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[January 2008]
China Gengsheng Minerals Signs Significant Refractories Sales Contracts
China Gengsheng Minerals Inc (Gongyi, China), a leading manufacturer in China of heat-resistant and energy-saving industrial materials, has announced that it has signed new refractories supply contracts with Aoyu Iron & Steel Co Ltd and Xinjiang Bayi Iron & Steel Co, two prominent Chinese steel manufacturers.
Aoyu is the 38th largest steel manufacturer in China by capacity and one of the top steel makers in Hebei Province. According to the Hebei Metallurgical Industry Association, Hebei Province has been the No. 1 producer of steel among China's top seven steel-producing provinces for three years in a row. Aoyu specialises in the production of diversified steel and iron products. Aoyu's parent company, Aowei Group, is also known for its speciality in metallurgical technology as well as for its diverse range of operations from manufacturing steel and iron to international trade.
Xinjiang Bayi is a majority-owned subsidiary of the Baosteel Group, China's largest steel manufacturer by output and one of the most profitable steel enterprises in the world, with an annual production capacity of over 20 million metric tons. Xinjiang Bayi is the largest iron and steel company in China's Xinjiang Autonomous Region. It produced 2.84 million metric tons of crude steel last year and held over 75% of the market share in Xinjiang. The Baosteel Group plans to make use of Xinjiang Bayi's geographical location in China to further exploit the potential steel consumption in Asia.
"We are pleased to add Aoyu and Xinjiang Bayi as new customers," said Shunqing Zhang, Chairman, CEO and President of Gengsheng. "Aoyu and Xinjiang Bayi are both on the forefront of the campaign for cost-cutting and energy-saving in the Chinese steel industry. We believe that our refractory products are uniquely positioned to fulfill the growing needs of steel factories to produce more durable products with higher energy efficiency."
Gengsheng has agreed to supply one million metric tons of comprehensive refractories (predominantly monolithic refractories) for steel ladle linings to Aoyu and to provide Xinjiang Bayi with six million metric tons of refractory castables for troughs and runners in blast furnaces for the term of their respective contracts. The Aoyu agreement will expire on 25 December 2008 and the Xinjiang Bayi agreement will expire on 12 November 2008. Based on the company's projected output for the term of the contracts, it estimates the contracts to be worth US$1.3 million and US$400,000 in revenues, respectively.
ENDS