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Investment Outline of Business Inviting Projects of
Hunan Huarui Logistics Co., Ltd



1. Basic introduction of Hunan Huarui Logistics Co., Ltd.
Hunan Huarui Logistics Co., Ltd. (hereinafter abbreviated as Huarui) is a subsidiary company of Hunan Publishing Investment Holding Group Co., Ltd., invested by Hunan Xinhua Bookstore Group Co., Ltd., Hunan Provincial Printing Materials General Company, Hunan Education Publishing House, Hunan Fine Arts Publishing House, Hunan Literature & Art Publishing House, Yuelu Publishing House, Hunan Science & Technology Publishing House, Hunan Juvenile & Children¡¯ Books Publishing House with registered capital 110 million Yuan, which locates at Hunan Pressing Science Park north to Leifeng Dadao Road, Xingcheng Township, Wangcheng County, with land area 54,667 square meters. Huarui was registered and established on September 28, 2003, and put into trial production on April 8, 2005 and put into production formally on January 1, 2006, which has assets 125 million Yuan? at present. Huarui is operated as a third party logistics company, the business scope of which is including: goods circulation and distribution business permitted by laws, codes and policies of China; to provide common goods transportation; logistic services and freight agency services; information consultation services; storage and distribution for books and audio & video products of Hunan Province as its main business, and storage and distribution of foods and household dialy chemicals as its supplements. It is predicted that Huarui¡¯s operating incomes in 2006 will be 32 million Yuan.

2. Huarui¡¯s orientation and business development strategies

Huarui¡¯s orientation: Huarui is oriented as a third party logistics company about cultural and other relative products, professionally engaging on freight agency and other business including storage, distribution, information consultation and etc, devoting itself to develop supply chain management and logistics consultation. The objective of Huarui in future 10 years is to be developed as a modern cultural logistics center covering Hunan Province, penetrating into Central and South of China, facing whole area of China, with comprehensive functions and relatively large scale in Central and South of China, to form a distribution and purchase platform for cultural and other relative products in Central and South of China.
Business development strategies: with books and audio & video products of Hunan publication system as its basic business, to develop logistics distribution business of social cultural goods, household electrical appliances, commodities, foods and other products relative to culture. Objects for developing business: manufacturing enterprises of household electrical appliances, commodities, foods; large-type supermarkets; to conclude strategic league with other third party logistics enterprises.
¡ª¡ªTo meet the target to be a first-class logistics enterprise of China in 2010. To make efforts to be profitable in 3 years, return its investment in 10 years, achieve 10 billion Yuan value of goods distributed in 2016, annual incomes from value-added logistics services over 50 million Yuan in 2016, and annual profit over 10 million Yuan in 2016.
¡ª¡ªTo accomplish integration of logistics resources of Hunan publication system in 2007, and ensure to meet the demand of logistics distribution for chain operation of Xinhua Bookstore of Hunan Province.
¡ª¡ªTo establish branches or conclude strategic league with local third party logistics service providers in the important cities of Hunan Province, Changsha, Yueyang, Shaoyang, Chenzhou and etc, and Beijing, Shanghai, Wuhan, Zhengzhou, Xi¡¯an, Chengdu, Guangzhou and other central cities, to develop chain logistics operation and accomplish business net linking all important cities quickly. To establish 10 quick, secure, stable, dependable trunk transport lines, form a deep distribution net among 8 cities of China to provide distribution system of B2B, B2C, and then to form a 3-level linkage transport system consisting of a trunk transport net? among districts, a transport net inside the district, and a deep distribution net.
¡ª¡ªTo depend on substantial service net and information system of Huarui, to collect and classify customer resources of whole country, exercise collective purchase, to provide one-station comprehensive logistics services for customers from purchase to transport, quicken reaction speed for distribution demand of customers, to meet logistics distribution demand of chain operation with the features of ¡°large varieties, small batch, multiple batch and short period¡±, and achieve 24-hour door-to-door services with high quality.

3. Brief introduction of Huarui¡¯s staff

Huarui has 320 employees now, including 32 management officers, 6 marketing promoter, 8 employees for system maintenance and machinery repair, 249 production employees, 6 financial employees, 6 administrational employees, 13 security guards and cleaners.

