1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Schisandra chinensis is the dried mature fruit of the fruit of Chinese magnoliavine, a plant in the Magnoliaceae family. It has the effects of astringency, supplementing qi and promoting the production of body fluid, as well as tonifying the kidney and calming the heart. The quality of Schisandra chinensis medicinal materials in Changbai County is pure and genuine, with strong medicinal effects, good sensory perception, and high nutritional content. The fruit contains volatile oil, citric acid, malic acid, schisandrin alcohol, citral, and other components.

This project utilizes the advantages of traditional Chinese medicinal material resources of Schisandra chinensis in Changbai County to deeply process Schisandra chinensis through integrated agricultural processing. It aims to develop a series of products including Schisandra chinensis concentrate juice, Schisandra chinensis beverage, Schisandra chinensis wine, Schisandra chinensis lignans, Schisandra chinensis buccal tablets, and Schisandra chinensis potted plants, etc., create the Changbaishan Schisandra chinensis brand.

1.1.2 Market prospect

1. Development status of Schisandra chinensis industry in China

The utilization of Schisandra chinensis in traditional Chinese medicine (TCM) in China started relatively early, and with the expansion of the market size and the increase in product varieties in TCM and health product industries, the market demand for Schisandra chinensis continues to grow. From the perspective of market demand, health products and TCM are the two main areas of demand, followed by individual consumers and TCM hospitals. In recent years, with the rapid development of modernization of traditional Chinese medicine in China, research on Schisandra chinensis has become deeper, and the understanding of its active ingredients has become more accurate, having greatly promoted the application of Schisandra chinensis in the field of TCM, and its overall market demand has steadily increased. In 2022, the output of Schisandra chinensis in China was 3.96 tons, with a year-on-year growth of 3.125%, and its demand was 3.61 tons. In 2023, the total output of Schisandra chinensis in China was about 150,000 tons. With the continuous development of the big health industry in China and the gradual improvement of the industry circulation system, its market price fluctuations are relatively stable. In 2022, the wholesale price of Schisandra chinensis in China’s market was close to 109.7 yuan per kilogram.

Schisandra chinensis is a perennial deciduous woody vine plant, and is a multi-functional and multi-purpose medicinal and edible economic plant. Its fruit has a sour taste and a warm nature. It has the effects of tonifying qi, nourishing kidney, astringing the lung, promoting production of body fluid, promoting intelligence and calming the mind, and calming the mind. It is a commonly used and precious traditional Chinese medicinal material. Meanwhile, it is widely used in fields such as food, beverages, wine brewing, fruit juice, health care, and textile dyes, etc. The continuous growth of demand drives the market size to continue to rise. In 2022, the market size reached 3.57 billion yuan, with a year-on-year growth of 5.62%, of which the demand scale of traditional Chinese patent medicines accounted for 47.3%, and the demand scale of health food accounted for 34.4%. The market size of Schisandra chinensis in China was about 3.42 billion yuan in 2023.

2. Competition pattern

The competition in the Schisandra chinensis industry is extremely fierce, with a large number of enterprises producing the same type of product, providing the consumers with a wide range of choices. Firstly, there is a wide range of participants competing in various fields of the Schisandra chinensis industry. Secondly, with the continuous carryout and completion of ongoing and planned projects in earlier stage, the product updates fast and new products continue to emerge. Furthermore, with the widespread increase in raw material prices of Schisandra chinensis, the industry profits have decreased and competition among enterprises has become increasingly fierce. At present, the key enterprises in China’s Schisandra chinensis industry include Jilin Beijia Traditional Chinese Medicine Technology Development Co., Ltd., Liaoning Liaodong Schisandra Chinensis Industrial Development Co., Ltd., Liaoning Yimin Medicinal Materials Development Co., Ltd., and Yangling Jinshan Agricultural Technology Co., Ltd.

Table 1 Introduction to Some Key Enterprises in China’s Schisandra Industry

3. Development trend

With people’s increasing emphasis on health and understanding of health knowledge, using Schisandra chinensis for health preservation is highly favored by the consumers. TCM is one of the important cultural heritages in China, which has formed a unique medicine theory system thousands of years ago and made important contributions to the historical development of our country. In recent years, TCM has developed rapidly, and achieved fruitful results especially in the standardization of TCM, the construction of TCM bases, the modernization of TCM, and the exchange of TCM with foreign countries, etc.

