Tobacco Group Intends to Acquire Shares in Tobacco Leaf Threshing, Redrying Factory

Source from:  Lingling City 06/13/2005

Etsong Tobacco Group in east China's Qingdao City intends to acquire shares in Lingling Tobacco Leaf Threshing and Redrying Factory in south central China's Hunan Province, a State-run enterprise in the process of transformation into a joint-stock limited liability company. On June 7, Etsong Group - one of the 36 key Chinese tobacco manufacturers designated by the State Tobacco Monopoly Administration (STMA) - sent a delegation to inspect Lingling Tobacco Leaf Threshing and Redrying Factory and explore the possibility of investment in return for share acquisition. Under the relevant reform plan, the transformation of Lingling Tobacco Leaf Threshing and Redrying Factory will be completed by October 1, 2005. According to the delegation, the leadership of Etsong Group has an intention to make investment in Lingling Tobacco Leaf Threshing and Redrying Factory, and its current inspection is intended to discuss relevant issues with the leadership of Lingling Tobacco Leaf Threshing and Redrying Factory. Established in 1986, Lingling Tobacco Leaf Threshing and Redrying Factory is a State-owned medium-size enterprise with a total workforce of 490 and 150 million yuan (18 million U.S. dollars) in fixed assets. It is the only tobacco leaf threshing and redrying factory in Hunan with the independent corporate status, capable of processing 600,000 dan (30,000 tons) of tobacco leaves annually. In the initial years following its establishment, Lingling Tobacco Leaf Threshing and Redrying Factory was operating the processing and trading of leaf tobacco. In 1989, it merged with the former Lingling Leaf Tobacco Trading Department to form the Lingling Leaf Tobacco Production and Trading Company, responsible for the State purchase, processing and wholesale of leaf tobacco in Lingling City. In 1994, Lingling Leaf Tobacco Production and Trading Company was deprived of its leaf tobacco wholesale right, and became a tobacco leaf threshing and redrying factory. In 2002, Lingling Tobacco Leaf Threshing and Redrying Factory processed 197,000 dan (9,850 tons) of tobacco leaves, earning 2.64 million yuan (318,000 U.S. dollars) in profits. In 2004, the factory processed 660,000 dan (33,000 tons) of tobacco leaves, and exported 3,100 tons of strips, earning nearly 4 million U.S. dollars in foreign trade. Enditem