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20,000 Tons/Year Copper Rod Drawing Processing Project of Baicheng City
2016/03/23     Source:

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

This project produces copper rod drawing by using copper raw material in Jubao copper mine, introducing a complete set of copper rod drawing process and adopting hot air circulation system, secondary catalytic combustion and other energy saving advanced technology.

The material of copper rob drawing is innovative in some extent and new environmental protection materials and new materials with special functions are widely used in the processing of copper wire drawing. The main material type selected in it is: electrolytic copper of 8 mm to 0.12mm in terms of the copper specification. The copper specification in copper rob drawing production project are also electrolytic copper of 8 mm to 0.12mm. The copper rob drawing has the same characteristics as porcelain with strong strength, high hardness, good thermal stability, water absorption <0.5% and sun absorption ratio 0.93. The sunlight absorption ratio of it does not change with the time passing and it has the same use lifetime as the building.

1.1.2 Market Overview

The copper rob is mainly used for producing electric wire and cable (electric wire, cables, plain conductor, enameled wire, etc.), winding wires, electrical equipment line and others. The copper rob wire is the largest species in copper material, accounting for about 38% of the total consumption of copper material. With the upgrading of the national grid, copper rod will usher in a new development opportunity. Low-carbon, energy saving and environental protection are the biggest features of copper rod drawing. Copper products are widely used in automobile manufacturing, machinery and equipment, building materials, communication devices and wire and cable industries. With the rapid development of China's economy, copper demand with all kinds of specifications is growing. Meantime, because the copper electronic wires and cables are lower in resistance and in power consumption compared with aluminum electronic wires and cables, the applicable scope of them is expended further.

Data show that in the past five years, China's average annual growth rate of copper rod wires is 11.5%. At the present, there are more than 1,500 enterprises producing copper rod wires with a total production capacity of 8 million t / a, of which the non-oxygen copper and low oxygen copper are 4 million separately. New copper rob projects in relevant industries produced low oxygen copper by taking advantage of scrap copper and introducing foreign advanced technology and equipment to ensure product quality and to improve market competitiveness and profitability of the project.

The "Twelfth Five Year Plan" of national smart gird has provided a guarantee for the development of copper rod market. The 1.6 trillion investment capital in the plan will greatly promote the consumption of electronic wire and cable, stimulating the consumption of copper rods drawing further. The intensive bid invitations in smart gird construction have great stimulation effects. During China's "Twelfth Five-Year", the average annual growth of demand for copper rod material will reach to 18 % along with the national smart grid upgrading (DC ± 800 KVA, DC 1,000 KVA), therefore, the future of copper rod industry worth the wait.

The above analysis shows that the background of taking advantage of current domestic industrials is good and our policies and market demand for developing copper rob drawing is promising with a large market potential. The investment in this industry has a strong feasibility in market and viability in economic earnings.

This project enjoys many advantages in labor, technology, manufacturing cost and construction period. For example, With a moderate investment scale, it will has a shorter construction period if integrating existing resources, so the project can adopts differentiation and low-cost market strategy. The domestic market is focused on local enterprises producing automotive wiring harness, units constructing gird and all parts of the country.

1.1.3 Technical Analysis

China's copper rod production technology is mature and there are two main copper rod production processes with mass production capacity. They are oxygen free copper rod process in up-drawing casting and low oxygen copper robs process in continuous casting and rolling. The technology adopted to produce copper rob drawing in this project is international advanced and the main technology is oxygen free copper rod process in up-drawing casting. The process flow is: a dielectric copper - melting furnace - holding furnace -- primary cooling - secondary cooling - winding lever machine - copper mill.

1.1.4 Advantageous Conditions of Project Construction

(1) Advantage of policy conditions

In recent years, in order to implement the strategic plan on promoting energy conservation and new energy development proposed by the Central Party and the State Council, the Ministry of Finance and the Ministry of Housing and Urban Construction vigorously promoted the application of shallow geothermal energy and other renewable energy in building construction, so the application scope of renewable energy is rapidly expanded and applied technology gradually matures and industrial competitiveness is improved steadily. According to "the 12th Five-Year National Strategic Emerging Industry Development Planning", the new generation of information technology, biotechnology, energy saving and high-end equipment manufacturing industry will become pillar industries and new energy, new materials and new energy automotive industry will be leading industries.