In addition, the toxic side effects of chemical drugs, the increasing incidence of iatrogenic and drug-induced diseases, the rising development costs of chemical and biochemical drugs, and the increasing medical expenses have been troubling the people all the time. As a result, people’s eyes have started to turn to natural traditional Chinese patent medicines. TCM is highly popular among the consumers due to its stable and safe therapeutic effects, no toxicity, no side effects, and significant therapeutic effects on some difficult and chronic diseases. In the future, the market sales volume of Schisandra chinensis related traditional Chinese patent medicines in China will steadily increase, and its market share in the entire traditional Chinese medicine industry will also increasingly expand. In the future, the Schisandra chinensis industry in China will begin to extend to the modernization, consumer goods market and beauty and health care products market, presenting a good development pattern.

1.1.3 Technical analysis

1. Schisandra chinensis concentrated juice

The raw material, Schisandra chinensis, is cleaned to remove the non-conforming fruits that are rotten, diseased, and severely mechanically damaged, etc. After crushing, pressing, and filtering, fresh Schisandra chinensis juice is obtained. After vacuum concentration, the concentrated juice is obtained and then stored at low temperature for future use.

2. Schisandra chinensis beverage

The Schisandra chinensis concentrated juice is processed through blending, homogenization, vacuum degassing, pasteurization, and aseptic filling to obtain the finished product.

3. Schisandra chinensis wine

The fresh fruit of Schisandra chinensis is firstly crushed, then fermented with syrup, clarified, and filtered to produce the original Schisandra chinensis wine. The original Schisandra chinensis wine is further processed to reduce acidity, aged, blended, sterilized and filled to produce finished wine. To guarantee the product quality, this product will adopt aseptic packaging technology, which can maximize the preservation of the original flavor, quality, and nutrition of the product, prevent bacterial contamination, and enable a shelf life of 12-18 months of the product without adding any preservatives or refrigeration.

4. Schisandra chinensis lignans

After pretreatment, extraction, and separation, Schisandra chinensis is extracted to obtain Schisandra chinensis lignan extract. The extract is a black brown liquid with oily property and a lignin content of 60%.

This product adopts advanced supercritical CO₂ extraction technology to extract and separate effective ingredients such as lignans from Schisandra chinensis. The optimal extraction conditions are extraction pressure of 21 MPa, extraction temperature of 37℃, and CO₂ flow rate of 5 L/min.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The Outline of the Strategic Plan for the Development of Traditional Chinese Medicine (2016-2030) proposed to implement the Wild Chinese Medicinal Material Resource Protection Project, further improving the reserves of traditional Chinese medicinal materials and TCM decoction pieces, promote standardized planting and cultivation of traditional Chinese medicinal materials, and improve the level of scale and standardization; Build a modern circulation system for traditional Chinese medicinal materials, implement a quality assurance project for traditional Chinese medicinal materials, and establish a quality management and quality traceability system for the entire production and circulation process of traditional Chinese medicinal materials.

The Outline of the 14^th Five-Year Plan for National Economic and Social Development and Vision 2035 of Changbai Korean Autonomous County proposed to focus on genuine traditional Chinese medicinal materials such as Schisandra chinensis, Eleutherococcus senticosus, Codonopsis pilosula, and Gastrodia elata, etc., to lay emphasis on development of TCM decoction pieces, TCM extracts, traditional Chinese patent medicines, TCM health care and biopharmaceuticals, etc. We should accelerate the development and achievement transformation of new drugs, and encourage the enterprises to develop innovative drugs with independent intellectual property rights. We should strengthen the construction of quality management system standards in the TCM production process, and build it into a green and organic base for the production, processing, and research and development of traditional Chinese medicinal materials that meets GAP standards.

