RE: Good Play Friday2nd largest steel company in the world and #1 in China for STEEL!
OVERVIEW:
Through its Chinese operating company, Longhai manufactures steel wire products in diameters from 6.5 to 10 millimeters on two wire production lines that have a total annual capacity of about 900,000 metric tons.
Longhai's output is sold to several distributors who transport the wire to nearby wire processing companies that make a variety of products including screws, nails, and wire mesh used to reinforce concrete and for fencing.
Longhai manufactures on demand. Sales prices are set at the market price for wire on a daily basis. Customers usually prepay with their orders, then the final prices are adjusted to the market price on the day of pickup by the customer. This allows Longhai to maintain low inventory of both wire and raw materials and minimizes its exposure to commodity price volatility. To increase sales and be price competitive, Longhai occasionally offers discounted wholesale prices.
Sales efforts are directed toward developing and sustaining long-term relationships with customers who are able to purchase in large quantities. In 2010, Longhai's top five distributors accounted for about 40% of our sales.
Longhai's production facilities, located in Xingtai, Hebei province, cover 107,000 square meters. The plant includes a single steel furnace with its coarse and intermediate rolling mills that then feeds two precise wire rolling and drawing lines that create the finished products. This design yields high quality, high volume, and competitive manufacturing costs per ton.