China Resources Pharmaceutical Group Limited has resolved to invest in and construct a health consumer products industrial park (the "Health Consumer Products Industrial Park") (the "Proposed Project"). The Health Consumer Products Industrial Park is expected to include manufacturing facilities and supporting warehousing and logistics facilities for health consumer products (such as medicine and homologous food, health care products and functional foods), quality inspection centers, new product incubation centers, and e-commerce sorting and finished drugs warehouses, among others. It is currently contemplated the main features of the Proposed Project are as follows: Location.
The Health Consumer Products Industrial Park are expected to be located at Dong-E County Economic Development Zone, Liaocheng City, Shandong Province, China. Scope of construction: The total land area of the Health Consumer Products Industrial Park is expects to be approximately 406,800 square meters, and the proposed construction area is expected to be 151,100 square meters, including manufacturing facilities for E-Jiao cake, E-Jiao dates and E-Jiao powder, among others, supporting comprehensive warehouses, e-commerce centers and other storage facilities, quality inspection and incubation centers to meet inspection and new product demands, and public facilities such as sewage treatment and power supply facilities. Construction period: The construction period is expected to be approximately 22 months from the start of on-site construction to the completion and acceptance of the project., Investment amount: It is expected that the total investment amount will be approximately RMB 1.485 billion, representing a fixed asset investment amount of approximately RMB 1.421 billion and initial working capital of approximately RMB 64 million, Source of funding: The Proposed Project is expected to be funded by internal resources of Dong-E-Jiao.
The investment in and construction of the Health Consumer Products Industrial park is a necessary implementation of Dong-E-E-Jiao's ' 1238' strategy, which involves creating a 'Dong-E-Jiao model' for the high-quality development of traditional Chinese medicine, building a robust two-wheel driven business growth model of pharmaceuticals + health consumer products, expanding the health consumer products business on top of the pharmaceuticals business, cultivating a second growth curve, and facilitating cross-segment promotion and empowerment of the two major businesses. The Proposed Project is also in line with the urgent need for the development of Dong-E-Jio's health consumer products business. Dong-E-E- Jiao's existing industrial park has been facing issues such as limited areas for production expansion and constricted main production line capacity, which cannot meet its development needs of swiftly upgrading health consumer products.
In addition, self-built facilities would be beneficial in building Dong-E-Jiao's core advantages in the field of health consumer products. Dong-E-Jiao's health consumer products are mainly E-Jiao series products, and by establishing production at the Dong-E County origin, it is expected that Dong-E-Jio's regional brand will be strengthened, further strengthening its core competitiveness, systematically building brand positions, and controlling long-term costs. The investment in and construction the Health Consumer Products industrial Park is subject to acquisition of the land parcel for the Proposed Project and the execution of the construction agreement and the terms and conditions as set forth therein.
