Chinese sportswear company Exceed has entered an agreement to construct a manufacturing base in Ruichang city, Jiangxi Province.

Under the agreement, Exceed will purchase a 400,000 square metre parcel of land in Ruichang city for RMB198m (US$31.4m), subject to municipal and administrative approvals.

The production facility is expected to be completed by the end of 2013. Exceed plans to increase its internal manufacturing capacity and exert more control over the product development process, from setting up the supply chain of raw materials, moulds and supplementary materials, to in-house production and delivery.

The land is priced at RMB330,000 per Chinese acre, and the city will incur costs in relocating current residents, conducting environmental clean-up, surveys and rezoning the land before it is ready for development.

The company has made a RMB46.8m deposit, with the land set to be officially purchased at an auction that will take place sometime later in 2012, after the government settles with the existing residents on the land.