By Jane Macartney

LHASA, China, Oct 2 (Reuter) - Only the scent of juniper fills the air, no sound but the sighing of the wind rustles the silence at the newly listed Tibet Shendi Corporation nestling at the foot of a 15th-century Buddhist monastery.

Tibet Shendi is the first Tibet-based industrial share to be issued in China in a move that local officials and company executives hailed as a breakthrough for one of China's poorest, most backward and inaccessible regions.

Recently, it raised 57 million yuan ($6.87 million) from issuing 15 million domestic renminbi currency A shares for local buyers on the Shanghai Stock Exchange.

The idea to produce bottled mineral water from one of the least polluted mountain regions on earth was imported by a group of streetwise businessmen from the neighbouring Chinese province of Sichuan.

"We feel a great affection for Tibet," said Gao Zhilang, the Sichuanese general manager of the Tibet Natural Mineral Water Co that is one of the major shareholders in the firm. "We wanted to set up a share-holding company."

"We want to produce some of the best mineral water in the world," said vice-general manager Li Zhongxian.

The attraction of preferential tax policies offered by the government of China's Tibet Autonomous Region was another important lure, company officials said. Income tax is 15 percent in Tibet compared with 33 percent elsewhere in China.

Investors are also convinced of the strength of the firm because Beijing is almost certain to maintain its support and preferential policies to this backward region, officials said.

Another factor in this listing of a company is its extraordinary location, analysts said.

They said the firm would almost certainly have failed to win the necessary approval from the China Securities Regulatory Commission (CSRC) if it were based in the bustling boomtowns of Shanghai or Guangzhou.

The CSRC has set a quota system for the number of companies that each province can list, and poor, remote Tibet had been unable even to meet its limit of two a year. In neighbouring Sichuan province, dozens of firms vie for a public listing.

Tibet Shendi, or Tibet Holy Land, combines five major shareholders with Tibet Natural Mineral Water and the Sichuan Economic Aid Co each holding 38.9 percent or 19 million yuan, while Tibet International Sports Travel holds 10 million yuan and the Tibet Investment and Trust Co and the local Xinong Group each hold three million yuan.

The plant lies on the outskirts of Lhasa, sandwiched between the 15th century Sera or Merciful Hail monastery and Lhasa's main prison.

Its water bubbles up from a spring that flows 480 metres (1,570 ft) beneath the 5,500 metre (18,000 ft) Lada mountain to the north of Lhasa.

Tibet Shendi taps the spring from steel pipes laid underground from a locked pagoda-style building in a corner of the factory compound and surrounded by tiny fragrant juniper shrubs.

"For reasons of hygiene and security we always keep this building locked," said Gao.

"Government regulations do not allow you to set up a mineral water plant within four km (2.4 miles) of pollution," he said.

"But that is not the slightest problem in Lhasa where there is no pollution at all," he smiled, with a wave at the cloudless blue sky overhead and the crystal clear air of the city that stands 3,607 metres (11,830 ft) above sea level.

The plant appears to be a model of cleanliness, with a laboratory to make daily checks of the water for bacteria and the bottling carried out in a sealed room containing about $2 million of imported equipment and production lines.

It currently bottles about 35 tonnes of water a day and plans to use about 16 million yuan of the capital raised through its share issue to double annual capacity to 40,000 tonnes next year.

About 18 million yuan will be used to build a new Himalaya Hotel for foreign tourists while the rest will be invested in a commercial complex.

Tibet Holy Land hopes ultimately to promote its mineral water, currently bottled under the "Himalaya" brand, as a competitor on world markets, but officials say turning a profit will be difficult.

The water must be transported by road more than 1,000 km (625 miles) over the Tibetan plateau to Golmud, from where it is distributed by train to the main cities of China.

Transport expenses boost costs, also swollen by having to bring in the bottles from the Sichuan capital, Chengdu, because bad weather swept away the main road last year preventing the bottle-making line from being installed in Lhasa.

Company officials were frank about the difficulties of production on the roof of the world, but voiced optimism.

"Our water is of the first quality, and there are few others that can compete," said Li.

More profits may be earned from the tourism section of the company because Tibet International Sports Travel is the only agent with the rights to take tourists to Mount Everest, the world's tallest mountain, and to the newly designated nature reserve at its foot.

The company's Himalaya Hotel ranks fifth in Tibet in terms of visitors and hopes for an expansion of business with tourism growing steadily each year. Nearly 40,000 foreign tourists visited Tibet in 1995 and officials hope to boost that number to 60,000 a year by the end of the century.

Tibet Holy Land posted a net profit of 1.922 million yuan on turnover of 9.75 million yuan in the first half of 1996, against net profit of 1.562 million yuan on turnover of 14.45 million in all of 1995.

Officials said they were aiming for net profit of 3.5 million yuan for 1996 and hoped to boost that to seven million yuan in 1997 after the planned expansions and investments.

($1 = 8.3 yuan)