(2) Resource advantages

Electricity resources: The controlled boundary river area in Changbai County is 2,497.6 square kilometers, the inland river area is 5,761 square kilometers, the total resource amount is 1.148 billion cubic meters, and the actual utilized water volume is 270 million cubic meters. The theoretical reserve of hydropower resources is 230,000 kilowatts, with a planned installed capacity of 162,300 kilowatts. Among them, the main stream of Yalu River, the boundary river, has a capacity of 127,000 kilowatts, and it is suitable for the development and construction of 7 power stations by the Chinese side, with a planned installed capacity of 58,300 kilowatts; The theoretical reserve of inland rivers is 102,800 kilowatts, with 51 planned power stations and an installed capacity of 84,486 kilowatts. There have been 28 power stations completed, with an installed capacity of 54,700 kilowatts (accounting for 64.74% of the planned installed capacity of inland rivers).

Characteristic industrial resources: Changbai County has a total of 943 species of medicinal plants in 136 families, including 112 species in 55 families that are included in capacity calculation, with a total reserve of 11,500 tons. The main wild genuine traditional Chinese medicinal materials include ginseng, Astragalus membranaceus, Schisandra chinensis, Acanthopanax senticosus, Codonopsis pilosula, and Asarum, etc., with a reserve of up to 1,597 tons. The preserved area of ginseng in the whole county is 3.92 million square meters, including 3.42 million square meters of ginseng and 500,000 square meters of American ginseng; The production area of ginseng as goods is 1.25 million square meters, and the total output of fresh ginseng is 3.66 million kilograms, including 3.3 million kilograms of ginseng and 360,000 kilograms of American ginseng. The artificial planting area of Schisandra chinensis has reached 11,231 mu in accumulation. The planting area of other small and medium-sized medicinal materials, mainly including Dioscorea nipponica, Adenophora stricta, and Asarum, etc., has reached 2,873 mu. There are about 20 varieties of products that comply with organic and green food standards within the county.

Land resources: Changbai County has a total area of 249,760 hectares, with a population density of 30 people per square kilometer, and an average per capita area of 1.22 hectares (excluding water area). The county has a total arable land area of 14,926.66 hectares, forest area of 220,880 hectares, grassland area of 6,840 hectares, garden area of 1,006.66 hectares, and water area of 2,580 hectares. The other land area is 2,973.33 hectares, and the Changbai Mountain Nature Reserve covers an area of 16,386.66 hectares within the county.

(3) Industrial advantages

In recent years, Baishan City has successfully introduced 15 well-known domestic and foreign enterprises such as Tsumura from Japan, Tongrentang from Beijing, and China Resources Group, etc. It has focused on cultivating leading enterprises such as Zhongmin Kangda, TGpeptide, Nature, China Resources Heshan Tang, and Huangfengshen Industry, etc. It has also developed a batch of deep processed products with core competitiveness, including ginsenosides, ginseng polypeptides, ginseng polysaccharides, ginseng tea treasures, black ginseng, ginseng pure powder tablets, wild ginseng buccal tablets, and Tongrentang ginseng, etc. The ginseng industrial chain has been further extended, forming more than 300 varieties of five major series (ginseng food, drug, health products, cosmetics, and biological products), including more than 200 varieties of ginseng food and more than 60 varieties of cosmetics, and 78 varieties having been approved as medicinal and edible products. It has achieved 5 scientific and research achievements at provincial-level and above, and has developed 58 varieties of new ginseng products. The products such as ginseng dropping pills, ginseng fruit saponin capsules, ginseng peptides, ginseng monomer saponin Rg3, ginseng face cream, and ginseng facial mask, etc. have been greatly favored by the market. In 2023, the total output value of the ginseng processing industry throughout the city was 7.03 billion yuan, accounting for 28.7% of the total output value of the processing industry throughout the province.

(4) Talent advantages

There are 63,800 professional and technical talents in Baishan City; There are 13,000 highly skilled talents, including 39 young and middle-aged experts who have made outstanding contributions; and 13 top-notch innovative talents, having formed a talent team that has initially taken shape, with a relatively complete range of categories and gradually strengthened overall strength. There is Changbaishan Vocational Technical College in the urban area, which is a public ordinary university with higher education enrollment qualifications approved by the Jilin Provincial Government and registered with the national education system. The College is a multi-level and multi-class teaching-oriented higher vocational college that mainly focuses on higher education, takes into account secondary vocational education, and also carries out social training and vocational skills certification education. The College has 18 higher vocational majors for national enrollment and 12 secondary vocational majors for provincial enrollment. The College's training center offers skill training and vocational qualification education for over 30 projects in six major categories, with an annual training capacity of 5,000 person times.

