Note 8 – Construction-in-Progress
The construction projects in progress are to build facilities to expand production capacity in Lianyungang, Donggang, Rongcheng and Wujiang areas. Construction costs mainly represent construction expenditures and equipment costs not yet in service. The Company completed three construction projects totaling $11.7 million (RMB 72.15 million) by the end of May 2013 after these projects passed the inspection conducted by local the government agencies. In December 31, 2013, the Company started to construct a new chemical and fuel oil blending project in Lianyungang city after the Company obtained a land use right in October 2013. Total estimated contract price for this new project is approximately $41 million (or RMB 250 million). The Company prepaid $17 million (equivalent to RMB 100 million) to a contractor to start the project in December 2013.
The Company’s construction-in-progress is as follows:
| | | December 31,
2013 | | December 31,
2012 | |
| Berth and berth improvements | | $ | 698,812 | | $ | 529,556 | |
| Oil blending and storage tanks | | | - | | | 12,330,639 | |
| Oil blending and chemical project at Lianyungang | | | 16,418,320 | | | - | |
| Capitalized interest | | | 664,030 | | | - | |
| Total | | $ | 17,781,162 | | $ | 12,860,195 | |
