CHANGSHU, China, June 13, 2012 /PRNewswire-Asia-FirstCall/ -- Sutor Technology Group Limited (the "Company" or "Sutor") (Nasdaq: SUTR), a leading China-based non-state owned manufacturer and distributor of high-end fine finished steel products and welded steel pipes used by a variety of downstream applications, today announced that its Board of Directors has approved a plan to form a joint venture among its indirect wholly owned subsidiary, Jiangsu Cold-Rolled Technology Co., Ltd. ("Cold-Rolled"), China Railway Materials Wuhan Company Limited ("CRM Wuhan"), a subsidiary of China Railway Materials Company Ltd., and Changshu Binjiang Urban Construction Investment & Management Company ("Changshu Binjiang").
Initially the joint venture will primarily be engaged in providing raw materials procurement, logistic and other related services to third parties. The equity interests in the joint venture for Cold-Rolled, CRM Wuhan and Changshu Binjiang are 39%, 51% and 10%, respectively. CRM Wuhan is a state-owned enterprise (SOE) supervised by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). It is reported that China Railway Materials Company, the parent of CRM Wuhan, is one of the Fortune 500 companies. Changshu Binjiang is affiliated with Changshu municipal government. The registered capital for the joint venture is Renminbi (RMB) 100 million (approximately US$16 million), among which, RMB 39 million (approximately US$6.24 million) will be contributed by Cold-Rolled.
Ms. Lifang Chen, Chairwoman and CEO of Sutor, commented, "We are very pleased that CRM Wuhan selected us as its partner for the joint venture. It reaffirms our position as one of the leading fine finished steel manufacturers in China. We believe this joint venture will elevate our position in the industry. We also intend to take advantage of CRM Wuhan's extensive business network and vast resources to secure our raw materials procurement on more favorable terms, reduce our financial expenses and strengthen our balance sheet."
"We believe the joint venture will improve our vertically integrated business model by extending our value chain into the upstream raw materials purchases. In the long term, we also believe it will open doors for other strategic growth opportunities," concluded Ms. Chen.
About Sutor Technology Group Limited
Sutor is a leading China-based non-state-owned manufacturer and distributor of high-end fine finished steel products and welded steel pipes used by a variety of downstream applications. The Company utilizes a variety of in-house developed processes and technologies to convert steel manufactured by third parties into fine finished steel products, including hot-dip galvanized steel, pre-painted galvanized steel, acid-pickled steel, cold-rolled steel and welded steel pipe products. These products are used for household appliances, solar water heaters, automobiles, information technology, construction, and other applications. Currently Sutor has four operating subsidiaries located in two provinces with 12 major production lines capable of processing approximately 2 million metric tons of steel products annually. To learn more about the company, please visit http://www.sutorcn.com/en/index.php.
This press release contains 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 (the "Exchange Act"). You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results of the Company to differ materially from those anticipated, expressed or implied in the forward-looking statements. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those anticipated include risks related to new and existing products, any projections of sales, earnings, revenue, margins or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements regarding future economic conditions or performance, uncertainties related to conducting business in China and the current global economic crisis on our business and on our customers' business, and any of the factors and risks mentioned in the "Risk Factors" sections of our Annual Report on Form 10-K for the year ended June 30, 2011 and subsequent SEC filings. The Company assumes no obligation and does not intend to update any forward-looking statements, except as required by law.
For more information, please contact:
Mr. Jason Wang, Director of IR
Sutor Technology Group Limited
SOURCE Sutor Technology Group Limited