Architectural Product Market in China

The architectural industry is a major industry in China. 2008 Olympic Games in Beijing and the 2010 World Exhibition in Shanghai have already imposed an explicit positive impact on the Chinese real estate and infrastructural construction market. China is in the midst of a multi-year real estate up-cycle, intertwined by occasional periods of consolidation or correction when the regulators feel that markets may have become a bit too frothy.

In 2005, the newly increased turnover of Chinese architectural industry was RMB1, 002 billion, occupied 5.5% of GDP in China. According to the statistics of the National Statistics Bureau in 2005, there were 55,962 architectural enterprises in China with employees of over 25.93 million. In 2006, the total architectural area of commercial apartment was over 1.9 billion square meters, an increase of 17.1% comparing with the previous year, as the new developed architectural area of 78.1 million square meters, an increase of 14.8% comparing with the previous year.

The potential of our architectural product is largely correlated to that of the architectural industry itself. Architectural formwork is a major tool in concrete architectural projects. The costs of architectural formwork and bracket normally occupied 20% to 30% of total costs of the concrete architectural projects. The architectural teams make use of architectural formwork in over 50% of engineering period. The quality and technique of architectural formwork directly decide the quality, costs, and profitability of the architectural projects.

The need for Green Products

We also foresee a trend of using more green and recycled architectural products in the near future. At present, a variety of architectural formworks are available in China. The raw materials of such formwork may be steel, plywood, plastic, wood/bamboo, or fabricated materials. Bamboo plywood formwork and wood formwork are sharing similar market slice in China, each occupies about 1/3 of China market share. The remaining 1/3 market is shared by steel formwork, plastic formwork, and other fabricated formworks.

Recently steel formwork has been largely prohibited by Chinese government because of its high steel consumption. Industrial analysts anticipate that green and recycled architectural formwork of relatively low cost and longer product life span, will become the leader in china market and will gradually replace most of the existing formworks.

Generally speaking, in order for recycling to be economically viable, there usually must be a steady supply of recyclates and constant demand for the reprocessed goods; both of which can be stimulated by government legislation. China has always been emphasizing the research and development of fly ash, waste plastics and their synthetic materials, made preferential policies to encourage the development.

We plan to enter into carefully selected markets, including Inner Mongolia Autonomous Region,,Tianjin Municipality, Guangdong Province and Hainan Province in the coming two years. And forecast the total production would be more than 12,000 tons per year.