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50,000 Tons/Year Wood Plastic Composite Project of Liaoyuan City
2016/03/24     Source:


1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Wood plastic Composite is a new material type mainly made of wood dust, bamboo dust, rice hull, wheat straw, soybean hull, peanut hull, bagasse and other natural wood fibers from agricultural wastes, primarily applied in building materials, automobile industry, package and transportation of goods, storage, decoration materials and daily use, etc. The product combining the advantages of wood and plastic, not only appears like natural wood, but overcomes its disadvantages, corrosion preventive, damp proof, and moth proof, with highly-stable size, no cracking and warping while harder than pure plastic and having wood processability of being able to be cut, adhered, japanned and jointed by nail or bolt. Moreover, it has adjustable fire-resistance, cheap raw materials available.

1.1.2 Market Overview

With the increasingly exhaustion of global resources and strengthening of people’s awareness in environmental protection, it has been a common issue concerned by industry and science circles to recover low-cost wood and plastic wastes, which has promoted the research and development on wood plastic composites and gained substantial progress with the application of the composite in quickening development trend. Therefore, wood plastic composite was born. It is expected by experts that in the year to come, wood plastic composites in China will grow at a yearly increase of 30%-50%, bringing the society with great economic and environmental benefit.

Wood plastic composite is high value-added product. From the perspective of raw materials, it can make full use of various plastic and wood wastes and crop residue, in which case the development and wide application of this product contributes to relieving plastic waste pollution as well as to the pollution from agricultural waste burning. The production and use of wood plastic composite emit no harmful volatilization to the environment. The material itself is recyclable, being a new green product, and ecologically-clean composite.

Utilization of wood plastic composite has been warming in recent years by seeing that there are 170 enterprises engaged, with yearly output of RMB 1.2billion, making China the second producing country in the world.

By analysis on market demand, experts predicate that in China wood plastic composite industry scale will rise at a yearly rate of 30%-50%, reaching a market capacity of 10million tons per year with an output value over 50billion Yuan.

1.1.3 Technical Analysis

Wood plastic composite production technology is deemed as a viable innovation. Production process of this material is divided into one-step and two-steps method, produced by incongruous cone twine-screw extruder and incongruous parallel twine-screw extruder. Microcellular foaming technology is adopted to significantly save material naruki and reducing density by 20%-35%, overcoming the shortcoming of insufficient ductility and impact intensity of the material in a lowering cost. The adopted technology in this project is the patent owned by Shenzhen Institutes of Advanced Technology, Chinese Academy of Sciences (short for SIAT), which is available through purchasing or technology investment.

1.1.4 Advantageous Conditions of Project Construction

(1) Location advantage  

The project is located in Longshan Industrial Development Zone where there are well equipped with public facilities, “7 accesses and site leveling” infrastructures, and good outer supporting facility to provide sound basis for project construction, convenient, complete resources required for production.

(2) Technical advantage

Cone twin-screw extruder used for wood plastic production features such that screw is adapted to wide processing range, less cutting to wood fiber, and uniform distribution and well fusion of materials even if there are a little resins. Adoption of screw of compressed and quick fusion and short metering section can ensure short stay of wood fiber to prevent its crack and degradation. Inner pressure generated from foaming can achieve a wood plastic composite closely similar to real wood.

(3) Talent advantage

The project is the patented product developed by SIAT that is a first-rating national research institute, covering a reasonably-structured research team with remarkable creativity. Commercialization of research findings, transformation mechanism and research achievements gained in SIAT have won general acknowledgement from top-ranking research organizations in the same international area while its commercialized achievements have been widely accepted and used by enterprises, and its professional personnel recognized by the society.

(4) Resource advantage

As of 2007, the area of man-made forest in Liaoyuan City is 113,577 hectares, and the accumulated volume of man-made forest is 8,586,409 m3, respectively accounting for 70.02% of the total forest area of Liaoyuan City and 74.01% of the total accumulated forest volume. The area of natural forest is 48,637 hectares, and the accumulated volume of natural forest is 3,014,612 m3, respectively accounting for  29.98% of the total forest area in Liaoyuan City and 25.99% of the total accumulated forest volume.

1.2 Content and Scale of Project Construction

1.2.1 Product Scale

The project plans to produce 50,000tons of wood plastic composites, including panel and profile.

1.2.2 Construction Content

The projects covers an area of 20000㎡,aimed at building production line for 50,000tons of wood plastic composites with newly-built plants covering 10000, office building 2000 and warehouse 3000, and a purchase of such 40 relevant equipment as two-steps single-screw extrusion production line, two-steps cone twin-screw extrusion production line, wood powder mill, wood plastic blender mixer, wood plastic embosser, etc.

1.3 Total Investment of the Project and Capital Raising

The total investment of the project is RMB 100 million Yuan, including construction investment of 80 million Yuan

Table 1: Summary Table of Total Investment of the Project     Unit: RMB10,000


Expense Name

Amount of Investment

Proportion of Total Investment %



Construction investment





Interest incurred in construction period





Working capital





Total investment of the project (1+2+3)




1.4 Financial Analysis and Social Evaluation

1.4.1 Main Financial Indexes

After the project reaches its output, the annual operation revenue is 150 million Yuan, and profit is 45 million Yuan. The payback period is 3.3 years (after taxes, including construction period of 1 year), and return on investment is 40%.

Table 2: List of Major Indexes for Forecast of Economic Benefits 







Sales income



Normal year


Total profit



Normal year


FIRR of all investments



After income tax


FNPV (Ic=10%)



After income tax

(operation period 10 years)


Period for recovery of all investments (after tax)



Including 1 year of construction period


Rate of return on investment




Note: "RMB10,000" in the Table shall be RMB.

1.4.2 Social Evaluation

After completion, the project is conducive to forming integral industrial chain, enhancing industrial upgrading, and driving the development of downstream industries while activating local employment, facilitating local society progress and boosting well the pillar industry in Liaoyuan City.

1.5 Cooperative Ways

Joint venture.

1.6 What to be Invested by Foreign Party


1.7 Construction Site of the Project

Longshan Industrial Development Zone.

1.8 The On-going Condition of Project

The cooperation proposal has been prepared.

2. Introduction to Partner

2.1 Basic Conditions

Name: Liaoyuan Longshan Industrial Development Zone

Address: Shoushan Town, Longshan District, Niaoyuan City

Legal Representative: Lin Tao

2.2 Overview

Liaoyuan Longshan Industrial Development Zone was established in 2005 with planned total area of 12.5 square kilometers, in which starting area is planned to be 2 square kilometers. The starting area is with axis of such two primary roads as Xinyuan Street and Fushou Road, and with its industrial function mainly positioned as developing high-end manufacture, environmental-protection and energy saving, electronic and information, biotechnology and business incubators. Infrastructures in the developing zone were preliminarily planned as “one horizontal and three vertical” road and bridge pattern with a total investment of 287.66 millionYuan. Road, bridge, street lighting, river control and telecommunication cable, etc have been basically finished, so have the water, electricity, heat and gas supplies, drainage and primary and secondary roads in the zone, able to provide production elements for settled enterprises.

2.3 Contact Method

Contact Person: Xu Yafang

Tel: 0437-3166166

Fax: 0437-3166166

E-mail: lylsjhj@163.com


Contact Person of Project City (Prefecture):

Contact Unit: Economic and Technical Cooperation Bureau of Liaoyuan City

Contact Person: Cui Shiwei

Tel: 0437-3528822  13766066922

Fax: 0431-3528822

E-mail: lysjhj@163.com

Website of City (Prefecture): http://www.lysjhj.cn/


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