Longhai, through its Chinese operating company, produces various sizes of high quality steel wire products in two wire production plants, with a total annual capacity of approximately 1.5 million metric tons. The company’s output is sold to several distributors who in turn send it to nearby wire processing companies, with the final product being screws, nails, and wire mesh used for reinforced concrete and fencing. A recently opened second production line also produces higher quality steel wire for use in steel wire rope, welding rods, and steel belted radial tires. Longhai has also acquired land next to the two existing plants for the future addition of a third production facility.
Longhai’s production operations are located in Xingtai, Hebei province, south of Beijing, and cover roughly 200,000 square meters. Production design is geared to yield high quality, high volume, and low cost per ton. The newest facility incorporates Sixth Generation technology with air cooling that enables the production of even higher quality and more specialized steel wire. Longhai is ISO9001-2000 and GB/700-88 certified.
Longhai manufactures on demand, with sales prices set daily at the market price, though the company occasionally offers discounted wholesale prices, with sales efforts aimed at establishing long-term relationships with large volume customers. Steel billet is purchased subsequent to receipt of customer orders, helping protect the company from commodity price volatility. All distribution is within China, with 80% of it within Hebei province. Hebei is China’s biggest single steel making province, but is also a major producer of textiles, coal, iron, and chemicals.
The combination of the latest production technologies, together with an excellent distribution location and customer relationships that allow for customer prepayment, give Longhai an exceptionally solid operational foundation.
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