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Intervest JOINT VENTURES
Integrated Information International (China) Joint Venture
INTERVEST GROUP, INC., operates a telecommunications pager network as a legal entity in accordance with the laws of the Peoples Republic of China (PRC). The Company currently owns 90% of a Joint Venture, which includes 48 pager stations and substations. In this regard, Chinese and foreign investment is being used to enhance economic cooperation and technical exchanges; to develop and improve services; to improve competitive position in the world market; to improve management and technology capabilities and to ensure satisfactory economic results and benefits to all investors. The world's two largest paging markets are China and the United States. Economic Management Consultants, Inc., an independent telecommunications company has estimated that there are approximately 140 million pagers in the Asia Pacific marketplace, making this region the fastest growing and largest paging markets in the world. According to their report, 75% to 85% of the pager sales in the Asia Pacific market will come from China, South Korea and Japan. The current pager system providers in China are primarily State or Army-owned and operated. Much of the equipment is old and unable to keep pace with user demands. The State has initiated a program to phase itself and the Army out of the business of providing telecommunications services in an effort to establish a network throughout China that is efficient and cost competitive.
The worldwide pager market, penetration industry accepted standard, is 30% of the population base. On average, the current number of pager subscribers in the larger cities and surrounding urban areas in China is less than 10%. The primary reason that pager sales will continue its dramatic upward sales curve, is due to the explosive escalating demand, yet cost prohibitive nature of telephones and cellular phones.
The Company has chosen the Capital of Liaoning Province, Shenyang as one of the primary target markets for pager communications. The Province is 145,700 square kilometers with a population of 41.16 million. Shenyang is China's fifth largest city with a population of 6.67 million and an additional 5.68 million living in urban areas. Shenyang is the communication, commerce, science and cultural center in northeast China. The current number of pager subscribers in the Liaoning Province is 3.18 million (9% of the population). The Company's market analysis concluded that the current net potential number of new pager users in Liaoning Province is a conservative 10.42 million. Assuming the least expensive local numeric service, 10.42 million new subscribers in the Liaoning Province represents a $1.1 billion market annually. This is a similar situation that in 1996 led North Coast Mobil Communications to pay $631 million in open auction for a single license to service metro New York's population of 18 million. The Liaoning Province is more than twice this size. The Company projects that it will capture 1.7 million users over five years in the Liaoning Province. Assuming that only the least expensive local service is provided, this translates into a $250 million market annually with inflation.
Nanyang (Shantou) Electric Cable (FTY) Co. Ltd., Joint Venture
Background
Located in Shantou Special Economic Zone of the Guangdong Province, Shantou Nanyang Electric Cable Industry Co., Ltd., (Nanyang Cable) began operations in 1980. It is among the three largest companies specializing in the production of low voltage (below 6kVA) electric wire and cable. Additionally, the Company's products such as flame-retardant cable and fire-resistant cable were tested and approved by Guangdong Public and Security and Fire Fighting Organization and recommended as reliable products which are ISO-9002 Certified. The Nanyang Cable factory covers an area of 30,000 square meters with an annual production capacity of USD $36.7 million. The annual production in 1999 was USD $24.3 million. The Company has an estimated market value of $3,627,569 with INTERVEST GROUP, LTD., acquiring a 40% interest.
Management Team
Mr. Zhong Zhong Nan is the Founder and past President of Guangdong Nanyang Cable Manufacturing since 1983. His blend of management skills and extensive experience allow him to understand the research, production of wire and cable. In 1994, he presided over developing "Fire Resistant PVC Insulated Cable" NH-VV 0.61lkv" which was granted the Gold Award as Outstanding New Product of Touch-Light-Champaign by Guangdong Province Science & Technology Committee in 1995. He also presided over developing XLPE Insulated Power Cable in 1999 which was-tested and approved by Guangdong Electric & Mechanic Industry Bureau and achieved ISO-9002 Quality System Accreditation. Mr. Zhong was elected Outstanding Entrepreneur in 1997, 1998 and 1999 of Shantou City. He is also the Director of China Wire & Cable, Industry Association, Vice General Secretary of the Electronic Institution of Guangdong and Standing Committee of the Shantou Labor Union.
Product
The Nanyang (Shantou) Electric Cable (FTY) Company, Ltd., manufactures and markets medium and low voltage wire and cable products. The cable products such as flame-retardant cable and fire-resistant cable, were tested and approved by Guangdong Public and Security and Fire Fighting
Organization and recommended as reliable products which are ISO-9002 Certified.
Awards and Recommendations
* Quality System Certificate, issued by Beijing 9000 Certificate Center for Quality System, 1998.
* Certificate of Outstanding Privately Owned Enterprise, issued by Shantou City People's Government, 1998.
* Certificate of International Standard issued by National Accreditation of Certification Bodies, 1998.
* High-Tech Enterprise Certificate issued by Guangdong Science-Tech Committee, 1997.
* Certificate of Recommended Products honored by Shantou City Economic Committee, 1998.
Investment
The Company has entered into a Joint Venture Agreement Nanyang (Shantou) Electric Cable (FTY) Company, Ltd. Nanyang (Shantou) Electric Cable has an estimated value of $3,627,569 in U.S. Dollars. The Joint Venture is organized as a Limited Liability Company. INTERVEST GROUP, INC. owns a 40% interest in this venture.
Guangdong Wanshitong Communication Co., Ltd., Joint Venture
Background
Guangdong Wanshitong Communication Company, LTD is located at Yangweishan Industry Zone, Puning City, Guangdong P.R. China. A privately held company in Hong Kong duly organized under the laws of and registered in the People's Republic of China.
Management Team
Mr. Chen Wan Shi has been the General Manager of Wanshitong Communication Company, Ltd., since 1995 and is a member of the Political Negotiation Committee of Puning City and Vice President of the Science-Technology Association. His work experience includes being Manager of an Import & Export Corporation of Puning City and Business Manager of a Foreign Economy Service Company.
Product
The Guangdong Wanshitong Communication Company, Ltd., manufactures, designs and markets telecommunication products to include telephones.
Investment
The Company has entered into a joint venture with Guangdong Wanshitong Communication Company, Ltd. Guangdong Wanshitong Communication Company, Ltd., has an estimated value of $4,500,000 in U.S. Dollars. The joint venture will be organized as a Limited Liability Company wherein the Company owns a 40% interest.
Hua Lian Xun (Shenzhen) Commuincation Co., Ltd., Joint Venture
The Company manufactures, designs and markets electronic products, telecommunications equipment and network - products. The Company is a fiber-optic auto real-time supervision (FOARTS) solution provider, offering operators the ability to detect malfunctions in fiber-optic operators within the utility industry. FOARTS's enables utility fiber optic operators such as China Telecom and China Unicorn to retain an on-line look electronically at the change of the transmit characteristics, detecting the choke points of the malfunction and to prevent and reduce effectively, the breakdown of the fiber-optic transition. Capitalization focuses on the manufacturing of telecommunications routing equipment. The Company has an estimated market value of USD $1,800,000 with INTERVEST GROUP, LTD., owns a 40% interest.
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