Xiang Nian

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The proposed investment is a $10 million equity investment in Henan Xiang Nian Foods Co. Ltd (“XN”), a Chinese wheat based noodle manufacturer with a total production capacity of 100,000 tons of dry noodles per annum located in Nanyang City, Henan Province. XN produces wheat noodles by combining wheat flour, salt, water, heating, forming, air drying, sizing and packaging into 500, 750, 900 and 1000 gram packets intended for retail sale. Collection of wheat and distribution of end product is conducted by XN with its own vehicle fleet. The existing XN factory is located within a city authority-designated industrial park. In 2015 XN acquired a milling company, Henan Khong Guan Cereal and Oil Food Products Co. Ltd (HKG) that will supply 45% of wheat flour needs to the noodle factory, balance of wheat flour is sourced from other commercial mills in the province. The wheat supply base is 95% from Henan province with the balance of grain demands purchased through traders. The HKG mill is located within the suburban fringe of Nanyang.  The proposed investment is to support land purchase, XN noodle factory expansion 140 mu (or 9.5 hectares,) within the designated industrial zone, and working capital. The scope of the appraisal is XN and HKG the (“group”.)