1. Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Black ginseng is made using Changbai Mountain ginseng as raw material by combined process. Black ginseng fundamentally changes the composition of ginseng, produces a large amount of precious secondary saponins such as Rg3, Rh2, Rk1, which are of lower content in the original ginseng, and it breaks down proteins into amino acids that are easily absorbed by the human body. Meanwhile, it greatly increases the content of polysaccharides and polyphenols. It is a new product on par with traditional varieties such as white ginseng and red ginseng.

The project utilizes Changbai Mountain’s ginseng resources to produce “black ginseng” with strong product extensibility, which can provide basic high-quality raw materials for multiple fields such as medicine, health products, food, and biotechnology, etc. It can also directly produce black ginseng solid beverages, substitute tea, beverages, capsules and other products to meet the demands of different groups.

1.1.2 Market prospect

1. Development status of the ginseng industry

(1) Development status of the global ginseng industry

Ginseng is known as the “King of All Herbs” and “Oriental Divine Herb” due to its magical medicinal and health benefits. It is both medicinal and edible, with high medicinal value. In addition to being widely used in formula drugs, it has also entered various fields such as health products, cosmetics, food, beverages, gifts, ginseng cigarettes, ginseng wine, ginseng sugar, and ginseng tea, etc. In recent years, global ginseng output has steadily increased. In 2021, the global ginseng output reached 84,677 tons, and in 2023, the global ginseng production reached 97,321 tons. Currently, global ginseng is mainly produced in seven countries including South Korea, North Korea, Russia, the United States, Canada, Japan, and China. Among them, China accounts for more than 80% of the global output. Data showed that, the global ginseng market size was about 46.6 billion yuan in 2023. It is expected to maintain a steady growth trend in the coming years. By 2029, its market size will have approached 89.6 billion yuan, with a compound annual growth rate of about 9.6%.

(2) Development status of ginseng industry in China

In recent years, the output 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 accounted for 56.78%, Heilongjiang accounted for 28.63%, Liaoning 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 yuan/kg in 2021, and about 120.6 yuan/kg in 2023.

From 2020 to 2023, the number of ginseng imports in China continued to grow due to the epidemic. The import volume reached about 90 tons in 2023, with a year-on-year growth of 21.8%. The import amount remained stable from 2022 to 2023, and was about US$ 32.29 million in 2023. From the source of imported products, in 2023, China’s ginseng imports mainly came from Canada, South Korea and the United States, of which Canada accounted for about 60%, South Korea accounted for about 26%, and the United States accounted for 15%. China is a large producer of ginseng. From the overall import situation of ginseng in China, the main imports in China are refined products with high import value, with small quantity but high added value; With the increase in domestic consumers’ income, there is increased requirement for quality of ginseng products, which will drive import of the industry. In general, the ginseng industry in China 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 Import Volume and Change Condition of Ginseng in China from 2017 to 2024 (unit: t, %)

From 2019 to 2021, the number of ginseng export in China continued to decline due to the epidemic, reaching a low point in 2021 in recent years. Since 2022, exports have continued to rebound, reaching about 2070 tons by 2023, with a year-on-year growth of 44%. The overall export amount of ginseng shows a W-shaped trend. It reached a recent low point in 2021, with an export amount of only US$ 240,000. The export amount continued to rise from 2022 to 2023, exceeding US$ 1.6 million in 2023, with a year-on-year growth of 46%, and returning to the level of 2017. From the perspective of export destinations, in 2023, the main export destination of ginseng in China was Japan, accounting for more than 40%, followed by Hong Kong and Taiwan, China, accounting for 23.8% and 16.9%, respectively, while the other regions accounted for less than 5%. In terms of average export price, from 2017 to 2023, the average export price of ginseng fluctuated within the range of US$ 0.5-0.8/kg. The average export price has slightly increased in 2022, reaching about US$ 0.85/kg in 2023, but it was relatively stable on the whole. In general, the number of ginseng exports in China decreased first and then increased, with a warming trend in 2023. From the perspective of export destination, about 40% of China’s ginseng was exported to Japan, and the average export price was 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 export volume and amount of ginseng in China.

Table 2 Export Volume and Change Condition of Ginseng in China from 2017 to 2024 (unit: t, %)

(3) Development status of the ginseng industry in Jilin Province

As the largest province of ginseng output in China, ginseng industry is the most advantageous and most potential industry in Jilin Province. There are three main ways to plant ginseng in Jilin Province: deforestration for planting of ginseng, planting ginseng under forest, and non-forest planting of ginseng. Ginseng in Jilin Province is mainly distributed in four regions: Yanbian, Tonghua, Baishan, and Jilin, including more than ten major producing counties such as 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, and Huinan County, etc. To guarantee the quality of ginseng, Jilin Province has successively formulated 15 national standards and nearly 50 local standards in the field of ginseng. Meanwhile, it also provides standard and green planting plans for ginseng farmers. Like planting grains, Jilin Province has also comprehensively carried out soil testing and product testing and certification for ginseng planting. The average output of garden ginseng per square meter throughout the province has increased from 16 kilograms to 20 kilograms, with a merit factor of over 75%.

