Jan 21 2010
China Gengsheng Minerals, Inc. (OTC Bulletin Board: CHGS) ("Gengsheng"), a high-tech industrial materials products company in China with products capable of withstanding high temperatures, saving energy and boosting productivity in certain industries such as steel and oil, today announced that it has entered into an exclusive sales agreement with Junfu Sheng Precision Co., Ltd. to market and sell Gengsheng's fine-precision abrasives products in the eastern part of Guangdong Province.
Under terms of the agreement, effective January 10, 2010, Junfu Sheng will market and sell a minimum of RMB 3 million (US$0.44 million) worth of the company's specialty abrasives within 12 months of the agreement. Products to be marketed include fine precision abrasives used for polishing solar panels and precision equipments and for wire-slicing silicon wafers in the solar industry.
Mr. Shunqing Zhang, Chairman and CEO of China Gengsheng, stated: "This agreement represents the first sales contract of our channel strategy, which is to find more abrasives dealers in different areas in China and to focus our marketing onto large-scale customers in the solar industry. We are talking with more distributors all across China and will select them according to their customer base, scale, experience and reputation, among other standards, in order to aggressively expand our abrasives business."
China Gengsheng opened its fine-precision abrasives factory in April 2009 and began first commercial production of abrasives during the fourth quarter. Fine-precision abrasives are a green silicon carbide-based micro-powder used to cut silicon wafers. With an annual production capacity of 20,000 metric tons, the company's new state-of-the-art facility is one of the largest silicon carbide manufacturing facilities in mainland China.
The market for the abrasives in mainland China and Taiwan is estimated at US$2 billion, and the market for the solar-related abrasive products in China is US$750 million. Fine precision abrasives sell for an average of US$4,200 per metric ton.