July 12 -- Zhejiang Jiaxin Silk Corporation (002404) intends to invest 300 million yuan in businesses related to mulberry plantations, reports Yicai.com, citing a company filing. Mulberry leaves are commonly fed to silkworms.

Jiaxin Silk signed a contract with Tongxin New Era Gardening to create a joint venture called Jiaxin New Era Sapling. The JV will be engaged in tree purchasing and sales, sapling market construction and related leasing services.

The new entity will have registered capital of 150 million yuan, and Jiaxin Silk will hold a 70-percent stake in it.

Silkworm cocoons can be collected four times per year, so its employees are idle during the non-harvesting period. The new company can improve its labor efficiency by allocating its employees to do purchase young mulberry trees and conduct related businesses when there are no cocoons to harvest.

Also, the JV will provide mulberry saplings to the company’s cocoon bases in Yunnan and Guangxi provinces, thus increasing its raw material supply.