I. Project Name:
Introduce and Develop the New Water-cooled Diesel Engine

II. Project Implementation Agency:
Shaanxi North Power Co., Ltd.

III. Project Description:
Shaanxi North Power Co., Ltd is a sub-company subjected to China Weaponry Industrial (group) Co., and it is also the enterprise to have the right to manufacture gas engines and import and export mechanical and electrical products. The main business is blower-cooled engine and it's accessories- the research and development and production of pump filters. The company has the productive capacity of annual output of 2000 blower-cooled engines and 10000 sets of all kinds of pump filters.

Introducing to develop the series of German MAND28 water-cooled engine by the ways of joint venture, buying shares with technology, license transferring, etc. With the help of inner coordinated cooperation, we can put the import substitution rate of the products to 80%. It will have the productive capacity of annual output of 30000 sets of engines by technological transformation, which will be carried out by two phases within three years. The first phase will be completed between the year 2004 and 2005 and it will have the capacity of annual output of 1500 sets of engines. Till the year 2006, the second phase will be finished.

IV. Total Investment and Cooperation Form:
The total investment of the project is USD 38.69 million, including: USD 31.45 million for the fixed assets; 3.63 million for introducing technology and USD 3.62 million for current funds. Joint Venture and Cooperation are welcomed.

V. Anticipation of Market and Investment Return:
After completion of the project, it is calculated that the profit rate will be 14.07%, which is over the average profit rate 8.94% in gas engine industry. The payback period of the investment will be 6years, and the investment rate is 29.3%.

Contact Person: Zhao Wenli
Tel: 86-917-6239036
Fax: 86-917-6296065
Add.: 51# Chencang District, Baoji 721300