BEIJING, Sept. 11, 2012 /PRNewswire-FirstCall/ -- 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 has completed the first stage of a series of benchmarking programs, which have resulted in efficiency improvements at its Longmen Joint Venture ("Longmen JV"), the Company's principal manufacturing facility. The Company expects these measures, as well as other planned improvements, to reduce its manufacturing costs per ton of crude steel produced.
"As we continue to scale production at Longmen JV, we have undertaken a number of initiatives to better address volatility in steel and raw materials pricing to reduce our per-ton manufacturing expenses, drive margin expansion and improve our bottom-line performance," said General Steel Chairman and Chief Executive Officer, Mr. Henry Yu. "Strong customer demand in Western China, coupled with the ongoing realization of benefits from our unified management agreement with Shaanxi Steel and Shaanxi Coal, position us well for growth over the longer-term. The successful completion of this initial phase of our benchmarking program is expected to drive interim efficiency, making us less susceptible to potential ASP pressure, and helping accelerate our path to sustained profitability."
Following an in-depth benchmarking analysis of its operations and those of its peers, Longmen JV implemented a series of initiatives aimed at optimizing production equipment to maximize output, reduce operational costs and leverage economies of scale. The optimization initiatives undertaken by Longmen JV in 2012 to-date include:
- Improvements in raw material procurement capabilities, reducing the cost of both iron ore and coke;
- Tight raw materials purchasing controls and inventory management;
- Optimization of manufacturing techniques and production management systems at each step in the steelmaking process; and,
- Enhancements to certain non-manufacturing capabilities such as quality control, safety and finance.
"We are particularly encouraged by the recently announced National Development and Reform Commission approvals of a total of 60 new infrastructure projects, which involve investment of over US$150 billion. These projects include the construction of 25 rail and subway lines, and development of another 13 roads. Many of these projects are situated in or near Shaanxi Province, which bodes well for our Longmen JV subsidiary." Mr. Yu added, "We remain confident in our ability to execute on our primary strategic objectives and are excited about what the future holds for General Steel as we continue to grow our internal capabilities and expand our reach through partnerships with leading State-owned Enterprises. We believe that these efforts, combined with future initiatives and an improving macro environment, will help improve visibility and give General Steel greater control over the changing market landscape."
About General Steel Holdings, Inc.
General Steel Holdings, Inc., (NYSE: GSI), headquartered in Beijing, China, operates a diverse portfolio of Chinese steel companies. With 7 million metric tons of crude steel production capacity under management, its companies serve various industries and produce a variety of steel products including rebar, high-speed wire and spiral-weld pipe. General Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality. For more information, please visit www.gshi-steel.com.
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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.
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SOURCE General Steel Holdings, Inc.