PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2011

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	June 30,			December 31,
	2011			2010
Permit of land use	$	435,815		$	426,007
Building		2,358,525			2,305,445
Plant, machinery and equipment		6,036,483			5,734,222
Motor vehicle		142,950			139,733
Office equipment		127,691			124,817
Construction in progress		345,887			338,103
Total		9,447,351			9,068,327
Less: accumulated depreciation		(3,181,610	)		(2,695,840	)
Property and Equipment, net	$	6,265,741		$	6,372,487

Construction in progress consists of machinery and construction supplies that have been paid for, but are not yet completed and placed into production. Once the machinery is working or the facility is in use, it is moved into plant, machinery and equipment and depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Asset		Life - years
Permit of land use		40 - 70
Building		20 - 35
Plant, machinery and equipment		10
Motor vehicle		5 - 10
Office equipment		3-5

For the six months ended June 30, 2011 and 2010, depreciation expense was $419,253 and $388,668, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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