Rabies Vaccine Production Construction Project of Jilin Yatai Group

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

The rabies vaccine has a long history, and the earliest rabies vaccine was produced by Pasteur of France. In 1882, it successfully applied serial passage attenuated virus virulence, used suitable virus seed to produce vaccine. The rabies vaccine manufactured in China uses rabies virus to inoculate in primary hamster kidney cells; after culturing, venom is collected. After concentration, purification, refining and add aluminum hydroxide as adjuvant, after being accredited to be qualified, it is rabies vaccine that can prevent rabies. This project is a rabies vaccine production and construction project. The prevention and treatment type biological and biochemical series of products, mainly man-used rabies vaccine, BCG RNA, is one of the key development projects of Yatai Group. Rabies vaccine production is based on the production technique, with national, provincial, municipal support for the industrial development. This product uses advanced technology and equipment, and designs according to the new GMP requirements. The surroundings of the project construction site have complete infrastructure, convenient transport, and resources needed for production.

1.1.2 Market Prospects

Rabies is prevalent in most of the countries and regions in the world as one of the oldest diseases that endanger human health. According to statistics, every year at least 4,000 people die of rabies attack. Rabies vaccine, as the only effective way to fight against rabies, has made ​​outstanding contributions to human health.

According to "Rabies prevention and control situation" of the Ministry of Health, rabies cases in China in 2008 reached 24.66 million cases, and in recent years, it has maintained at an annual average of over 24 million people, second only to India, ranking the second in the world. In recent years, China's dog, cat feeding amount rapid increases, and the number of people being hurt by dogs, cat is increasing. According to the used amount of the rabies vaccine by Chinese people, the number of people hurt by the animals is estimated to be 40 million people. It is obvious that there is huge demand for rabies vaccine in China.

The rabies vaccine is type two vaccines, vaccination at people’s own expense. But because domestic dogs feeding amount is increasing year by year, the rabies vaccine faces increasing demand. Guangdong, for example, has a high incidence of rabies trend in recent years; in the province last year, the disease caused by rabies was up to 324 people, and it has become "number two" statutory infectious disease, second only to AIDS, leading to high demand for rabies vaccine. In 2008, the issued amount of domestic rabies vaccine was 19.47 million people, a year-on-year increase of 35%; due to higher national standards, the number of production enterprise becomes small. In 2009, the issued amount of rabies vaccine was 11.73 million people, a year-on-year decrease of 39.7%. Rabies vaccine market in China in 2009-2011 was 76.5 million pieces, 96 million pieces and 115 million pieces, respectively, an increase of 25.5%, 19.8% respectively. The revenues on the 2009-2011 rabies vaccine market were $ 2.142 billion yuan, 2.592 billion yuan, 2.99 billion yuan, respectively, year-on-year growth of 21.0%, 15.4%. It can be seen that the growth rate is decreasing. Last year, the major rabies vaccine production enterprises Jiangsu Yanshen and Hebei Fuer stopped production due to quality problem, the state implemented more stringent production process standards, and national regulatory efforts are increased, and access threshold is enhanced. Yatai pharmaceutical industry started in 1999; it is key and new pillar industry cultivated by Yatai Group. At present, it owns a biological drug R & D center, biological pharmaceutical, traditional Chinese medicine anti-cancer drug, and OTC medicines and proprietary Chinese medicines three production bases (Jilin Yatai Biological Pharmaceutical Co., Ltd., Jilin Yatai Pharmaceutical Co., Ltd., Jilin Yatai Star Pharmaceutical Co., Ltd.), and a pharmaceutical retail chain enterprises (Jilin Pharmacy Pharmaceutical Co., Ltd.). A complete industrial chain with R & D, production, sales has been formed. Prevention and treatment type biological and biochemical series of products, mainly man-used rabies vaccine, BCG RNA, is one of the key development projects of Yatai Group. It has broad market prospect.

  1.1.3 Technical Analysis

The technologies used by the project are the self-owned technology of research institutions in the park, with independent intellectual property rights, without technical risk. This project adopts advanced technology and equipment, designs according to the new GMP requirements, and fully meets the country's strict production process standards.

