieties such as ginseng beverages, ginseng cola, ginseng oral liquid, ginseng wine, ginseng tea, etc.  Due to the fact that ginseng health products can be taken directly or used to make wine or soup, they are more popular among consumers.

Health food, as an effective means of preventing diseases and promoting health, has gradually gained widespread recognition. Coupled with the fact that the raw materials are traditional and precious tonics, the dual advantages drive the steady expansion of the industry scale. From 2019 to 2023, the market scale of ginseng health food industry in China increased from 10.415 billion RMB yuan to 12.139 billion RMB yuan, with a compound annual growth rate of 3.90%. It is estimated that the market size of ginseng health food industry in China is to increase from 12.57 billion RMB yuan to 15.104 billion RMB yuan in 2024-2028, with a compound annual growth rate of 4.70%.

(2) Ginseng cosmetics industry

Ginseng is rich in various antioxidants and nutrients, such as saponins, trace elements, and amino acids, which are believed to have anti-aging, brightening skin tone, and enhancing skin elasticity effects. In 2022, the global market size of ginseng cosmetics has reached approximately 4.5 billion US dollars. The Asian market, especially China and R.O.K., is the main consumer area for ginseng cosmetics, contributing over 60% of the market share. R.O.K. has a leading position in this field due to its long history of ginseng cultivation and advanced cosmetics research and development technology.  With the pursuit of natural and healthy lifestyles by Chinese consumers, as well as their recognition of traditional Chinese medicine culture, it will drive the growth of the ginseng cosmetics market, and the trend of "natural" and “additive free” cosmetics has brought development opportunities for ginseng cosmetics. It is expected that by 2025, the global ginseng cosmetics market will reach a size of 23 billion US dollars, demonstrating strong growth momentum. The growth of online sales channels and consumers' demand for personalized and diverse products are expected to bring new growth points to the industry.

1.1.3 Technical Analysis

The deep processing technology of ginseng refers to the technology of processing ginseng into high value-added products, such as ginsenosides, ginseng capsules, ginseng wine, etc.

① Preparation of Ginsenosides

Ginsenoside is one of the main active ingredients in ginseng, which has various pharmacological effects such as anti fatigue, anti-aging, and immune enhancement.  The methods for preparing ginsenosides include solvent extraction, enzymatic hydrolysis, ultrasound assisted extraction, etc.  The prepared ginsenosides can be used in fields such as pharmaceuticals and health products.

② Preparation of Ginseng Capsules

Ginseng capsule is a health product mainly made from ginseng, which has various effects such as improving immunity and anti fatigue. The key to preparing ginseng capsules is to select appropriate ginseng extracts and capsule materials, and ensure the sealing and stability of the capsules. The prepared capsules can be used in fields such as food and medicine.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The Announcement of the State Administration for Market Regulation, the National Health Commission, and the State Administration of Traditional Chinese Medicine on Issuing the Catalogue of Three Health Food Raw Materials, including Ginseng, has formulated the Catalogue of Health Food Raw Materials Ginseng, the Catalogue of Health Food Raw Materials Western Ginseng, and the Catalogue of Health Food Raw Materials Lingzhi, further accelerating the research and development, production, and achievement transformation of ginseng health food. Expand the scope of ginseng application for new food raw materials and actively promote the healthy and sustainable development of the ginseng food industry.

The Notice of the General Office of the People’s Government of Jilin Province on Issuing the 14th Five Year Plan for the Development of Baishan Ginseng Industry by the Governor of Jilin Province proposes to rely on the construction of Changbai Mountain ginseng advantage characteristic industry clusters, fully leverage the leading and driving role of key leading enterprises, and vigorously develop ginseng food, pharmaceuticals, health products, cosmetics, biological products, and wild mountain participation products. We will focus on building a consortium of edible ginseng, medicinal ginseng, ginseng cosmetics, ginseng extracts, and specialty wild ginseng deep processing industries in the main ginseng producing areas, effectively promoting the coordinated development of the entire ginseng industry chain and all fields.

