WENZHOU, China, June 26, 2020
/PRNewswire/ -- ZK International Group Co.,
Ltd. (ZKIN) ("ZK International" or the "Company"), a
designer, engineer, manufacturer, and supplier of patented
high-performance stainless steel and carbon steel pipe products
primarily used for water and gas supplies, today announced the
following corporate updates:
Manufacturing Goes Full Steam Ahead Post the
Pandemic
As the COVID-19 swept across China starting from mid-January, dramatic
measures were taken on a massive scale to force residents to remain
indoors. These measures included government-mandated factory
shutdowns until early March. As a result, we have experienced
longer than usual shutdowns that spanned much of the month of
February due to Chinese New Year holidays and subsequently COVID-19
induced government mandated lockdown order.
While the COVID-19 pandemic forced longer than usual factory
shutdowns after the Chinese New Year holidays, which in turn caused
increased backlog of orders, our factories resumed normal
production in early March and has been running at full capacity
since then.
As we look back today, with the easing of the backlog following
more than 3 months of manufacturing running on full capacity, we
were able to smooth out the disruption in production and product
workflow caused by the COVID-19 pandemic.
To help local communities fight against the pandemic, we are
proud to supply piping infrastructure for the field hospitals
designated by the Wenzhou local authority to officially treat
patients with pneumonia infected by the COVID-19. The hospitals
were completed by the end of February with a full capacity of 800
beds.
The Dianshi Partnership Gives Us Quick Access to the Hunan
Market
In April, we entered into a strategic partnership agreement with
Hunan Dianshi Decoration Design and Engineering Co. Ltd.
("Dianshi"), one of the leading home improvement and interior
design chains in Hunan Province
with approximately 3,000 employees. This Dianshi Partnership gave
us a unique leverage to quickly expand our sales network into the
65 design centers and studios in 30 cities in China that are currently owned by Dianshi.
Leveraging Dianshi's strong design capability and ZK
International's high-performance stainless steel water pipes and
fittings supplies, the Dianshi Partnership allows two parties to
team up in providing best-in-class home improvement and interior
design solutions in 30 cities with the primary focus in the
Hunan market. As a strategic
partner and designated preferred vendor of water pipes and fittings
for Dianshi, we view the Dianshi Partnership as potentially a
springboard for ZK International to penetrate the growing
residential real estate market across China, especially Hunan Province.
The Huaye Partnership to Bring Additional Manufacturing
Capacity and Access to the North Eastern China Market
Earlier this month, we entered into an Exclusive Supplying and
Distribution Framework Agreement with Shandong Huaye Group
("Huaye"), a leading structural and fencing piping products
manufacturer and suppliers in China. The Huaye Agreement covers Huaye's
ongoing production line and machine upgrades (the "Upgrades') as
well as designating Huaye as the Company's strategic OEM
manufacturer and distributor.
The Upgrades, with Huaye's plan to allocate a total budget of
RMB350 million (approximately
$49.7 million), are now underway at
Huaye's existing 120,000 square meters facility in Mengyin County,
Shandong Province. ZK
International is dispatching experienced engineers in support of
the ongoing Upgrades which are expected to be completed by
September 2020. Upon completion of
the Upgrades, Huaye will become a designated OEM manufacturer and
distributor of the full suite of ZK International's patented
high-performance stainless steel and carbon steel piping
products.
Based on the current schedule for the Upgrades, we expect the
Huaya Partnership to increase our total production output by up to
RMB40 million (approximately
$5.6 million) in calendar year 2020,
significantly ease our production capacity bottleneck and reduce
our product delivery time.
For over 18 years and with 500 distributors, Huaye has
established itself as one of the leading manufacturers and
suppliers of stainless steel structural and fencing piping products
in the Northern and Eastern regions of China, particularly in Shandong Province. With complementary product
portfolios and sales network, we have high hopes on the Huaye
Partnership and expect it to bring us not only additional
manufacturing capacity but also speedy access to the North Eastern
China market where we have limited presence.
Due to its price advantage, PPR pipe currently has higher market
share than stainless steel pipe in North Eastern region of
China. However, PPR pipes has high
maintenance cost as a result of its significantly shorter life span
compared to stainless steel pipes. Additionally, enhanced consumer
health awareness helps stainless steel pipe rapidly gain larger
market share. Currently we generate small percentage of revenues
from North Eastern China region; leveraging Huaye's extensive sales
channel, we anticipate that this region will become the fastest
growing market for the coming years.
New Corporate Video
The Company also released a corporate video (the "Video"),
highlighting its manufacturing facilities, and its mission and
values. The Video can be accessed through the Company's website at
https://www.zkinternationalgroup.com/news-media/media/media/2787/zk-corporate-video.
Chairman's Comments
"For over 20 years and still counting, ZK has been always on a
mission to enable clean water and safe gas for municipalities and
communities with its high-quality, high-performance stainless steel
and carbon steel pipe and fitting solutions. Looking ahead, we
expect the macro headwinds caused by the COVID-19 pandemic to
continue deep into the second half of 2020. However, we also see
tremendous opportunities ahead of us. With strong order book,
additional production capacity and expanded geographical outreach
brought by the Huaye partnership, we are increasingly optimistic
about our long-term prospects. Northern
China market is our next strategic market as a corporate
strategy for the second," commented Jiancong Huang, Chairman and Chief Executive
Officer of ZK International.
About ZK International Group Co., Ltd.
ZK International Group Co., Ltd. is a China-based designer,
engineer, manufacturer, and supplier of patented high-performance
stainless steel and carbon steel pipe products that require
sophisticated water or gas pipeline systems. The Company owns 33
patents, 21 trademarks, 2 Technical Achievement Awards, and 10
National and Industry Standard Awards. ZK International is Quality
Management System Certified (ISO9001), Environmental Management
System Certified (ISO1401), and a National Industrial Stainless
Steel Production Licensee that is focused on supplying steel piping
for the multi-billion dollar industries of Gas and Water sectors.
ZK has supplied stainless steel pipelines for over 2,000
projects, including the Beijing National Airport, the "Water Cube",
and "Bird's Nest", which were venues for the 2008 Beijing
Olympics. Emphasizing superior properties and durability of
its steel piping, ZK International is providing a solution for the
delivery of high quality, highly sustainable, environmentally sound
drinkable water not only to the China market but also to
international markets such as Europe, East Asia,
and Southeast Asia.
For more information please
visit www.ZKInternationalGroup.com. Additionally,
please follow the Company
on Twitter, Facebook, YouTube,
and Weibo. For further information on the Company's SEC
filings please visit www.sec.gov.
Safe Harbor Statement
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," "could," "estimate" or "continue" or the
negative or other variations thereof or comparable terminology are
intended to identify forward-looking statements. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances are
forward-looking statements. These forward-looking statements are
not guarantee of future performance and are subject to certain
risks, uncertainties, and assumptions that are difficult to predict
and many of which are beyond the control of ZK International.
Actual results may differ from those projected in the
forward-looking statements due to risks and uncertainties, as well
as other risk factors that are included in the Company's filings
with the U.S. Securities and Exchange Commission. Although ZK
International believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in forward-looking statements will be
realized. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion
of such information should not be regarded as a representation by
ZK International or any other person that their objectives or plans
will be achieved. ZK International does not undertake any
obligation to revise the forward-looking statements contained
herein to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
Investor Contact:
Tony Tian, CFA
Weitian Group LLC
Phone: +1 (732) 910-9692
Email: ttian@weitianco.com
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SOURCE ZK International Group Co., Ltd.