Borun Daqing facility ( Daqing facility) is located in the Corn Industrial Park of Datong district of Daqing City in Heilongjiang Province in northeastern China. The facility occupies an area of 219,156 square meters and employs 563 company-trained empployees. Daqing facility is principally engaged in manufacture and distribution of edible alcohol and its by-products DDGS feed and crude corn oil. It is one of the largest private enterprises and corn-based edible alcohol manufacturers in Heilongijang province.
We acquired Daqing facility in July 2008 and placed it into production at the end of 2008.
Daqing facility has a government permit to proceed up to 1,000,000 tons of corn, which can produce 330,000 tons of edible alcohol. Its current production capacity is 220,000 tons of edible alcohol (30,000 tons of Grade C edible alcohol Phase I, 70,000 tons of Grade B edible alcohol Phase II and 120,000 tons of Grade B edible alcohol Phase III).
Daqing facility enjoys a favorable geographic location since the Heilongjiang Province is one of the largest corn production provinces in the PRC which has a stable supply of corn with lower prices. In addition, there are also a significant number of large and mid-sized local baijiu distilleries situated there which enables Daqing facility to gain access to the baijiu distilleries and potential customers.
We believe that the approved production license for Daqing facility ensures that we can expand our capacity in order to capitalize on near-term market opportunities. We believe that we are in an advantageous position to respond to the expected growth in market demand for edible alcohol.