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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, plant and equipment

(6) Property, plant and equipment

As of December 31, 2018 and 2017, property, plant and equipment consisted of the following:

		December 31,				December 31,
		2018				2017
Property, Plant, and Equipment:
Land use rights		$	11,881,571			$	12,479,814
Building and improvements			94,127,348				98,866,703
Machinery and equipment			147,383,943				118,670,578
Vehicles			597,484				593,265
Construction in progress			5,005,041				36,077,498
Totals			258,995,387				266,687,858
Less: accumulated depreciation and amortization			(91,165,671	)			(77,299,149	)
Property, Plant and Equipment, net		$	167,829,716			$	189,388,709

As of December 31, 2018 and December 31, 2017, land use rights represented two parcel of state-owned lands located in Xushui District of Hebei Province in China, with lease terms of 50 years expiring from 2061 to 2066.

Construction in progress as of December 31, 2017 mainly represents payments for the new 15,000 tonnes per year tissue paper manufacturing equipment PM8, the tissue paper workshops and general infrastructure and administrative facilities in the Wei County Industrial Park. In December 2018, the Company announced commercial launch of PM8 and the related cost of construction in progress were capitalized as machinery and equipment costs.

As of December 31, 2018 and 2017, certain property, plant and equipment of Dongfang Paper with net values of $5,782,640 and $7,963,285, respectively, have been pledged pursuant to a long-term loan from credit union of Dongfang Paper. Land use right of Dongfang Paper with net values of $5,990,586 and $6,437,419 as of December 31, 2018 and 2017 were pledged for the bank loan from Bank of Industrial & Commercial Bank of China. In addition, plant and equipment of Baoding Shengde with net values of $12,939,899 and $nil as of December 31, 2018 and 2017, respectively, and another land use right with net value of $4,762,300 and $nil as of December 31, 2018 and 2017 were pledged for the bank loan from Bank of Cangzhou. See “Short-term bank loans” under Note (7), Loans Payable, for details of the transaction and asset collaterals.

Depreciation and amortization of property, plant and equipment was $14,290,919 and $14,633,780 for the years ended December 31, 2018 and 2017, respectively. Impairment loss was recorded for certain inactive production line in the amount of $3,894,461 and $2,291,027 for the years ended December 31, 2018 and 2017, respectively.