The assets of the leased equipment include the production of an ion-exchange membrane caustic soda plant with an annual output of 120,000 tons, and the book value of the plant, equipment, land and equipment assets, including related auxiliary assets, is RMB 350,522,200 and the book value of the housing is RMB 32,911,200 and land area of ​​69,000 square meters.
According to the company's unified plan, Weifang Yaxing Chemical Co., Ltd. leased the above equipment assets to the group company. First, Yaxing Group can use the caustic soda produced by the plant to carry out rational scheduling and promote the production of hydrazine hydrate. We will use the capacity of equipment assets to tap the potential of assets, and at the same time, reduce the related transactions between the company and Yaxing Group's holding subsidiaries. Second, in the case of repeated construction of China's chlor-alkali industry and a serious overcapacity, it will be more conducive to the company's flexible approach. The strategic partners that choose raw material supply will, through mutual benefit, effectively reduce the production cost of the leading product CPE; help highlight the market competitiveness of the leading product and greatly enhance the profitability of the company.
After the Yaxing Group leases the assets of the above-mentioned caustic soda plant, it will provide Weifang Yaxing Chemical Co., Ltd. with caustic soda and liquid chlorine required for its production and operation at a fair price in accordance with changes in the market. After the caustic soda plant is leased, the company will establish a certain dependence on Yaxing Group on the supply of raw materials. For this purpose, Yaxing Group will enter into separate agreements with the company for daily related-party transactions to ensure that it will supply the required chlorine and caustic soda to the company in a priority manner, and ensure the company's daily production and operation to achieve better business results.
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