|By Marketwire .||
|July 13, 2012 04:15 PM EDT||
XINGTAI CITY, CHINA -- (Marketwire) -- 07/13/12 -- Longhai Steel Inc. ("Longhai of the Company") (OTCBB: LGHS), a producer of high-quality steel wire products in the People's Republic of China, today announced it commenced initial production of high quality steel wire in its second production facility at the end of the second quarter of 2012. The Company expects to ramp production of high quality steel wire to full capacity by the end of 2012.
The Company's 600,000 MT production facility, completed in the third quarter of 2011, is located in Hebei, China, the largest steel producing province in the country. The state-of-the-art facility has a high-speed production line capable of producing a wide variety of conventional and higher value steel wire. Longhai Steel sold all of the initial production to a major distributor in Hebei for domestic and export markets, which significantly reduces the transportation costs and inventory risks. The Company has also received positive feedback and indications of interest from other distributors regarding future orders.
"We are pleased with the smooth production ramp at our second facility," stated Steven Ross, Executive Vice President of Longhai Steel. "Since we commenced test production, we have met or exceeded all of our internal performance and production goals. We will complete testing by early August and commence volume production by the end of the third quarter. The addition of high quality steel wire from this facility will expand our customer base, diversify our end market exposure and boost our margins."
About Longhai Steel Inc.
Longhai Steel is a leading producer of high-quality steel wire in eastern China, with annual capacity of 1.5 million metric tons. Longhai's wire is manufactured into screws, nails, and wire mesh used for fencing and to reinforce concrete. Longhai recently expanded its production facility to include specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod. Demand is based on spending in the construction, automotive and infrastructure industries in China. Company website: www.longhaisteelinc.com.
Safe harbor statement
Certain statements in this news release are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "could," "estimates," "expect," "future," "intends," "may," "plans," "should," "will," and similar statements.
The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding China's economic growth, general industry conditions including local supply and price of wire, environmental risks, Longhai 's business or growth strategy, Longhai's ability to achieve the new facility's production expectation; Longhai's ability to develop and produce higher margin products that achieve market acceptance; the success of Longhai 's investments, risks, and uncertainties regarding fluctuations in earnings, its ability to sustain its previous levels of profitability including its ability to manage growth, intense competition, wage increases in China, its ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, its ability to successfully complete and integrate potential acquisitions, withdrawal of governmental financial incentives, political instability and regional conflicts, and legal restrictions on raising capital or acquiring companies outside China. Although Longhai believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements. Although these expectations and the factors influencing them will likely change, we are under no obligation to inform you if they do. These and additional risks that could affect Longhai's future operating and financial results are more fully described in its filings with the U.S. Securities and Exchange Commission. These filings are available at www.sec.gov.
Longhai may, from time to time, make additional written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q, and 8-K, in its annual report to shareholders, in news releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Longhai does not undertake to update any forward-looking statements that may be made from time to time by or on its behalf, except as required by law.
Longhai Steel Inc.
Steven Ross (English)
Cindy Han (English and Chinese)
MZ Group - North America
SVP, Natural Resources
MZ Group - North America
Senior Vice President