Since 2011, with the gradual emerging of the effect of government policy to stimulate domestic demand and the turnabout of international economic situation, downstream industries of copper rob drawing enter into a new round of economic cycle, leading to the expansion of market demand for copper rod drawing. The sales volume of copper rob drawing rebounds obviously and the relationship between supply and demand is improved and the industry profitability is improved steadily too. Meantime, under the national "the 12th Five-year Plan” and industrial structure adjustment, copper rod drawing is facing a huge market investment opportunity and the industry is expected to usher in a new opportunity for development.

 (2) Energy advantages

Baicheng where the project located is the energy base in Jilin Province. Baicheng Generation Company of China Power Investment Group has built power unit with 2×660,000 KW thermal power and it is running with an annual generating capacity of 5 billion kilowatt-hour; Wind power generation has been listed in the state wind power base with 10 million KW and 1.5 million KW have been installed and joined the national power grid to generate power, ranking the second in the country; the clean energy industry like photovoltaic and biomass have broad prospects, because they can provides sufficient power for developing industries, particularly the larger energy projects and save a lot of energy costs for enterprises.

(3) Advantages of raw material resource

Jubao Copper Mine is located in Jubao Township of Taonan City, 70 kilometers away from Taonan City where Taonan municipal government located to the east and 65 kilometers away from Ulanhot City to the north. It was mine 165 thousand tons of copper ore each year for the project planning. Jubao Copper Mine is located in tectonic metallogenic belt of Budunhua - Changchun ridge with 3 proved mineral vein groups in the mining area, running altered diorite porphyrite and fracture controlled copper miner distributed here. The ore minerals are mainly halcopyrite, pyrite, chalcocite and associated gold and silver, which feature the metasomatic dissolution textures, nervation and disseminated structure, so its grade is high.

(4) Advantages of location and transportation

Located in the junction of three provinces, Jilin Province, Heilongjiang Province and Inner Mongolia, Baicheng is the only place connecting the western Heilongjiang and eastern Inner Mongolia with Shanhai Guan, the Fourth Eurasia Bridge in the United Nations Development Plan, the “main axis” in the national Chang-Ji-Tu plan and an important node city of “China- Mongolia Passage”. Its railways and highways can reach to anyplace in all directions and the waterway can directly reach to Khabarovsk port of Russia from Da’an port by passing Harbin. The highway from Changchun to Baicheng has been opened. With the construction of Baicheng-Changan airport, Changchun-Baicheng high-speed railway and Nenjiang-Dandong highway, Baicheng will form a three-dimensional transportation network running through north to south and east to west and a regional channel hub. The mining area is interlinked with all places with highways and cement roads, so the traffic is convenient.

1.2 Content and Scale of Project Construction

1.2.1 Product Scheme and Scale

To produce 20,000 tons of copper rod drawing each year by taking advantage of copper powder in Jubao Copper Mine.

1.2.2 Construction Content

The project is planed to construct in Jubao Township with a planning area of 120,000 square meters to construct four standardized plans. The project will adopt hot air circulation system, secondary catalytic combustion and other energy saving advanced technology. The main equipment of the project include: a set of lead furnace equipment, a LED4001 intermediate pull-speed annealing machine, 12 B24 high speed drawing machine, 2 continuous annealing machine and so on.

1.3 Total Investment of the Project and Capital Raising

1.3.1 Total Investment of the Project (see table 1)

The total investment of this project is 250 million Yuan, including construction investment of 200 million Yuan, liquidity of 50 million Yuan and interest of zero Yuan during construction period( without consider debt funding)

Table 1: Summary Table of Total Investment of the Project  Unit: RMB 10,000

No.

Expense Name

Amount of Investment

Proportion of Total Investment %

Remarks

1

Construction investment

20000

80

 

2

Interest incurred in construction period

 

 

 

3

Working capital

5000

20

 

 

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

25000

100.00

 

Note: "RMB 10,000" in the Table shall be RMB.

1.3.2 Capital Raising

The total funds required in investment needs to be raised by the enterprise itself.    

