WUXI, China, Dec. 5 /Xinhua-PRNewswire/ -- China Wind Systems, presently incorporated as "Malex, Inc." (OTC Bulletin Board: MLEX) announced it has completed the construction of a major manufacturing facility in Wuxi City, in the People's Republic of China. The new facility will be used exclusively to manufacture high precision rolled rings and other critical components for use in the wind power industry.
The new manufacturing facility measures 107,639 square feet and its initial construction was completed in August 2007. The new facility is highly automated with state-of-the-art heat treatment value simulation software, a "green" technology developed by the Forging Technology Section of the Mechanical Engineering Institute, a research organization that helps the company's machines operate with high heating efficiency.
A significant portion of the $4 million raised by China Wind Systems in November 2007 through a private placement led by Barron Partners, LP will be used in the company's initial expansion phase. In the initial phase, China Wind Systems will focus on producing rolled rings that measure up to 5 meters in diameter as well as other wind mill components such as yaw bearings, shafts and rotor blades. Some of the equipment already purchased to manufacture the wind energy components includes a 5-meter ring rolling mill and a 6,000-ton oil press. China Wind Systems plans to purchase additional equipment during phase two and three of its expansion. In phase two, the company intends to manufacture rolled rings with diameters of greater than 5 meters. In phase three, the company intends to manufacture other wind mill components such as turbine leafs. At the conclusion of its expansion, China Wind System's new facility will be capable of producing forged rolled-rings of up to 8 meters in diameter weighing up to 150 tons, to suit different applications and processes in the wind energy industry.
"Our new facility will help us achieve our goal of becoming a major supplier of precision rolled rings for use in yaw bearings on large scale windmills, as well as a supplier of other components such as yaw bearings, shafts, rotor blades and turbine leafs for use in the wind energy industry. We are currently experiencing strong demand from our largest wind energy customer and this will enable us to significantly scale the size of the rolled rings we can deliver while achieving greater integration of our manufacturing process," commented Mr. Wu, Chairman and CEO of China Wind Systems. Although the facility is primarily intended to manufacture rolled rings for use in the wind energy industry, the company's precision rolled rings can also be used in other heavy industries such as the automotives and airlines.
According to the Global Wind Energy Council (GWEC), wind energy is becoming a mainstream energy source. Reasons behind the growth in wind energy include concerns about global warming and the rising costs and projected shortages of fossil fuels. The reduced costs of energy generated by large scale windmills is expected to make wind power a viable solution in meeting the projected growth in energy demand by emerging countries such as China. In 2006, global wind power capacity reached 74.3 Giga-watts (GW), increasing at a 24.4% compound annual growth rate over a five year period. BTM Consult ApS projects global wind capacity to reach 203.2 GW by 2011 from 74.3 GW in 2006, a 22.3% compound annual growth rate. GWEC projects wind power to represent 16% of the global electricity supply by 2020 and as much as 29% by 2030, up from just 0.8% in 2005.
Based on current domestic energy requirements and strong government support, large-scale wind energy is rapidly accelerating in China. Morgan Stanley estimates China's total electricity supply to reach 932 GW by 2011, of which 13.4 GW or only 1.4% will be sourced from wind power. BTM Consult SpA has estimated that China's wind power capacity will reach 13.4 GW by 2011, up from 2.6 GW in 2006. The Chinese government estimates China's wind power capacity will reach 30 GW by 2020.
"Development of large scale wind farms in China is expected to create strong demand for these high precision, large scale components. We are confident in our ability to grow our market share in the industry given our experience in large-scale, high precision fabrication and machining and our solid engineering capabilities in the alternative energy sector," said Mr. Wu.
About China Wind Systems
China Wind Systems is presently incorporated as "Malex, Inc.", a Delaware corporation. The company intends to change its registered corporate name to "China Wind Systems." Through its affiliates, Huayang Dye Machine and Huayang Electrical Power Equipment, collectively known as the Huayang Companies, the company manufactures and sells industrial equipment for use in the textile and coal power industries in China. Huayang Dye Machine was founded in 1995 by Mr. Jianhua Wu, when the textile and dyeing industries began to gain traction in China, by becoming a direct supplier of textile dyeing and finishing equipment to textile producers in China. Huayang Electrical Power Equipment was established in 2005 to supply the coking plants and coal-fired power stations in China with efficiency-producing equipment. In 2007, the company entered the wind energy industry by beginning to manufacture precision forged rolled rings. Management estimates that the percentage of the company's total revenue from wind energy products will be approximately 25% in 2007, and this percentage is expected to increase for 2008 and 2009.
Safe Harbor Statemen
This announcement contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the company's ability to raise additional capital to finance the company's activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the Share Exchange; the future trading of the common stock of the company; the ability of the company to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; general economic and business conditions; the volatility of the company's operating results and financial condition; and other risks detailed in the company's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
