Exhibit 99.1
Investor and Media Relations Contacts: Company Contact:
Leslie Wolf-Creutzfeldt and Adam Friedman John Chen, CFO
Adam Friedman Associates Adam Friedman Associates General Steel
212-981-2529 x11 212-981-2529 x18 86-10-68000346
leslie@adam-friedman.com adam@adam-friedman.com john@gshi-steel.com
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GENERAL STEEL AND BAOTOU STEEL
SIGN JOINT VENTURE AGREEMENT
Joint Venture will produce 600,000 metric tons of specialty steel products for
industrial usage a year
Tianjin, China, October 3, 2005 - General Steel Holdings, Inc. (OTCBB: GSHO), a
leading manufacturer of high quality hot-rolled steel sheets primarily for use
in tractors, agricultural vehicles and other specialty vehicles, today announced
that the board of directors of General Steel Holdings and Baotou Iron and Steel
(Group) Company, Limited ("Baotou Steel") have signed a joint venture agreement.
The agreement covers the production of specialty steel products including alloy
and carbon structure steel as well as finished steel for industrial use. The
name of the joint venture will be Baotou Steel-General Steel Special Steel Joint
Venture Company Limited.
The joint venture will establish a hot rolling facility in the Kundulun
District, Baoutou City, Inner Mongolia to produce alloy rods, tubular billets,
round bars, channels and I-beams. The registered capital of the joint venture
will be approximately $24,000,000. The products of the joint venture will be
sold in the Chinese market and abroad.
According to Zuosheng Yu, CEO and Chairman of General Steel, "This is a historic
day for General Steel and the beginning of a very meaningful relationship with
our joint venture partner, Baotou Steel. The purpose of the joint venture is to
strengthen the economic cooperation and technical exchanges between the two
companies in order to improve and increase production capacity and to develop
new products and gain competitiveness in both domestic and international
markets. We expect the joint venture will significantly impact the production of
steel products in terms of quality, variety and price through adopting the
latest technology and production methods. We will also adopt advanced management
methodologies in order to optimize profits and control costs. We are honored to
be working with one of the leading steel producers in China and feel confident
that there will be tremendous benefits for both companies."
The production scale of the joint venture will be 600,000 metric tons of
specialty steel products a year. General Steel Holdings, Inc. and its 70%
ownership in its subsidiary, Tianjin Da Qiu Zhuang Metal Sheet Co., Ltd., ("DQ")
shall own 51% of the joint venture and Baotou Steel shall own 49%.
Baotou Iron and Steel (Group) Company, Limited, was reorganized in June 1998
from Baotou Iron and Steel Company (established in 1954). It is a large producer
of iron and steel and has the largest scientific research and production base of
rare earth products in China. It is also the most important basic industry and
the first enterprise whose total sales is over 10 billion RMB in Inner Mongolia
Autonomous Region. It is one of the top 100 largest companies in China.
About the Company
General Steel Holdings, Inc. and its 70% ownership in its subsidiary, Tianjin Da
Qiu Zhuang Metal Sheet Co., Ltd., ("DQ") a People's Republic of China limited
liability corporation, is a manufacturer of high quality hot-rolled steel sheets
primarily for use in tractors, agricultural vehicles and other specialty
vehicles. Since 1998, it has expanded its operations to six production lines
capable of processing 250,000 tons of 0.7-2.0mm hot-rolled carbon steel sheets
per year, making the company the largest producer in its product category in
China, with a 40% market share of all steel sheets used in the production of
agricultural vehicles in China. In 2004, its sales revenue was over $87 million
and its total assets were worth nearly $53 million. Revenue for the first six
months of 2005 was $46 million and net income in the same period 2005 was $1.57
million. For more information, visit http://www.gshi-steel.com.
This news release contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. Forward-looking statements include
statements concerning plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements that are other than
statements of historical facts. These statements are subject to uncertainties
and risks including, but not limited to, product and service demand and
acceptance, changes in technology, economic conditions, the impact of
competition and pricing, government regulation, and other risks defined in this
document and in statements filed from time to time with the Securities and
Exchange Commission. All readers are encouraged to review the 8-K to be filed in
connection with the joint venture agreement. discussed above, which outlines
risk factors including debt obligations, deal terms and other relevant items.
All such forward-looking statements, whether written or oral, and whether made
by or on behalf of the companies, are expressly qualified by the cautionary
statements and any other cautionary statements which may accompany the
forward-looking statements. In addition, the companies disclaim any obligation
to update any forward-looking statements to reflect events or circumstances
after the date hereof.