Fujian Technological Transformation Fund Launched over RMB 2 billion and IB Takes Action to Serve Supply-side Reform

It is reported that “Investment Fund for Fujian Enterprise Technology Upgrade (limited partnership)” (hereinafter called Fujian Technological Transformation Fund) initiated by IB has launched 23 projects and investment of RMB 2.185 billion within a half year, saving RMB 66 million for enterprises with Technological Transformation and effectively reducing their financing costs.

It is introduced that the projects launched by this fund since the beginning of this year has an average scale of investment of RMB 95 million and an average term of 3.4 years, mainly in organic food, mechanical manufacturing, electronic information, textile and petrochemical industry, acquiring full coverage of technological transformation projects of cities with districts (not including Xiamen) in Fujian. It effectively supported a batch of key provincial or municipal projects of technological transformation, such as project of producing 14.7 billion kilowatt of new energy lithium ion power per year and building production line of energy storage battery of Contemporary Amperex Technology, project of producing fitness equipment including electric treadmills of Shuhua Health Industry, “filling the gap(lightweight of automobile) program of high precision aluminum slab band project” of Chalco Ruimin, and “intelligent transformation project of alkaline manganese battery production equipment” of Nanfu Battery, becoming a new engine for Fujian province to back transformation and upgrading of enterprises through financial innovations.

On July 8, 2016, Fujian Technological Transformation Fund was officially registered in Mawei FTZ of Fuzhou city with an initial scale of RMB 8 billion and a valid term of 10 years. Industrial Investment (Pingtan) Capital Management Co., Ltd. offers market-oriented and professional active management service for this fund and supports technological transformation and upgrading of enterprises through investments of equity and debt. The main investors are private companies or listed companies in Fujian province.

Fujian Sanming Textile Co., Ltd., an excellent private company, has an annual total industrial output of more than RMB 0.4 billion and is an influential one in textile industry. On account of a growing number of orders in recent years, the company planned to expand its plant and make technological upgrading with the purpose of bolstering production and boosting efficiency. However, as an old state-owned restructured enterprise in Sanming city, Sanming Textile is located in densely populated Meilie District where problems such as environment and land restrict its development. On learning that this company's needs of technological transformation as well as inter-city relocation and expansion, IB actively offered technological transformation fund of RMB 100 million with a time limit of three years and a low interest rate of 3%.

“It cut our financial cost considerably and dispelled our future worries. A flexible repaying plan was made to our benefit based on our production and operation.” The head of the company said.

It is learned that through Fujian Technological Transformation Fund, qualified enterprises with key technological transformation programs on the list of Fujian Provincial Economic and Information Technology Commission can get funds over a long time only by paying 3% of financing cost of low creditor’s right, far lower than standard benchmark interest rate of medium and long-term loan for enterprises. Meanwhile, Technological Transformation Fund can make equity investment for enterprises so as to increase their capital, optimize their asset liability structure and give strong financial impetus to Fujian's industrial transformation and upgrading and supply-side structural reform.

Relevant authorities predicated that by 2020, Fujian’s investment in industrial and technological transformation will see an annual growth of over 15%; it will accumulatively invest over RMB 3 trillion; investment in industrial and technological transformation will account for more than 55% of industrial investment, added value of high-tech industries will occupy 16% of GDP and added value of strategic emerging industries will occupy 15% of GDP; Fujian Technological Transformation Fund will contribute more to this process.