Lihua International Signs First Customer Contract for Copper Anode Products with a Leading Copper Conglomerate
DANYANG, China, Aug. 17 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum ("CCA") wire, today announced that it has signed its first customer contract for its new copper anode product with one of the world's leading copper and metal conglomerates based in the People's Republic of China (PRC). The China-based conglomerate has total annual revenue of approximately $5.0 to $6.0 billion dollars and operates three major business segments composed of metals, chemicals and equipment manufacturing.
Under the terms of the supply agreement, Lihua will supply a minimum of 1,000 metric tons of copper anode to this customer on a monthly basis. Lihua launched production of copper anode from its newly built second smelter in July 2010, and will fulfill this customer's supply orders commencing in August 2010. Pricing of the product will be determined upon delivery at the prevailing market price. The customer is expected to provide Lihua with its full year 2011 volume demand indication later this year. Lihua is expecting profitability for its copper anode product similar to that of its copper rod product.
Copper anode is the fundamental building block for almost all pure copper products, and holds a wide range of potential end market uses. Lihua launched production of copper anode in July 2010, in conjunction with the completion of its second copper smelter. Lihua's new state-of-the-art smelter holds an annual capacity of 25,000 tons and meets China's strict industry and environmental requirements. The completion of its second smelter doubles Lihua's manufacturing capacity to 50,000 tons per year.
"This supply contract represents a significant endorsement of our newest pure copper product from one of the largest copper conglomerates in both China and the world," said Jianhua Zhu, Chairman and CEO of Lihua. "We are currently working to optimize the allocation of our copper anode output to a few select customers to ensure that we are diversifying our customer base for this new product line while quickly securing an elite group of customers with healthy demand. We are very excited to have forged our first partnership with this industry leader. We expect copper anode products to provide meaningful contributions to both our top and bottom line beginning in the third quarter, with our second smelter operating at full capacity beginning in September of this year."
As previously announced, Lihua expects full year 2010 gross profit to increase by 46-53% over 2009, to $52.9 to $55.7 million, and non-GAAP net income to grow by 48-57% to $38.1 million to $40.3 million.
About Lihua International, Inc.
Lihua, through its two wholly-owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design and manufacture lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include CCA and pure copper products. Current product offerings include CCA and copper wire, copper rod and copper anode. Except for CCA wire, all other products are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in a wide variety of industries including the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com .
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Safe Harbor Statement
This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.
Please note that information in this press release reflects management views as of the date of issuance.
For more information, please contact:
Lihua International, Inc.
Daphne Huang
EVP of Corporate Finance and Director of Investor Relations
Tel: +1-516-717-9939
Email: [email protected]
The Piacente Group, Inc.
Investor Relations
Brandi Floberg or Lee Roth
Tel: +1-212-481-2050
Email: [email protected]
SOURCE Lihua International, Inc.
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