(5) Location advantages

Changbai County is the frontier window of Jilin Province’s opening up to the outside world, and also an important node of China’s “The Belt and Road” Northeast Asia Economic Circle. It has 1 national-level border port and 3 temporary cargo passages, with complete port infrastructure. It has been successively awarded the titles of National Culture Advanced County and National Civilized County, and has been named the “National Double-support Model County” for five consecutive times. It has also been honored with the title of National Ethnic Unity and Progress Model Collective for six times.

1.2 Contents and scale of project construction

The project will construct a 5,000 mu new technology testing and standardization demonstration base, build 12,000 square meters of new production and processing plants, and purchase fruit harvesting tools, inspection equipment, pest control equipment, drying, modern processing equipment, and office equipment, etc.

1.3 Total investment of the project and capital raising

1.3.1Total investment of the project

The total investment of the project is 200 million yuan, including the construction investment of 160 million yuan and current funds of 40 million yuan.

1.3.2 Capital raising

Raised by the enterprise itself

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 170 million yuan, its profit will be 25 million yuan, its investment payback period will be 10 years (after the tax, including the construction period of 2 years), and its investment profit rate will be 12.50%.

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

1.4.2 Social evaluation

The construction of the project is conducive to enhancing the modernization level of the Schisandra chinensis industry in Changbai County, forming the core competitiveness of the Schisandra chinensis industry, promoting the adjustment of the agricultural industry structure and the optimization of the rural economic structure in Changbai County, improving the technological content of agriculture, promoting the rational allocation of existing agricultural resources, and increasing the farmers' income. Meanwhile, the implementation of the project will effectively promote the further development of Schisandra chinensis planting industry in Changbai County, thereby playing a significant role in protecting this valuable biological resource.

1.5 Cooperative way

Joint venture, cooperation, or sole proprietorship, other ways can be discussed in person.

1.6 What to be invested by the foreign party

Funds, other ways can be discussed in person.

1.7 Construction site of the project

Changbai County, BaishanCity.

1.8 Progress of the project

It is in the process of investment promotion

2. Introduction to the Partner

2.1Basic information

Name: Changbai Korean Autonomous County Commerce Bureau

Address: No. 64 Changbai Street, Changbai Korean Autonomous County

2.2 Overview

As a prefecture-level city under the jurisdiction of Jilin Province, Baishan City is located on the west side of Changbai Mountain, is adjacent to Yanbian Korean Autonomous Prefecture to the east, borders Tonghua City to the west, adjoins Jilin City to the north, and faces the Democratic People’s Republic of Korea across the Yalu River to the south. It is situated in the hinterland of Changbai Mountain, with the Longgang Mountains and Laoling Mountains diagonally running through the entire city. It belongs to the northern temperate continental monsoon climate, with a total area of 17,505 square kilometers. The city has 2 districts, 2 counties and 1 autonomous county under its jurisdiction, and 1 county-level city under its administration as an agent. As of the end of 2023, the population of the city has been 895,900.

Changbai County is located in the southeast of Jilin Province, at the southern foot of the main peak of Changbai Mountain and the source of the Yalu River. It is known as “The First County at the Foot of Changbai Mountain and The First City at the Source of the Yalu River”. Covering an area of 2,505.96 square kilometers, the county has jurisdiction over 77 administrative villages in 7 towns and 1 township, 1 provincial border economic cooperation zone, and 1 provincial diatomite characteristic industrial park. It is the frontier window of Jilin Province’s opening up to the outside world, and also an important node of China’s “The Belt and Road” Northeast Asia Economic Circle. It has 1 national-level border port and 3 temporary cargo passages, with complete port infrastructure. Over the years, it has been successively awarded the titles of National Culture Advanced County and National Civilized County, and has been named the “National Double-support Model County” for five consecutive times. It has also been honored with the title of National Ethnic Unity and Progress Model Collective for six times.

2.3 Contact method

Contact unit: Baishan Municipal Commerce Bureau

Contact person: Zhu Yuze

Tel: +86-439-3367020 +86-15844990231