BEIJING, March 11, 2013 /PRNewswire/ -- General Steel
Holdings, Inc. ("General Steel" or the "Company") (NYSE: GSI), a
leading non-state-owned steel producer in China, today announced its principal
manufacturing facility, Shaanxi Longmen Iron and Steel Co., Ltd.
("Longmen Joint Venture") has begun construction of an additional
continuous advanced-rebar-rolling production line.
The additional production line is expected to begin operations
in the fourth quarter of 2013 and will expand Longmen Joint
Venture's total annual continuous rebar rolling capacity by 1.2
million metric tons ("MMT"). With the continuous rolling
capacity at the same facility in which steel billet is produced,
Longmen Joint Venture expects to further eliminate intermediate
transportation, re-heating costs, and outsourced-processing cost,
thereby reducing overall unit production cost by up to RMB 70 per metric ton for the 1.2 MMT rebar
rolling line. Once construction of the new rebar lines is
completed, Longmen Joint Venture will have a total continuous
rolling capacity of 4.3 MMT, including 3.3 MMT of rebar and 1.0 MMT
of high-speed wire.
"The construction of additional rebar capacity to further reduce
unit production cost is an extension of our operating philosophy
adopted in 2012," said Henry Yu,
Chairman and Chief Executive Officer of General Steel. "In
reviewing our 2011 financial results, we learned that prices for
raw materials did not decrease as fast as prices for steel, these
dynamics had pressured gross margin for the entire industry, and
along with the overall industry, we also incurred losses for the
fourth quarter of 2011.
"Although 2011 profitability was disappointing, demand for steel
products in General Steel's core Western
China market remained solid, as our 2011 sales volume
increased by 2.3 million metric tons, or 58.1% year-over-year, to
6.2 million metric tons. We believe that our geographic location in
China's western region continues
to provide us strong competitive advantages, and we have set
sustainable growth and profitability as our top priority. We are
glad to see an improving trend for China's steel industry in late 2012, which
provides us with cautious optimism for 2013," Mr. Yu concluded.
John Chen, Chief Financial
Officer of General Steel, added, "Despite the improving but still
challenging environment, we believe it is essential to grow our
business organically with a focus on improving production
efficiencies and increasing operating leverage. To leverage the
economic of scale, we reallocated two rolling lines, including one
1.2 MMT rebar line and one 1 MMT high-speed wire line, from our
Maoming Hengda facility to Longmen Joint Venture. These two lines
have been in commercial production in 2012 and we expect unit costs
saving of up to RMB 40 per metric ton
for each line. In addition, in September
2012, we started construction of another 0.9 MMT1
rebar rolling line at Longmen Joint Venture, with anticipated unit
costs saving of up to RMB 100 per
metric ton. We believe by continuous rolling rebar and high-speed
wire where steel billet is produced, the eliminated intermediate
production costs should incrementally contribute to our gross
margin recovery."
1.
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Please refer to the
press release the Company issued on September 19, 2012, with the
title of "General Steel Begins Construction on Advanced Rebar
Production Line at Longmen Joint Venture".
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About General Steel Holdings, Inc.
General Steel Holdings, Inc., headquartered in Beijing, China, produces a variety of steel
products including rebar, high-speed wire and spiral-weld pipe. The
Company has operations in China's
Shaanxi and Guangdong provinces, Inner Mongolia Autonomous
Region and Tianjin
municipalitywith seven million metric tons of crude steel
production capacity under management. For more information, please
visit www.gshi-steel.com.
To be added to the General Steel email list to receive Company
news, or to request a hard copy of the Company's Annual Report on
Form 10-K, please send your request to
generalsteel@asiabridgegroup.com.
Forward-Looking Statements
This press release may contain certain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's
current expectations or beliefs about future events and financial,
political and social trends and assumptions it has made based on
information currently available to it. The Company cannot assure
that any expectations, forecasts or assumptions made by management
in preparing these forward-looking statements will prove accurate,
or that any projections will be realized. Actual results could
differ materially from those projected in the forward-looking
statements as a result of inaccurate assumptions or a number of
risks and uncertainties. These risks and uncertainties are set
forth in the Company's filings under the Securities Act of 1933 and
the Securities Exchange Act of 1934 under "Risk Factors" and
elsewhere, and include: (a) those risks and uncertainties related
to general economic conditions in China, including regulatory factors that may
affect such economic conditions; (b) whether the Company is able to
manage its planned growth efficiently and operate profitable
operations, including whether its management will be able to
identify, hire, train, retain, motivate and manage required
personnel or that management will be able to successfully manage
and exploit existing and potential market opportunities; (c)
whether the Company is able to generate sufficient revenues or
obtain financing to sustain and grow its operations; (d) whether
the Company is able to successfully fulfill our primary
requirements for cash; and (e) other risks, including those
disclosed in the Company's Form 10-K, filed with the SEC.
Forward-looking statements contained herein speak only as of
the date of this release. The Company does not undertake any
obligation to update or revise publicly any forward-looking
statements, whether to reflect new information, future events or
otherwise.
Contact Us
General Steel Holdings, Inc.
In China:
Jenny Wang
Tel: +86-10-5775-7691
Email: jenny.wang@gshi-steel.com
In the US:
Joyce Sung
Tel: +1-347-534-1435
Email: joyce.sung@gshi-steel.com
Asia Bridge Capital Limited
Carene Toh
Tel: +1-888-957-3362
Email: generalsteel@asiabridgegroup.com
SOURCE General Steel Holdings, Inc.