1.4 Economic Benefit and Social Benefit Prediction

1.4.1 Main Economic Benefit Indicators Prediction (see table 2)

After the project has been established and achieved design capacity, it will obtain annual sales income of 450 million Yuan, profit of 90 million Yuan and taxes of 35 million Yuan.

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

No.

Name

Unit

Index

Remarks

1

Sales income

RMB10,000/a

45000

Normal year

2

Total profit

RMB10,000/a

9000

Normal year

3

FIRR of all investments

%

28.5

After income tax

4

FNPV (Ic=10%)

RMB10,000

10980

After income tax

5

Period for recovery of all investments (after tax)

a

4.5

Including 1 year of construction period

6

Return on investment

%

27

After normal annual tax

Note: "RMB 10,000" in the Table shall be RMB.

1.4.2 Main Social Benefit Prediction

It is a project in line with national industrial policies. With abundant raw materials, mature technology, broad domestic and international market prospects and standard environmental protection, this project has sound profitability and export capacity. Without occupying arable, this project is equipped with completed transportation and "Eight communications and one plat”. This project can provide employment opportunities for local people and absorb laid-off workers and idle people to be re-employed, so it has good social and economic benefits and has a long-term significance in promoting the sustainable development of economy and society.

1.5 Cooperative Ways of the Project

Sole proprietorship and operated independently by enterprises.

1.6 What to be Invested by Foreign Party

Capital.

1.7 Construction Site of the Project

Jubao Township, Taonan City, Jilin Province

1.8 The On-going Condition of Project

Construction sites have already been planed.

2. About cooperative party

2.1 Basic Conditions

Sponsor Name of the Project: Taonan Economic and Technical Cooperation Bureau

Unit address: Near Fuwendong Road, Taonan City

2.2 Project Sponsor Overview

Established in 2005 approved by the provincial government, Taonan Economic Development Zone is a provincial economic development zone. It is located in the east of urban area of Taonan City with a total planned area of 24 square kilometers with the axis of the transit road, Chang-Bai Road, 3 kilometers to the east along with the railway and 8 kilometers to the south along with the Taonan City river levees. According to the industry layout and functions position of concentration industry, clear functions, obvious characteristics and metro construction, the development zone is divided into four zones, industrial zones, trade and logistics zone, management service zone and living zone. The planed industrial zone covers an area of 14 square kilometers, which is focus on planning “one zone with four parks”, the agricultural and animal products industrial park, the food, drug and health-care product industrial park, the textile and apparel manufacturing industrial park and metallurgical manufacture and green energy industrial park. The trade and logistics zone is planed to cover 8 square kilometers, which focuses on building agricultural trade outlets and professional wholesale market. The management service zone and living zone are planed to cover 2 square kilometers, which focuses on building an electronic information service center, online trading platforms and comprehensive office buildings and developing various services by taking “High starting point, high standard and modernization ”as the standard.

According to the overall goal of "high standard positioning, high standard planning, high-level construction and high-speed development” and insisting on the principle of planning overall, implementing step by step, constructing metro, highlighting features, supporting by industries, developing rollingly and circling virtuously” the development zone striven to attract investment, create the best business founding platform, accelerate industrial projects construction steps to achieve rapid development for several years strongly driven by municipal party Committee and Government. In 2006, the municipal government invested more than 50 million Yuan to start the implementation of the first phase of the industrial zone and completed the construction of “Seven communications and one plat”, which covers 6.05 square kilometers, including roads, water supply, heat supply, gas supply, electricity supply, drainage, communications, greening, beautifying and flat industrial land. In 2007, the municipal government invested 20 million Yuan to start the implementation of the second phase of the industrial zone.

2.3 Contact Method

Postal Code: 137000

Contact Person of Project Unit: Gao Xuezhong

Tel: 0436-6352099     15844613195

Fax: 0436-6352099

E-mail: tnjhj2010@163.com

 

Contact Person of Project City (Prefecture):

Contact Unit: Economic and Technical Cooperation Bureau

Contact Person: Liu Lin

Tel: 0436-5081011   13943687990

Fax: 0436-5081011

E-mail: bclyj01@126.com

 

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