1.1.4 Advantageous Conditions of Project Construction

（1）Policy conditions

The project construction site is Changchun High-tech Zone. Changchun High-tech Zone is positively apply for national "science and technology and financial combined pilot park” and “three new board pilot park". It sets financial listing office, establishes SME investment and financing service center, establishes “Wharton Fortune Plaza”, lays equity financing, bond financing, public financing three financing channels. The liberal financial services and policies will provide guarantee for follow-up financing of the project. Changchun High-tech Zone also formulates policy support measures for small and medium-sized enterprises, and independently innovative enterprises. It gives fixed amount of innovative financial incentives to the enterprises with independent intellectual property rights. For enterprises with high production value and large amount of paid tax, certain incentive will be given drawn from the retained tax of the High-tech Zone. In addition, in a new round of development strategy of Changchun High-tech Zone, bio-pharmaceutical industry will be considered as one of the key developed pillar industries. Combined with the resources in JilinProvince and ChangchunCity, the human resource advantage, and the unique industrial features of Changchun High-tech Zone, Northeast Biological and Medical Science and TechnologyIndustrial Park in Changchun High-tech Zone Changchun Northeast Core Area is planned. It will be created into the core area of bio-pharmaceutical industry of JilinProvince, and Asia's largest bio-vaccine industry base. The country and province, and municipalities all have supportive policies on the development of the industry. 

（2）Location advantage

ChangchunCity, where Changchun High-tech Zone is located, is the geographic center of Northeast Asia and China's three northeastern provinces. It is the inland port for Chang-Ji-Tu to lead the pilot area, with favorable location conditions. Changchun High-tech Zone is located in the key area for future urban development of Changchun: the Southern District of Hi-tech Zone is near the Southern New City of Changchun, which is the future city center; the Northern District of the Zone is the core area of Changchun Northeast Development and Opening Pilot Zone, the key area for industrial development of Changchun City in the future. Changchun High-tech Zone is located in important location of ChangchunCity, making Changchun High-tech Zone have more superior regional conditions than ChangchunCity. These superior geographic conditions not only create favorable conditions for a new round of rapid development of High-tech Zone, but also are conducive to for the High-tech Zone to further play the radiation, driving and demonstration role of the High-tech Zone.

Moreover, Changchun has developed three-dimensional traffic network. In the aspect of railways, Changchun is an important railway transportation hub in northern China. With Beijing-Dalian line, Chang-Bai line, and Chang-Tu line as the backbone, an east-west-north-south railway network has been formed, with direct access to nearly 40 cities across the country; in highways, Beijing-Harbin high-speed highway, Chang-Ha high-speed highway, Chang-Si high-speed highway, Chang-Ji high-speed highway, Chang-Ping high-speed highway, Chang-Ying high-speed highway, and around-city highway etc. many highways, as well as 302, 102 etc. State Road criss-cross, extending in all directions; in the aspect of aviation, ChangchunLongjiaInternationalAirport is an important regional hub airport in the northeast region, with more than 60 direct flights to more than 20 cities across the country every day. Many international routes lead to Seoul of South Korea, Erkucike of Russia etc. important cities in northeast Asian countries. Developed transportation network lays an excellent location foundation for Changchun High-tech Zone to become the regional economic center of Northeast China and an important platform for Northeast Asia Cooperation.

（3）Scientific research advantage

ChangchunCity gathers 14 full-time colleges such as JilinUniversity, Changchun University of Science and Technology, 39 research institutes such as the CAS Changchun Institute of Optics, 29 national key laboratories, and 76 above the city level enterprise technical centers. The institutions involving biological and pharmaceutical industries are: Changchun Biological Products Institute, College of Chemistry of Jilin University, College of Pharmacy of Jilin University, Changchun Chinese Medicine Hospital, and Jilin Province TCM and Chinese Medicine Institute etc.12 science and technology institutions, 13 key provincial and ministerial labs in the field of medicine, 5 professional national testing organization laboratories in the field of medicine, and 10 above the city level enterprise technical centers of pharmaceutical companies. It is the most concentrated area of JilinProvince in the aspect of science and education resources, and research and development institutions. Pharmaceutical industry is a new industry and the focus of cultivation of Yatai Group. It currently has biological products, anti-cancer traditional Chinese medicine, patent Chinese medicine three production bases; drug retail network and a research and development center. A complete industrial chain integrating R & D, production, sales and service is formed, with strong research strength.

（4）Human resource advantage

ChangchunCity is a famous cultural city of China. The per capita number of college students in Changchun ranks the 6^th in the country. Changchun High-tech Zone has total human resources of about 90,000 people, including high-end creative talents of 30000, accounting for more than 60% of the city; more than 2,400 doctors, masters, and 1,000 overseas returnees, as well as 242 people who lead the founding of corporations, 21 academicians, 23 experts that obtain the subsidy of talent development fund of the provincial government, accounting for 62.5% of the city's total. A team of high-level personnel that covers all fields, with reasonable echelon, good quality, convergence of old and new, and can meet the development needs of innovative enterprises has been formed. Around the strategic emerging industries and high-end services, within five years, it will introduce 30 overseas high-end and leading talents, introduce and cultivate 200 high-level innovative talents that will start business, 300 senior management personnel, and 1000 highly skilled personnel. By 2015, the total amount of human resources in the region will reach 145,000 people, and over 100 start enterprises led by high-level personnel, and that have an important support and leading role in regional development will be cultivated.