The “Development Plan for Under Forest Economy in Jilin Province (2021-2025)” proposes to focus on ginseng production areas such as Tonghua, Baishan, Yanbian, and Jilin, vigorously develop under forest ginseng planting, and create a standardized and high-quality core area for the Changbai Mountain under forest ginseng industry through the implementation of ecological planting and simulated wild cultivation, in order to enhance the brand quality of Jilin under forest ginseng.  Based on the forest resources in the eastern region, we will vigorously develop traditional Chinese medicinal herbs such as Ganoderma lucidum, Sanghuang, Schisandra chinensis, and Tianma, and expand the scale of our industrial base.

The Implementation Opinions of the People’s Government of Jilin Province on Accelerating the High quality Development of the Ginseng Industry in the Province propose to focus on supporting research on non-traditional medicinal parts, active substances or effective components, new structures, new targets or new mechanisms of action of ginseng, and accelerate the development of innovative ginseng drugs for intelligence, antiviral, anti myocardial ischemia, and coronary heart disease.  Accelerate the development of diversified and high-end ginseng whitening, moisturizing, skincare and other series of cosmetics and daily chemical products, actively cultivate high-quality and new brands of ginseng daily chemical products.  Applying biotechnology, bioengineering and other methods to accelerate the development of biological products such as ginseng enzymes, ginseng peptides, ginseng roots, and feed additives, further enhancing the comprehensive development and utilization level of ginseng.

At the 7th plenary session of the 15th Shulan Municipal Committee of the Communist Party of China, it was proposed to improve the mechanism for high-quality development of the ginseng industry and create a “ginseng city” as a city card.

(2) Resource advantage

The eastern township of Shulan City is located in the the Changbai Mountains, providing a good planting environment for the development of ginseng industry.  The city's ginseng cultivation is mainly based on understory ginseng cultivation, with planting varieties including Changbai Mountain wild ginseng, long necked ginseng, Changbai ginseng, and Damaya, with a total area of 1,556.1 hectares and a population of approximately 137 million plants.

(3) Industrial advantages

Shulan has unique natural conditions and a long history of "Gongshan" culture. It is the origin and important main production area of the ginseng industry in the Qing Dynasty. It has the only wild ginseng breeding and protection site in the country and the advantage of using wild ginseng seeds for breeding. It has obtained the first and only production and operation rare and endangered plant (wild ginseng) forest certification (CFCC) in the country. The establishment of the Shulan Native Wild Ginseng Industry Development Association is an important symbol of the large-scale, standardized, and regulated development of Shulan ginseng cultivation. Shulan City seizes the policy opportunity of accelerating the high-quality development of the ginseng industry in the province, deeply explores Shulan's "mountain releasing" culture, vigorously develops the wild ginseng (under-story ginseng) industry, and creates "one highland, four centers", namely the national wild ginseng gene bank highland and the center for breeding, variety research and development, deep processing, and cultural dissemination.  To enhance the modernization level of the demonstration zone for the reproduction and protection of wild ginseng, relying on Jilin Shiyi Ginseng Industry, Junlin Traditional Chinese Medicine and other enterprises, vigorously carry out activities for the reproduction and protection of wild ginseng, and establish a sound system for the protection of wild ginseng.  Implement the expansion project of wild ginseng germplasm resources, improve the traceability system of wild ginseng quality, deepen the certification of endangered wild ginseng plants, and expand and strengthen the Shulan wild ginseng brand.

(4) Talent advantage

There are a total of 9 universities stationed in Jilin City. There are nearly 100,000 full-time students and about 30,000 graduates from higher education institutions every year. There are about 61,000 professional and technical talents and 496,000 skilled talents in the city, including 144,000 high skilled talents.

Shulan Vocational High School fully leverages its talent and resource advantages, regularly conducting in-depth labor skills training and agricultural technology guidance in towns, villages, and fields. It can train 1132 laid-off and unemployed individuals, returning migrant workers, and surplus rural laborers annually.

