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Foreign Technology Cooperative Projects

A. Bulk Cement and Concrete Pump Trucks Development and Manufacturing Project

1. Contents: We plan to develop high-class bulk cement trucks and concrete pump trucks with either domestic or imported chassises of STEYR and BENZ. The Chinese party will provide factory buildings and some machinery facilities. The foreign party is expected to provide the advanced technology, CKD, SKD and production equipment. Products will be sold in the domestic market mainly but also abroad.

2. Market Analysis: With the development of the Chinese national economy, many state-level engineering projects and infrastructure construction projects will take place, so there is an ever-growing demand for the bulk cement trucks and concrete pump trucks.

With more and more homemade chassises of STEYR, trucks mentioned above will gradually replace imported trucks and meet domestic market needs.

3. Investment Requirement and Estimated Return:
It is estimated that this project needs 10 million US dollars. The Chinese party will invest in the form of providing factory buildings. The foreign parties are expected to invest in the form of providing the key technology and equipment. Further discussions on the investment proportion will be made later.

After the project goes into operation, the annual output is estimated to be 300 vehicles peer year, with an annual sales of 400 million yuan and profit of 40 million yuan.

B. Small Farm-Use Trucks Development and Manufacturing Project

1. Contents:
We plan to manufacture the high-class 0.5/1.0-Ton farm-use trucks by introducing the circulating fund, diesel engines (16KW) and other technologies. The Chinese party currently has the capacity of producing 10,000 of this kind of trucks per year, but the Model PL1608 needs to be improved.

Products will be sold in the domestic market mainly but also abroad.

2. Market Analysis:
The farm-use trucks have many characteristics, such as the diesel engine, small tonnage, medium/low speed, low price, affordable repairing costs and easiness to drive, etc. All of these are suitable for driving on Chinese countryside roads and Chinese farmers' purchasing power, so there is a big market for these trucks. For example, the two-row-seat trucks made up 70% of the truck market in 1995, and the market demand exceeded supply.

3. Investment and Benefits:
It is estimated that the project needs 10 million US dollars. The Chinese party will invest in the form of providing currently available technologies, assembly lines and factory buildings. The foreign parties are expected to invest in the form of providing the key technology and cash capital. Further discussions on the investment proportion will be made later. After the project goes into operation, the annual output is estimated to be 30,000 trucks, with an annual sales of 600 million yuan and profit of 50 million yuan.

Suggested Cooperate Method: jointly-operate, jointly-develop

Shandong Penglai Automobile Industrial (Group) Company

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