（5）Industrial foundation advantage

In 2011, the pharmaceutical enterprises above designated size in Changchun High-tech Zone realized output value of 3.8 billion yuan, profits of 310 million yuan; the total industrial output value accounted for 1.3% of the zone. According to statistics in late 2011, the High-Tech Zone currently has 176 biological and pharmaceutical enterprises, including 127 pharmaceutical enterprises (including genetic engineering drugs), 49 biotech companies (including bio-medicine). The industrial park has relatively strong industrial base.

Yatai Pharmaceutical Industry now has over 100 drug approval numbers, forms anti-cancer Chinese medicines represented by Ginseng number one capsule, rabies vaccine and rapid cold treatment medicine, biological products and modern patent Chinese medicine three series of products. For the ginsenoside Rg3 raw material of national class one new drug, each technical index has reached leading international level, and development of its series of products is determined to be “key project in modernization and internationalization of Chinese Medicine of China”. The Jilin Pharmacy now has more than 300 chain stores and franchise stores, with distribution network covering major cities in JilinProvince; it was appraised as “Model Shop in anti-faking activity of China”, and entered “top 20 enterprises of China drugstore chains”. It is also designated as “medicine reserve warehouse unit of China” by Jilin Provincial government. Thus it has relatively strong industrial foundation advantage.

（6）Platform advantage

Changchun High-tech Zone exerts the advantage of R & D and innovation, promotes industrial agglomeration, strives to improve the international competitiveness of the bio-pharmaceutical industry, drives the regional industrial structure optimization and upgrading, and constructs nine public platforms. First: experimental animal breeding and experimental center; second: test center of genetically engineered drugs; third: technology center of biological enzyme engineering; fourth: vaccine research and development engineering center; fifth: drugs screen center; sixth: research center of Chinese medicine formulations; seventh: food and drug inspection and information consulting service center; eighth: public platform for Chinese medicine pretreatment; ninth: irradiation and sterilization device center. The construction of the nine platforms will play a crucial role for improving the biological and pharmaceutical industrial chains, and is conducive for enterprises to settle in the zone and invest in factories. In addition, the High-tech Zone also sets up specialized departments and Industry Bureau to serve related businesses and projects. Thus it has outstanding platform advantage.

1.2 Content and Scale of Project Construction

1.2.1 Product Scheme and Scale

This product uses advanced technology and equipment, is designed according to the new GMP requirements. The surroundings of construction site have complete infrastructure facilities, convenient transportation, and relatively complete resource conditions for production. The estimated annual output of rabies vaccine will be 4 million pieces.

1.2.2 Construction Content

(1) The factory covers an area of 680,000 square meters and a construction area of 450,000 square meters.
(2) Equipments used for making rabies vaccine, such as Chromatography column, autoclavable cabinet, dry heat sterilizer, washing, drying and filling linkage line, capping machine, bottle spinning machine, lyophilizer, liquid mixing tank, ultrafilter and extract tank etc.

1.3 Total Investment and Funds Raising of the Project

Total investment of the project is 1.2 billion yuan, including construction investment of 0.7 billion yuan, interest incurred in construction period of 65 million yuan, and working capital of 435 million yuan.

 Table 1      List of Total Investments of Project               Unit: 10,000 yuan

Note: the “10,000 yuan” in the table is RMB.

1.4 Financial Analysis and Social Evaluation

1.4.1 Major Financial Indexes 

In normal year of this project, it will realize operating income of 2 billion yuan, profit of 250 million yuan, financial internal rate of return of total investment of 15%, payback period (after tax) of all investment of 6.28 years, and profit rate of investment of 16.7%.

 Table 2         List of Major Indexes for Financial Benefits Forecast  

 

Note: the “10,000 yuan” in the table is RMB.