(5) Location advantage

Shulan City is located within the 2-hour economic circle of Jilin City, Changchun, and Harbin, with convenient transportation and a well connected network of public and railway transportation. There are 8 national, provincial, and municipal trunk highways, and three railways, namely Labin, Longshu, and Shuyu, run through the territory.

1.2 Contents and scale of project construction

The project covers an area of 20,000㎡ with a building area of 18,000㎡. Production line equipment are planned be purchased, and supporting facilities such as production workshops, warehouses, inspection rooms, offices, product display buildings and research bases (doctoral work guidance stations) are planned be constructed.

1.3 Total Investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of this project is 300 million yuan, including 240 million yuan for construction investment and 60 million yuan for working capital.

1.3.2 Capital raising

Self-raising of the enterprises.

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project is completed, the annual sales revenue is 270 million yuan, the profit is 40 million yuan, the investment payback period is 9.5 years (after tax, including a construction period of 2 years), and the investment profit margin is 13.33%.

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

1.4.2 Social evaluation

The construction of the project will further improve the deep processing level and product added value of ginseng in Shulan City, promote the integrated development of the three industries in the ginseng industry, and form a complete ginseng industry chain of "one industry after another". At the same time, relying on research institutions and enterprises as the main body, a complete ginseng technology innovation system will be established to transform technological potential into industrial potential.

1.5 Cooperative way

Joint venture, cooperation, sole proprietorship, other methods are negotiable.

1.6 What to be invested by the foreign party

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

1.7 Construction location of the project

Shulan City, Jilin City.

1.8 Progress of the project

We are currently seeking external investment.

2. Introduction to the partner

2.1 Basic Information

Name: Shulan Economic and Technological Cooperation Center

Address: 2006 Binhe Street, Shulan City

2.2 Overview

Shulan City is a county-level city under the jurisdiction of Jilin Province, located in the transitional zone from the Changbai Mountains to the Songnen Plain. It is situated between 43 ° 51 ′ and 44 ° 38 ′ north latitude and 126 ° 24 ′ and 127 ° 45 ′ east longitude. The city covers an area of 4560 square kilometers and has a total population of 587000. It has jurisdiction over 10 towns, 5 townships, 5 streets, and 1 provincial-level development zone. Shulan City is located at the intersection of two provinces and three cities, in the central area of the Northeast Asian economic circle, in the hinterland of the "China Changjitu Development and Opening Pilot Zone". It borders Jilin City to the south, Harbin City to the north, and faces Changchun City across the Songhua River to the west. It is within the one hour economic circle of Jilin, Changchun, and Harbin.

The approved area of Jilin Shulan Economic Development Zone is 16 square kilometers, with Jishu Industrial Park as the core area and radiating to the north of Shulan City Park.  During the 14th Five Year Plan period, the economic development zone is positioned as a national level "agricultural product processing demonstration base" and a "characteristic industrial park for agricultural machinery and equipment manufacturing" in Jilin Province, focusing on creating a "one zone, multiple parks" industrial development pattern. We will focus on developing industrial clusters led by deep processing of agricultural and sideline products, food precision processing, pharmaceutical and health industries, equipment manufacturing, agricultural circular economy, and light industry. Shulan City has been awarded honors such as National Advanced County (City) for Grain Production, National Demonstration County for Agricultural Standardization, National Important Commodity Grain Base, and Green and High quality Agricultural Product Production Base. It has been honored as the "Hometown of Ecological Rice in China" and has been designated as a pilot county for national agricultural non-point source pollution control and supervision guidance, the first batch of agricultural sustainable development experimental demonstration zones and agricultural green development pilot counties, the first batch of animal husbandry green development demonstration counties, and the first batch of carbon sink trading pilot counties in the province. It has been rated as a safe county in the province for three consecutive years and has been awarded the title of provincial-level civilized city.

2.3 Contact Information

Postal Code: 132600

Contact: Miao Yuhang

Tel: +86-432-68200065    

+86-15143985789

E-mail: slsjhzx@163.com   

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

Contact unit: Investment Promotion Service Center of Jilin Cooperation and Exchange Office

Contact Person: Wang Yanchao

Tel: +86-15843218881