Annual Output of 120,000 Tons of EVA (Ethylene - vinyl acetate copolymer) Project of Jilin City 1.

Introduction to the Project 1.1 Project Background 1.1.1 Product Introduction Ethylene - vinyl acetate (EVA and VAE) is the copolymer resin of ethylene and vinyl acetate (VAM), is one of the varieties of the polyethylene resin with special performance. Abroad, it is universally called EVA. But in China, according to different content of vinyl acetate, people divide ethylene and vinyl acetate copolymer into EVA resin and VEA latex. EVA resin has good flexibility, impact resistance, filler mixing and heat sealing, and the content of vinyl acetate in polymer is generally not more than 40%. The products processed with EVA resin have good flexibility, impact strength, resistance to environmental stress cracking, and good optical performance in a wide temperature range. EVA resin is mainly used in the manufacture of re-packaging films, adhesives and coatings, injection and extrusion products, foam products, polymer modifiers, paraffin and asphalt modifiers etc. 1.1.2 Market Prospects In the current world, EVA production is mainly concentrated in North America, Western Europe and Asia. Major producers are DuPont Company, Exxon Company and Thailand Oil Company; in 2011, it had a production capacity of approximately 4.28 million tons/year. It is expected that in the future, the EVA demand will grow with an annual average speed of 4.2%. At present, the EVA manufacturers in China are Beijing Organic Chemical Plant, Shanghai Petrochemical Complex, Yanshan Petrochemical Company, Daqing Petrochemical Company. The production capacity is approximately 700,000 tons/year. In 2011, China's EVA demand was 680,000 tons, and the average annual growth rate of demand for EVA is about 7%. It is estimated that by 2015, demand will reach 100 million tons. In recent years, China's EVA Consumption has increased rapidly, the domestic supply gap is big, and every year, a large amount of imports is needed. Therefore, actively developing EVA in China is conducive to further enhancing the competitiveness of advantageous industries, such as shoe making, and toys etc. industries. 1.1.3 Technical Analysis Adopt high-pressure bulk polymerization technology; the technology can be imported from BASF of Germany,Japan's Sumitomo Chemical or Italian Eni. 1.1.4 Advantageous Conditions of Project Construction 1The policy support Development Plan of oil and chemical industry during the Twelfth Five-Year of the country proposed to ensure the effective supply of petrochemical and chemical products during the 12th Five-Year. Based on the domestic market, it will reasonably arrange the capacity growth of petrochemical and chemical products which have rigid demand, taking into account to optimize the industrial layout and process flow; effectively increase the supply capacity of olefins, organic raw materials, synthetic materials, new chemical materials and specialty chemicals etc. petrochemical and chemical products which are in shortage in China. The project is in line with the industrial policy of the country and JilinProvince. 2Technical support Adopt high-pressure bulk polymerization technology; the technology can be imported from BASF of Germany,Japan's Sumitomo Chemical or Italian Eni.

3Supporting conditions of public engineering Jilin Economic Development Zone has complete set of public facilities, equipped with "seven connections and one leveling" infrastructure conditions; favorable external supporting facilities provide a solid base for the project, and saves construction investment. 4 Raw material advantage The raw materials of ethylene and vinyl acetate required for the project is solved by the new project of producing olefins from methanol and the matching vinyl acetate project. 5Human resource advantage Relying on the strong technical force of Jilin City, the Economic Development Zone has talent advantage. Jilin has existing professional and technical personnel of 160,000, and it gathers a large number of outstanding professionals, especially in the chemical industry, chemical fiber, metallurgy, automobiles, electricity, agricultural and sideline products deep processing industry. Jilin City currently has about 400,000 industrial workers, all having received technical training. Most of them have work practices and operating experience in large-scale production enterprises, their quality is relatively high. Of which, there are about 200,000 manual workers, 100,000 skilled laborers, and about 100,000 college graduates. Jilin City currently has 15 independent research and technology development institutions, eight colleges and universities, with nearly 80,000 students, 27 secondary vocational and technical schools, thus it can meet the talents needs for the development of various sectors. 1.2 Content and Scale of Project Construction 1.2.1 Product Scheme and Scale The project will produce EVA of 120,000 tons, including EVA products with VA content of 3%--20%. 1.2.2 Construction Content The project covers an area of 20,000 square meters; the construction site of the project is in the Chemical Industrial Park of Jilin Economic Development Zone. To ensure the safe, reliable, stable and efficient operation of the device, make device reach the desired indicators, equipment selection and procurement will be carried on according to the technical requirements of the patent owners. 1.3 Total Investment and Funds Raising of the Project 1.3.1 Total investmentdetailed in table 1 Total investment of the project is 1.1 billion yuan, including construction investment of 800 million yuan, working capital of 300 million yuan. This estimate does not take into account the debt capital and interest incurred in construction period. Table 1 List of Total Investment of the Project unit: 10,000 yuan Serial No. Name of expense Investment amount % to total investments Remarks

