Zongshen Group and Family Rosa Entered into Letter of Intent to Purchase Land in Brazil for Motorcycle Manufacturing Plant
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11 a.m., May 29 Beijing time, Zuo Zongshen, President of Zongshen Industrial Group Co., Ltd. and Claudio, representative of Family Rosa in Brazil, entered into a Letter of Intent for Joint Investment on a yacht on the Amazon River, intending to purchase land in Brazil with joint investment to build a plant manufacturing motorcycles selling to Brazil and the whole Latin America.
According to the investigation in Brazilian market by Mr. Zuo, the price of Zongshen motorcycle in China is about RMB 3,000, but the motorcycle of the same quality costs RMB 15,000 in Brazil, and that does not include the financial fees for mortgage, which means, the retail price of the same quality motorcycle in Brazil is 4 to 5 times of China. Other costs and expenses there are certainly higher than in China, but the profit margin is still rather greater in comparison. At the same time, the Amazon river basin (covering over 2 million square kilometers in Brazil) brings a longer rainy season extending as long as half a year, providing great business opportunities for Zongshen’s simple outboard engine.
Both parties primarily agreed that each one of them would hold 50% shares of the future joint venture plant. The total investment should not be less than USD 40 million and, once the production capacity is in place, the annual output will be 200,000 motorcycles.
Both parties also agreed to discuss the execution of formal legal documents concerning joint venture in 60 days after the execution of Letter of Intent for Joint Investment. |
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发表日期：Wednesday, November 26, 2008 - 作者：zhu xiaolong
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