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Lihua International Partners with Beijing Modern Research Institute of Recycling Economy to Expand R&D Capabilities

2011-04-19 12:35 1899

DANYANG, China, April 19, 2011 /PRNewswire-Asia/ -- Lihua International, Inc. (Nasdaq: LIWA) ("Lihua" or the "Company"), a leading Chinese developer, designer, and manufacturer of low cost, high quality alternatives to pure copper products, including refined copper products and superfine and magnet wire, as well as copper clad aluminum ("CCA") wire, today announced that it has signed a joint development agreement with the Beijing Modern Research Institute of Recycling Economy ("RIORE"), a national non-profit institution authorized by the State Council to study and develop low-carbon opportunities to perpetuate a circular economy.


Under the agreement, Lihua and RIORE will establish a research and development center at Lihua's headquarters in Danyang to further develop copper recycling technology and applications. Recycling applications and technologies that are developed under the agreement will be the joint property of both Lihua and RIORE.

"RIORE is among China's top research institutes with a focus on recycling and elevating China's environmental standards. We are honored to begin working in cooperation with this team to strengthen our robust R&D capabilities and broaden our product portfolio through industry leading recycling product innovation," said Jianhua Zhu, President and CEO. "We are focused on sustainable and growing operations that meet the highest level of environmental standards from our copper recycling methods to our water filtration system. With plans to launch our new facility in the coming months, as well as begin importing scrap copper, we believe this is a timely and important partnership that will help showcase our technological leadership in the Chinese copper recycling market."

Together with RIORE, Lihua plans to develop new environmentally friendly products and technologies to broaden its portfolio and further its leadership position in copper recycling technology.

Lihua's Outlook and Growth Initiatives Update

New Facility Expansion

Lihua is in the process of constructing a new copper recycling facility, which will double the Company's smelting capacity to 100,000 metric tons.  Construction is currently underway and Lihua is on track to complete construction and begin production at its new facility in the fourth quarter of 2011.

Scrap Copper Import License

To efficiently source scrap copper from international suppliers, Lihua is in the process of obtaining an import license for scrap copper. The Company has obtained its scrap metal import license and is awaiting approval of the associated environmental license required to begin importing scrap copper.  Lihua believes that it will be able to obtain the environmental license in the near-term enabling the Company to begin directly importing scrap copper in second half of 2011.  

Financial Guidance

Lihua is targeting 2011 gross profit of $80.0 million to $82.0 million and non-GAAP net income of $52.0 million to $54.0 million, representing year-over-year growth of 29-32% and 30-35%, respectively. The Company expects that 2011 growth will be largely the result of continued strong demand in China for recycled copper and copper alternatives in the household appliance, consumer white goods and infrastructure markets.

Lihua's current 2011 financial projections assume one quarter of production and sales contribution from its new copper recycling facility. Launching production at its new facility earlier than the currently anticipated timeframe, or receipt of its importers' license from the Chinese government including lower source material procurement costs could provide additional upside to the Company's current gross profit and non-GAAP net income expectations.

Share Buyback Program

In January 2011, Lihua announced that its Management and Board of Directors approved a $15 million share repurchase plan in which Lihua will repurchase shares under the approved plan through January 26, 2012. Lihua's management and Board of Directors are committed to the completion of the share buyback program as planned, and in March 2011 the Company began purchasing shares under this program.

About Lihua International, Inc.

Lihua, through its two wholly-owned subsidiaries, Lihua Electron and Lihua Copper, is a leading value-added manufacturer of copper replacement products for China's rapidly growing copper wire and copper replacement product market. Lihua is one of the first vertically integrated companies in China to develop, design and manufacture lower cost, high quality alternatives to pure copper magnet wire and pure copper alternative products. Lihua's products include CCA and pure copper products. Current product offerings include CCA and copper wire, copper rod and copper anode.  Except for CCA wire, all other products are produced from recycled scrap copper. Lihua's products are sold in China either directly to manufacturers or through distributors in the wire and cable industries and manufacturers in a wide variety of industries including the consumer electronics, white goods, automotive, utility, telecommunications and specialty cable industries. Lihua's corporate and manufacturing headquarters are located in the heart of China's copper industry in Danyang, Jiangsu Province. For more information, visit: http://www.lihuaintl.com.

To be added to the Company's email distribution for future news releases, please send your request to lihua@tpg-ir.com.

Safe Harbor Statement

This press release contains certain statements that may be deemed to be "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. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including, without limitation, statements about its business or growth strategy, general industry conditions including availability of copper or recycled scrap copper, future operating results of the Company, capital expenditures, expansion and growth opportunities, bank borrowings, financing activities and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this press release are based on reasonable assumptions, actual results may differ from those projected in the forward-looking statements.

Please note that information in this press release reflects management views as of the date of issuance.

Contact

 

 

Lihua International, Inc.

 

 

Daphne Huang

 

 

EVP of Corporate Finance and Director of Investor Relations

 

 

(516) 717-9939

 

 

Daphne_huang@lihuaintl.com

 

 

 

 

The Piacente Group, Inc.

 

 

Investor Relations

 

 

Brandi Floberg or Lee Roth

 

 

(212) 481-2050

 

 

lihua@tpg-ir.com

 

 
 
Source: Lihua International, Inc.
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Keywords: Mining/Metals
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