Construction 1 investment 80000 73 2 Working capital 30000 27 Total investment of 3 110000 100.00 the project 1.3.2 Funds Raising Plan All capitals are solved through financing of investor. 1.4 Forecast of Financial Benefits and Social Benefits 1.4.1 Major Indexes for Forecast of Financial Benefits detailed in table 2 Table 2List of major indexes for financial benefits forecast Serial No. Name Unit Index Remarks 10,000 1 Operating income 240000 Normal year yuan/a 10,000 2 Total profits 30240 Normal year yuan/a Financial internal rate of 3 % 25 After tax return of all investments Recovery period of all Including construction 4 a 5.6 period of two years investmentsafter tax 5 Profit rate of investment % 27.5 After tax Note: the 10,000 yuan in the table is in RMB. 1.4.2 Analysis of Social Evaluation The benefits of this project are greatly influenced by the price of the raw material of ethylene and vinyl acetate. Due to the support of MTO project and acetate-ethylene project, so the product has a strong competitiveness on the market. 1.5 Cooperative Ways of the Project Sole investment. 1.6 What to be Invested by Foreign Party Capital. 1.7 Construction Site of the Project Jilin City Economic and Technological Development Zone. 1.8 The On-going Condition of Project Project proposal has been finished. 2. Introduction to Partner 2.1 Basic Conditions
Name: Jilin Economic and Technological Development Zone.

Legal address: No. 516-1 of Jiuzhan Street, Jilin City, Jilin Province Legal representative: Zheng Guoxue (director of the administrative committee) 2.2 Overview Jilin Economic and Technological Development Zone was established in the end of 1998; in April 2010, it was officially approved as National Economic and Technological Development Zone by the State Council of the People's Republic of China, and it practices the existing policies of national economic and technological development zones. Jilin Economic and Technological Development Zone is the only national patent industrialization pilot base in the

north of the Yellow River of China, and it has passed the ISO14001 environmental management system and ISO9001 quality management system certification. The administrative area is 103 square kilometers, the planned area is 44 square kilometers, the resident population is 88,000 people; currently, it is settled by 1605 enterprises of all types, of which, 86 enterprises have scale of certain size. According to the overall planning and development strategies of Jilin Economic and Technological Development Zone, Jilin Economic and Technological Development Zone relies on existing resources and industrial advantages, focuses on the development of chemical and new materials, carbon fiber, auto parts, light industry and textile and branded food etc. leading industries; in the national economic development strategy, it fully exerts the key nod role of Chang-Ji-Tu development and opening up the pilot area, the radiation and leading role of Chang-Ji integration leading region, the role of northeast important independent innovation demonstration zone. In the next five years, by virtue of the policy advantages, system advantages and environment advantages of national economic and technological development zone, Jilin Economic and Technological Development Zone will walk towards one hundred billion development zone, and become the core area of new industrial zone in north Jilin. Introduction to legal representative: Zheng Guoxue, male, born in October 1961, Han nationality, CPC member, with university degree. He was former director of the Propaganda Department of Shulan Municipal Party Committee, Deputy Mayor, member of Chuanying District Standing Committee, deputy governor, deputy director of Jilin Economic and Technological Development Zone Administrative Committee, and vice director of Jilin City Personnel Bureau. Currently, he is director of Jilin Economic and Technological Development Zone Administrative Committee. 2.3 Contact method Contact personLi Xiujuan Tel0432-63501332 18704320239 Fax0432-63501332 E-maillxj661107@126.com Contact method of the city (prefecture) Economic Cooperation Bureau of project Contact personWei Xiaoli, Liu Aiguo Tel0432-62026489 E-mailproinvest@126.com Websitewww.jlszsw.gov.cn