4. Industrial situation and Huarui¡¯s development advantages

(1) Industrial situation
¡ª¡ªthere are 3 kinds of Competitive Forces: 1. state-owned logistics enterprises quickening their reorganization, reforming their ownership and transforming their business to develop modern logistics; 2. private-owned logistics enterprises having extraordinarily developed and with annual incomes of hundreds millions Yuan or billions Yuan, which have not burden of history, but have clear assets structure, optimized resources and flexible mechanism, and usually have comparative advantages in some certain fields; 3. logistics enterprises with foreign brands marching in China logistics market.
¡ª¡ªThere are seldom third party logistics enterprises in Hunan Province which may provide one-station service, and commonly the logistics enterprises in Hunan Province are established by and for some enterprises with single function: some of them provide express service by taking advantage of their system; some only provide transport service; some of them provide storage service, or even lease their storehouse only; only few enterprises are oriented to develop third party logistics but with a small scale in Hunan Province.
¡ª¡ªThe trend to segment market resources for Hunan logistics enterprises has been clearer than before, for example, depending on the logistics in Hunan No.6 Engineering Corporation and Hunan Construction Engineering Group Corporation, Hunan Zhongxing Logistics Co., Ltd. mainly develops logistics for construction industry; Quanzhou Logistic Port devotes itself to third party medicine and foods logistics with total investment accomplished 480 million Yuan, total investment over 10 billion Yuan in plan and 35 thousand square meters storage area.
In general, professional third party logistics enterprises in Hunan Province have not had a large scale and competitive advantages, most of which still provide traditional storage and distribution services, and the orientations of third party logistics enterprises are professional and focused on the fields with outstanding competitive advantages respectively; especially, some logistics enterprises, depending on integrating internal logistics resources, begin to establish third party logistics companies facing market. People¡¯s Government of Hunan Province has much ardor and spares no effort to construct Logistics Park.
(2) Development advantage of Huarui
¡ª¡ªHuarui has near to 50 thousand square meters storage area in its first-phase project, and the storehouse has first-class facilities, embedded goods rack, one automated pick line and 3 automated conveyor & transmissive belts, all of which are controlled by a powerful management system and operated in mechanization.
¡ª¡ªHuarui has established rather good symbioses with several transport enterprises, has more than 1000 vehicles available facing more than 3000 points scattering in all cities, counties, towns and townships of Hunan Province and other domestic places.
¡ª¡ªHuarui has established rather good symbioses with several logistics enterprises, such as Baogong, DHL, Skyworth, and has concluded strategic cooperation relationship with DHL in 2006. In 2005, Huarui was assigned as key modern logistics enterprise in touch by CPC Committee of Hunan Province and Hunan Development and Reform Committee, and exercised dynamical management.
¡ª¡ªChangsha City locates at the center of Central of China, has obvious location advantages to establish district distribution center.
¡ª¡ªHuarui¡¯s headquarters locates at Hunan Pressing Science Park along Leifeng Dadao Road, Hexi City (county-level), Changsha City, which is 12Km away from urban area of Changsha City, 7Km away from county seat of Wangcheng, 16Km to Changsha North Railway Station, 14Km to Changsha waterborne port, along the second beltway of Changsha City. The industries and commerce around Hunan Pressing Science Park develop fast, and the location is predominant to construct Logistics Park.

5. Investment introduction

(1) Fund use plan:
¡ª¡ªTo enlarge storage area and establish logistics park: Huarui has 50,000 square meters storage area at present, which is not able to meet future development demands, and Hunan Pressing Science Park has over 1600 Mu area (Mu is a Chinese area unit, 2000/3 square meters) to develop. Now first-phase project has been accomplished and put into use, and it is planned to enlarge investment in the second-phase project.
¡ª¡ªTo establish a net for distribution: 1. to establish a net linking all county-class or above cities in Hunan Province quickly to establish a provincial logistics distribution net and management system. 2. By chain operation and reorganizing successful middle-type and small-type logistics enterprises selected in the whole country, to accomplish a net layout of the whole country by smallest fund and in shortest time.
¡ª¡ªTo strengthen transport capability: to purchase vehicles and organize Huarui¡¯s cargo vehicle team to strengthen its logistics distribution capability.
(2) Cooperation
Ownership cooperation: share transfer or capital enlargement.
Business development in cooperation: as to a certain business, both of parties may invest and operate it jointly.

6. Contact information:

Contact person: Tang Zhenyu, Zhang Wenfei
Tel: 0731-4302627 4302523
Mobile: 13873119586
Fax: 0731-4302627
E-mail: tangzhenyu@hnpg.com.cn
zhangwenfei@hnpg.com.cn

 




 
 
 
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