Securities code: Jinhe Biotechnology Co.Ltd(002688) securities abbreviation: Jinhe Biotechnology Co.Ltd(002688) Announcement No.: 2022016
Jinhe Biotechnology Co.Ltd(002688)
Announcement on the new industrial chain extension project with an annual output of 15000 tons of high-end erythritol
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and are liable for false records, misleading statements or major omissions in the announcement.
1、 Overview of foreign investment
On April 20, 2022, the 27th meeting of the 5th board of directors of Jinhe Biotechnology Co.Ltd(002688) (hereinafter referred to as “the company”) deliberated and adopted the proposal on the new industrial chain extension project with an annual output of 15000 tons of high-end erythritol with 9 votes in favor, 0 against and 0 abstention. The total investment of the project is expected to be 162338 million yuan. This foreign investment does not constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies. The proposal does not need to be submitted to the general meeting of shareholders of the company for deliberation and approval.
2、 Basic contents of the project
1. Project Name: industrial chain extension project with an annual output of 15000 tons of high-end erythritol.
2. Employer: Jinhe Biotechnology Co.Ltd(002688) .
3. Construction site: Tuoketuo Industrial Park, Tuoketuo County, Inner Mongolia.
4. Construction content: the project plans to acquire 47600m2 of land. The buildings in phase I and phase II of the project cover a total area of 24592m2, and the buildings in phase I and phase II cover a total construction area of 68536m2, including fermentation workshop, extraction and refining workshop, finished product warehouse, etc.
5. Construction scale: the project has an annual output of 15000 tons of high-end erythritol.
6. Project construction period: the planned starting and ending period of construction is from March 2022 to October 2024.
7. Investment estimation: the total investment of the project is 162338 million yuan, of which the construction investment is 155462 million yuan, including 1436714 million yuan for fixed assets and 2.028 million yuan for other expenses of fixed assets
The construction cost is 2.6226 million yuan and the construction land cost is 7.14 million yuan; The working capital is 6.876 million yuan.
8. Fund raising: the total investment of the project is 162338 million yuan, all of which are solved by the company’s own funds. 3、 Purpose, risk and impact of project investment on the company
1. Purpose of project investment
Erythritol is a substitute for traditional added sugar such as sucrose. The change of consumers’ sugar concept is the core driving force for the development of erythritol industry. After years of cultivation of healthy sugar concept, the new sweetener industry represented by erythritol has entered a period of rapid development. At present, China has become a global erythritol manufacturing center and will continue to consolidate.
With the improvement of economic development level, the substitution trend of sweeteners for sugar and other added sugars in food and beverage fields has been established and is gradually deepening. The existing sugar market is huge, and the substitution space of sweeteners in the future is very broad. As a new type of “natural” and “zero calorie” sweetener, erythritol market space has entered a period of rapid growth, and will maintain a good growth trend in the future, The development space of the industry market is considerable. In terms of industry space, erythritol is the fastest-growing sweetener category in recent years.
Jinhe starch company completed the construction of 150000 tons of liquid sugar project in 2018, and officially commissioned and operated on December 30, 2018, with a production capacity of 150000 tons.
The raw material of erythritol uses the liquid sugar of the existing company’s products to extend the existing corn starch liquid sugar process backward to produce erythritol products. Relying on the existing product line, with less investment, erythritol with higher added value and broader market prospect can be produced.
2. Main risks of the project
(1) Market risk
1) The acceleration of technological progress makes the actual demand of products lower than the predicted value, which affects the expected benefits of the products of the project.
2) There are new competitors to join, resulting in the reduction of the market share of the project products.
3) The market competition intensifies and the price of project products decreases, resulting in the reduction of expected benefits.
(2) Investment risk
In terms of investment, there are risks such as insufficient engineering quantity estimation or increased investment caused by the rise of equipment and material prices. There may also be the risk of prolonging the construction period due to poor planning, construction quality problems and other external conditions.
3. Impact on the company
Improve the profitability of enterprises and enhance their ability to resist risks.
4、 Documents for future reference
1. Resolutions of the 27th meeting of the 5th board of directors of the company;
2. Independent opinions of independent directors on matters related to the 27th meeting of the Fifth Board of directors.
It is hereby announced.
Jinhe Biotechnology Co.Ltd(002688) board of directors
April 20, 2022
