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Longhai Steel, Inc. (LGHS) Sees Itself as Being in the Best Place at the Best Time

If you’re a producer of steel wire and related products, there’s no better place in the world to be than China, the single biggest consumer of steel and steel wire in the world. And, in China, one of the best places to be is Hebei province, one of the largest steel manufacturing regions in China and close to Beijing. Hebei has all of the infrastructure in place, along with close proximity to distributors and end users.

The city of Xingtai, in Hebei, is the site of Longhai Steel, Inc., now one of China’s leading producers of high-quality steel wire, with an annual capacity of 1.5 million metric tons. Longhai’s wire goes directly to nearby manufacturers, where it is converted into an expanding list of products for the country’s construction, automotive, and infrastructure industries, with all its sales delivered in China:

• Screws
• Nails
• Wire mesh for fencing and reinforced concrete
• Wire rope
• Steel belted radial tires
• Welding rod

Longhai’s advanced production equipment, process technology, and its close proximity to distributors and end users provides it a clear competitive advantage. The company recently opened a second production line, upping overall capacity by 67% and expanding its product portfolio. Longhai has acquired land adjacent to the two existing plants for the future addition of a third production facility.

Longhai’s growth strategy is multi-faceted, including organic growth through careful capacity expansion, adding new products, improving operational efficiencies, and remaining a technological leader. The company also expects to capitalize on government actions that encourage industry consolidation by acquiring neighboring producers at attractive valuations. In addition, the ongoing economic development in Hebei province, and neighboring areas, along with the further buildout of tier 3-6 cities in China, represents a tremendous medium and long term opportunity for Longhai Steel.

For additional information, visit the company’s website at www.LonghaiSteelInc.com

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