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

In recent years, focusing on the goal of building a strong agricultural province, Jilin Province has turned the ginseng industry into a 100-billion-scale industry, and constructed a new pattern of multi-point support, multi-industry development, and diversified development. In places such as Fusong, Ji’an, Jingyu, Tonghua, and Yanji, etc., it has formed an industrial belt dominated by ginseng, with emergence of many ginseng manufacturers and ginseng medicine enterprises. At present, Jilin Province has developed and produced more than 1,000 varieties of products in five major series including ginseng food, drugs, health products, cosmetics, and biological products, realizing the whole-plant development and utilization of ginseng.

2. Development status and prospect of ginseng health product industry

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

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

As is well known, ginseng polyphenols have extremely strong antioxidant capacity, and the content of ginseng polyphenols in black ginseng can reach 1.56%, which is more than 10 times that of ordinary ginseng. Ginsenoside Rg3 is a recognized anti-cancer substance in the world medical field. The rare saponins in black ginseng are mainly Rg3, Rg5 and Rk1, the content of which is extremely high, accounting for over 80% of the total saponin content in black ginseng.

At present, the conversion rate of rare saponins in black ginseng technology in the United States and South Korea is only about 20%, while the conversion rate in China has reached 80%, which is a fundamental technological breakthrough. The strong technological process far exceeds well-known ginseng brands such as Jung Kwan Jang in South Korea, and greatly improves the health care effect and economic value of ginseng, with a great market development prospect.

1.1.3 Technical analysis

Black ginseng is produced from the process of converting its original ginsenosides such as Rb1, Rb2 and Rc into abundant rare ginsenosides such as Rg3, Rb2 and Rh1 by professionally controlling the steaming temperature, time, and frequency based on fresh ginseng. After undergoing “repeated steaming and drying in the sun”, the content of rare ginsenosides in ginseng gradually increases, while the color also changes from light to dark. The dryness gradually decreases, and finally the color appears black brown. By repeated steaming and drying in the sun, rare ginsenosides such as Rg3 and Rg5 can be maximally converted, resulting in a total content 3-4 times higher than that in traditional red ginseng and 4-5 times higher than that in white ginseng. Therefore, it has stronger anti-tumor, neuroprotective, anti-inflammatory and other effects than white ginseng and red ginseng.

1.1.4 Advantageous conditions of project construction

(1) Policy advantages

The Notice of the General Office of the Jilin Provincial People’s Government on Issuing the 14^th Five-year Plan for the Development of Changbaishan Ginseng Industry proposed to rely on the construction of Changbaishan ginseng advantage characteristic industry clusters, to give full play to the leading and driving role of key leading enterprises, and vigorously develop ginseng food, drugs, health products, cosmetics, biological products, and wild mountain ginseng products, etc. We should focus on building a consortium for refined and deep processing industry of edible ginseng, medicinal ginseng, ginseng cosmetics, ginseng extracts, and specialty wild ginseng in the main ginseng producing areas, and effectively promote the coordinated development of the entire ginseng industry chain and all fields.

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

(2) Resource advantages

Jiangyuan District is located in the western part of Baishan City and is known as the “Three-dimensional Resource Treasury” and “Changbai Forest Sea”. The unique natural geographical environment provides advantageous conditions for the breeding of ginseng. At present, the ginseng planting area in Jiangyuan District is 3,400 mu, including 2,500 mu of ginseng under forest and 900 mu of garden ginseng, producing more than 650 tons/year of fresh ginseng. For counties close to Jiangyuan, Fusong County is rated as the “Hometown of Ginseng in China” by the state, and Jingyu County is rated as the “Hometown of American Ginseng in China”, with rich high-quality ginseng resources.

(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.

Baishan City is fully committed to building the “12345” industrial system for ginseng traditional Chinese medicinal materials, which included cultivating 1 ginseng trading market with a transaction amount exceeding 10 billion yuan, and cultivating 1 traditional Chinese medicinal material trading market with a transaction amount exceeding 5 billion yuan and 1 leading enterprise with an output value exceeding 5 billion yuan each, as well as completing construction of 3 scientific research platforms with the ability to transform scientific research achievements, 4 standardized and guaranteed planting bases for ginseng traditional Chinese medicinal materials with an area of over 1,000 mu, and 5 integrated industrial parks of the three industries (primary, secondary and tertiary industries) with significant regional characteristics. Taking the China Ginseng Industry Demonstration Zone as an important platform, it accelerates the establishment of the Ginseng Industry Development Alliance, promotes the implementation of projects such as Sinopharm Ginseng Medicine Industrial Park, China Resources Sanjiu Industrial Base, and Shanxi Zhendong Pharmaceutical Ginseng and Ganoderma Lucidum Deep-processing, etc., and creates an industrial chain integrating ginseng processing, market logistics, scientific research and development, and quality testing, etc. By now, Baishan City has completed construction and put into use 17 provincial-level entrepreneurship incubation bases, covering an area of 130,000 square meters and incubating 558 enterprises.

