BEIJING, March 30, 2012 /PRNewswire-Asia-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 provided an update on key operating achievements, strategic initiatives and recent developments within the primary end-markets served by its subsidiary, Shaanxi Longmen Iron and Steel Co., Ltd. also known as "Longmen Joint Venture".
"In 2011, we signed a Unified Management Agreement with Shaanxi Iron and Steel Group, Co. Ltd. ("Shaanxi Steel") and Shaanxi Coal and Chemical Industry Group Co., Ltd. ("Shaanxi Coal"), which significantly bolstered output at our Longmen facility and led to record full-year sales volume of approximately 5 million to 5.5 million metric tons and sales revenue of approximately $3 billion to $3.6 billion in 2011, while also helped reduce expenses through efficiency optimization, reduced energy consumption and improved cost structure," said General Steel Chairman and Chief Executive Officer, Mr. Henry Yu.
"The markets we serve have remained strong. Government supported housing and infrastructure development projects in the Western region of China are driving demand, particularly in Shaanxi Province, which is the center of Western China's development. Although steel prices faced pressure in the second half of 2011, they have rebounded in 2012 which, coupled with the strong end-market demand, should support growth in sales of rebar and other steel products. Notably, during the 2012 National People's Congress, the central government raised its 2012 fiscal spending budget 14% year-over-year to $1.92 trillion. Under this new budget, public housing has risen to 23% of total spending, which we believe presents a meaningful opportunity to support the ongoing infrastructure growth in Western China."
In 2011, General Steel completed the installation and testing of a one million ton high-speed wire production line and a 1.2 million ton rebar production line, both of which were transferred to the Longmen facility from the Company's Maoming facility to leverage economies of scale. Having these production lines at the Longmen facility allows the Company to roll high-speed wire and produce rebar from freshly manufactured steel billet, and thus reduce the production costs by eliminating the process of cooling, transporting and re-heating of steel billet for processing at another location.