Ⅱ、Project Background
    1、Development survey of products in the market
    With the increasing level of peoples’life and civilization, toilet paper is necessary in daily life and more and more accepted by people. Average using quantity has been close to 2kg in our country since several years ago and close to 4kg in developed cities. The future of the toilet paper market is quite good with the increasing velocity progressively of over 15% annually.
    2、Main raw material supply and environment effect
    The majority of factories producing low and middle grade paper use the rice and wheat grass or waste paper as the material. Rice and wheat grass are the important material of paper product in China. The fraternities of paper product in China are always sticking to seeking hard for how to resolve the problems caused by pollution of the grass pupple, especially the rice grass pupple. We are not optimistic about the technology that can be used to resolve the pollution caused by the rice grass pupple according to the practice of our company and the internal, external development of this technology. The growth altitude of paddy rice is shorter and shorter with the development of agriculture technology and mechanization. The straw length is shorter and shorter cut by the combine harvester. So it will influence directly the rate of producing pupple through the straw. The paper product factories using grass pupple as the material in our neighbour province have felt the strong crisis in the material supply. “Fight for material”is so strong that some factories can not purchase the sufficient material even with RMB600 per ton. This makes the factories using the rice pupple as the material modulate their material structure.

    3、Adapt with the demand of country situation and industry development
    China has joined in WTO; traditional agriculture has been facing severe challenge. The agriculture industrialization structure in China is being adjusted, resolving the outlet of farm products has become pressing assignment of government. From adjustment situation of recent agriculture industrialization structure in north of Jiangsu, we have seen that the government is advocating and supporting to accelerate the speed of developing Yang tree growth area. The real purpose during these years proves sufficiently that the government has been intent.
    However, the large development of Yang tree growth in north of Jiangsu offers wide development space for “Forest-paper Integration” development mode advocated by paper-making industries these years. Yang tree growth industrialization mode not only favors for adjustment of agriculture industrialization structure, but favors for development of paper-making industries, no matter from economy benefit of Yang tree synthesized utilization, or from persistent development of maintaining zoology environment and returning forest from furrowing. Thus, adjustment and development of agriculture industrialization structure, and raw material structure adjustment and development of paper-making industries are mutual, dependant and closed. Only in Huaian city, current cumulating number of Yang tree is 5,000,000 Stere, fall per annual is 700,000 Stere. At present, speed and area of Yang tree growth in north of Jiangsu has established stable base for our company on regarding Yang tree as raw material, developing big-sized or oversized paper-making enterprises in this area.

Ⅲ、Product plan and construction scale
  1、Build 30,000 tons per annual of waste paper deinking pulp tissue paper system.
  2、Build 30,000 tons per annual of Yang tree BCTMP pulp paper system.
  3、Start-up 30,000 Mu paper-making forest engineering (100,000 Mu as plan).
  4、Environment protection administering matched equipment (new technology industrial experiment project cooperated with Finland).