(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

Jiangyuan District is located in the central area of six counties (cities, districts) in Baishan City. It is a must pass point for Liaoning, Hebei, Shandong, Beijing and other places to reach Changbai Mountain Tourist Scenic Area via National Highway 201. It is 270 kilometers away from Changchun Longjia Airport, 100 kilometers away from Changbaishan Airport, 90 kilometers away from Tonghua Airport, 50 kilometers away from Linjiang Port, 162 kilometers away from Ji’an Port, and 392 kilometers away from Dandong Port. It is a logistics hub, and its service scope is not only based on the economic development of Jiangyuan itself, but also covers surrounding counties and districts that must pass through Jiangyuan District in transportation, as well as major cities outside the region, with obvious location advantages.

Highways and railways crisscross the Jiangyuan District, with 5 national and provincial trunk highways including the Hegang-Dalian Expressway and Shenyang-Changbaishan Expressway running through the area, and two railway trunk lines, the Hunjiang-Baihe Railway and the Yayuan-Dalizi Railway, connecting the north and south. The Hegang-Dalian Expressway and Linjiang-Huinan Expressway have been completed and opened to traffic, and the urban area is 5 minutes and 15 minutes away from the two expressways, respectively by car. Jiangyuan has formed a 1-hour economic circle in Baishan City. With the successive completion of high-speed railway and airport, Jiangyuan District will form a 3-hour economic circle with Beijing, Dalian, Shenyang and other places, making it more convenient and smooth to make element sharing.

1.2 Contents and scale of project construction

1.2.1 Construction scale

After the completion of the project, it will produce black ginseng at 1,000 tons/year, and 20 million boxes/year of black ginseng gift boxes, black ginseng health tea, black ginseng oral liquid, black ginseng polysaccharide soft capsules, black ginseng granule granules and other health products.

1.2.2 Contents of project construction

The project has a construction area of 90,000 square meters, with the purchase of production line equipment and the construction of supporting facilities such as raw material warehouses, production workshops, finished product warehouses, air conditioning refrigeration warehouses, office buildings, canteens, research and development centers, employee dormitories, and exhibition centers, 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 300 million yuan, including the construction investment of 240 million yuan and current funds of 60 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 270 million yuan, its profit will be 40 million yuan, its investment payback period will be 9.5 years (after the tax, including the construction period of 2 years), and its investment profit rate will be 13.33%.

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

1.4.2 Social evaluation

The construction of the project can drive the development of ginseng planting industry in Baishan City, promote in-depth research and development of black ginseng, continuously improve the added value of ginseng products, and assist in the high-quality development of the ginseng industry. Besides, the waste residues generated by the project can provide high-quality feed for the breeding industry. Therefore, the project can promote the development of breeding and planting industry, enabling planting, breeding, and processing to enter a virtuous ecological cycle to improve the ecological environment, thus promoting the development of ecological agriculture.

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

Jiangyuan District, Baishan City.

1.8 Progress of the project

It is in the process of investment promotion.

2. Introduction to the Partner

2.1Basic information

Name: Commerce Bureau of Jiangyuan District, Baishan City

Address: Building 25, Fuqiang Phase 2, Jiangyuan District, Baishan City

2.2 Overview

Jiangyuan District is located in the southeast of Jilin Province. Located between east longitude 126 ° 23 ′ -127 ° 11 ′ and north latitude 41 ° 48 ′ -42 ° 13 ′, it borders Fusong County to the east, Liuhe County and Badaojiang District to the west, Linjiang City to the south, and Jingyu County to the north. The distance between its east and west is 69 kilometers, and the distance between its north and south is 44.4 kilometers, with a total area of 1,348 square kilometers.

Jiangyuan District has always adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the important instructions of General Secretary Xi Jinping’s inspection of Jilin, focused on the core strategic arrangements and overall leadership direction of the Municipal Party Committee, based on the new development stage, implemented the new development concept, integrated into the new development pattern, created new development advantages, adhered to the principles of ecological development, industrial strength, characteristic enrichment, and innovative development, deeply implemented the “one, one, five and one” development strategy, persisted in revitalizing stock, expanding increment, and striving for excellence, solidly carried out the “six stability” work, fully implemented the “six guarantees” task, continuously created a new situation of green transformation and high-quality development, and vigorously advanced towards the second centenary goal of building a great modern socialist country in all respects.

In 2024, the main expected goal for the economic and social development of the entire region is to achieve a regional GDP growth rate of over 7%; growth rate of the total output value of industrial enterprises above designated size by over 20%; growth rate of fixed assets investment of the whole society by over 8%; growth rate of the total retail sales of consumer goods by over 8%; and growth rate of per capita disposable income of urban and rural permanent residents by over 6% and 8%, respectively.

2.3 Contact method

Contact unit: Baishan Municipal Commerce Bureau

Contact person: Zhu Yuze

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