Longhai Steel, Inc. (LGHS) is “One to Watch”
8/17/2012 5:35:07 PM
Longhai Steel, Inc. is a leading producer of high-quality steel wire in eastern China, with annual capacity of 1.5 million metric tons. Longhai’s wire is manufactured into screws, nails, and wire mesh used for fencing and to reinforce concrete. Longhai recently expanded its production facility to include specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod. Longhai Steel is headquartered in Xingtai, Hebei province, the People’s Republic of China.
The company’s competitive advantages are its advanced production equipment and process technology, high product quality, expedited production, and close proximity to distributors and end users. Longhai Steel recently opened a second production line, which increases its overall capacity by 67% and expands its product portfolio into higher quality steel wire for specialized applications such as steel wire rope, steel strand, steel belted radial tires, and steel welding rod.
Longhai Steel’s growth strategy includes capitalizing on government actions aimed at encouraging industry consolidation via the acquisition of neighboring producers at attractive valuations. The company also plans to grow organically through capacity expansion, broadening its product portfolio, improving operating efficiencies, and continued expansion of technical expertise.
China is the world’s largest producer and consumer of steel and steel wires. Demand for steel products is primarily driven by spending in the construction, automotive, and infrastructure industries in China. Continued economic development in Hebei, one of the largest steel manufacturing regions in China, and neighboring provinces, and further buildout of tier 3-6 cities in China, provide tremendous medium and long term opportunities for Longhai Steel.
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