1.4.2 Social Evaluation

Rabies is an acute infectious disease caused by the rabies virus, also known as hydrophobia, mad dog disease. The rabies virus is mainly spread among animals, and people will be infected. According to statistics, every year, at least 4,000 people die of rabies attack. Rabies vaccine, as the only effective way to fight against rabies, has made ​​outstanding contributions to human health. Rabies cases in China in 2008 reached 24.66 million cases, and in recent years, it has maintained at an annual average of 24 million people, second only to India, ranking the second in the world. In recent years, China's dog, cat feeding amount rapid increases, and the number of people being hurt by dogs, cat is increasing. According to the used amount of the rabies vaccine by Chinese people, the number of people hurt by the animals is estimated to be 40 million people. The implementation of this project not only has good economic returns, but also makes a great contribution to human health, and has great social benefits. In addition, due to huge investment of the project, the implementation of the project will bring a lot of opportunities for the local place, and make some contribution to the stability of the region.

1.5 Cooperative Ways of the Project

Joint venture cooperation.

1.6 What to be Invested by Foreign Party

Capital, and foreign investment accounts for 49%.

1.7 Construction Site of the Project

The Changchun Northeast Core Area of Changchun High-Tech Development Zone

1.8 The On-going Condition of Project

Project cooperation plan has been compiled.

2. Introduction to Partner

2.1 Basic Conditions

Name of project undertaker: Jilin Yatai (Group) Stock Co., Ltd.

Legal address: 1801 of Jilin Avenue, Changchun City

Legal representative: Song Shanglong

Corporate ownership form: limited liability

2.2 Overview of Project Undertaker

The Yatai pharmaceutical industry started in 1999. It is a key and new pillar industry of Yatai Group. At present, it owns a biological drug R & D center, biological pharmaceutical, traditional Chinese medicine anti-cancer drug, and OTC medicines and proprietary Chinese medicines three production bases (Jilin Yatai Biological Pharmaceutical Co., Ltd., Jilin Yatai Pharmaceutical Co., Ltd., Jilin Yatai Star Pharmaceutical Co., Ltd.), and a pharmaceutical retail chain enterprises (Jilin Pharmacy Pharmaceutical Co., Ltd.). A complete industrial chain with R & D, production, sales has been formed. The pharmaceutical industry currently employs 3,200 people, and 80% of them have junior college degrees and above. A united, capable, competitive, honest professional team has been formed. Yatai Pharmaceutical Industry now has 108 drug approval numbers, forms anti-cancer series of products, mainly national class one new drug of ginsenoside Rg3 and its preparations of ginseng capsule; prevention and treatment type biological and biochemical series of products, mainly man-used rabies vaccine, BCG RNA; the cerebrovascular treatment Chinese and Western medicine products, mainly musk cardio-cerebral medicine, refreshing and recycling capsule. At the same time, it is also researching class one biological anti-cancer drug of "biological missile", second-class anti-cancer drug of ginsenoside Rg3 injections, class three new drug of hemorrhagic fever vaccine, the wakening tablet for anti-manic, copied type of four-season cold tablet, ageratum stomach cleaning capsule etc. subsequent varieties. The specified and diversified product structure of Yatai Pharmaceutical Industry has been basically established. The Jilin Pharmacy now has more than 400 chain stores and franchise stores, with distribution network covering major cities in JilinProvince; ten integrated and specialized outpatient clinics are distributed in Changchun city. In 2006, it was appraised as “Model Shop in anti-faking activity of China”. It is the only “national drug repository unit” in JilinProvince, and is appraised as “top 20 enterprises of China drugstore chains in 2009”, and won honor in “China drugstore chain ranking during 2010-2011”, with comprehensive ranking of the 14^th.

The corporate legal representative is Song Shanglong, born in November 1953, member of the Chinese Communist Party, with bachelor's degree, researcher, senior economist, and senior engineer. He is representative of the Ninth Party Congress of Jilin Province, representative of the 9^th and 10^th People’s Congress of Erdao District, Changchun City, representative of the 10^th and 11^th People’s Congress of Changchun City, representative of the 10^th and 11^th People’s Congress of Changchun City, and representative of the 11^th NPC. He has consecutively been appraised as pioneer of Changchun City in starting business, excellent party member of Jilin Province, special model worker of Jilin Province, outstanding entrepreneur of Jilin Province, Top Ten Persons of Jilin Province, hero in the revitalization of the of Changchun old industrial base, senior expert in Jilin Province, the National Outstanding Entrepreneur, winner of National Labor Medal. In September 2008, he was elected vice president of the China Enterprise Confederation and China Entrepreneurs Association.

2.3 Contact Method

Postal code：130012

Contact person of project undertaker: Li Tiangang

Tel：0431-85542548    13578712560

E-mail：lee-66666@163.com

 

Contact person of city (prefecture) of project：Lou Huimin

Tel：0431-82715338

Fax：0431-82715338

E-mail：cc82715338@126.com

Website of city or prefecture：www.ccmbc.com