Feb 1 2011
General Steel Holdings, Inc. (“General Steel” or the “Company”) (NYSE: GSI), one of China’s leading non-state-owned producers of steel products and aggregators of domestic steel companies, today announced that it will test run two newly constructed 1,280 cubic meter blast furnaces, two 120 metric ton converters and one 400 square meter sintering machine at its Longmen Joint Venture.
General Steel will have the opportunity to sell and collect revenue from the crude steel produced during the test run of the new equipment.
At their designed efficiency levels, the new equipment has the potential to increase production capacity for the Company by three million metric tons of crude steel per year.
“We’re pleased to bring the new state-of-the-art equipment online, as it marks a milestone for us in terms of the expansion of our production capacity,” stated General Steel Chairman and CEO Henry Yu. “We have successfully transitioned to new state-of-the-art equipment which meets governmental industry standards. The new equipment will reduce our costs and improve our profitability, and the increased production capacity will place us in an advantageous position as we strive to meet the increasing demand for our steel products in China’s Western regions.”
The construction of the new equipment was funded by the Shaanxi Iron and Steel Group (“Shaanxi Group”). General Steel is currently in negotiations with Shaanxi Group to enter into a lease agreement whereby General Steel will lease the new equipment. During this test run period, General Steel will be able to use the equipment to produce and deliver products to its customers. It is anticipated that this test run period will continue until a lease agreement between Shaanxi Group and General Steel is finalized.